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Survey of the Best CD Rates for June 30, 2014

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Survey of the Best CD Rates for June 30, 2014

This last week of June was quiet for CD rate changes. We may see more this week with the new month, especially at credit unions. One credit union which made a big change to its certificate rates was Greater Nevada Credit Union. Its CD rates took a nose dive last week. It had yields as high as 3% for a 4-year term, but now the highest yield is only 1.25%. Thus, these CDs have been removed from the tables.

I removed the 30-month CD special from Luther Burbank Savings. This 2% CD was scheduled to expire today, so if you’re in California, you may have time to get this deal. If you see this CD special is still being offered into July, please leave a comment.

One credit union I added to the list is easy-to-join Aspire Federal Credit Union. Its 15-month CD yield recently increased to 1.26%, which makes this a good deal especially when you consider anyone can join via an association. However, the credit union isn’t alone. Two others continue to offer good deals for terms around 15 months. One is NASA Federal Credit Union with a special 1.25% APY 15-month CD, and the other is Xceed Financial Credit Union with a special 1.50% APY 17-month CD. Both of these credit unions are easy to join via an association.

I added two local credit unions to the tables. Both of these are primarily limited to the geographic areas near their branches. The first is Kemba Credit Union in the Greater Cincinnati Area. It’s offering a special 42-month CD with a 2.00% APY. The second is University of Iowa Community Credit Union (UICCU) which primarily serves residents in one of 42 Iowa counties. UICCU is offering a 25-month CD with a 2.00% APY.

It’s nice to see more 2% CD specials with shorter and shorter terms. It’s still hard to believe that 2% CDs look that good when 7 years ago, it was easy to get 5% savings accounts.

The best long-term CD deal continues to be the 3.04% APY 7-year add-on CD at Tobyhanna Federal Credit Union. Many readers have shared their experiences and opinions on this CD in the comments of my Tobyhanna CD review post. One note about these types of deals at small credit unions is that there’s always a risk that the CD features may not hold up through the entire term. I did this post last week on what happened at another credit union.

An alternative to short-term CDs is long-term CDs that have mild early withdrawal penalties. Two banks with top 5-year CD rates and a mild early withdrawal penalty are Synchrony Bank and Barclays. Both have very competitive 5-year CDs with an early withdrawal penalty of only 6 months of interest. I included the effective yields of these CDs when closed early in the tables below. If you want to compare the effective yields of other CDs after the early withdrawal penalties, please refer to our CD early withdrawal penalty calculator.

The risks of planning for early withdrawals of long-term CDs were highlighted by the deposit agreement change at Ally. The risks have also been seen at credit unions which have raised the early withdrawal penalties on existing CDs. I have more details in this blog post.

Yields Accurate as of June 27, 2014

Under 1-Year CD Rates

InstitutionRatesNotes
EverBank1.40% checking/MMA intro 6-month rate ($100K/$50K max)account review
Connexus Credit Union1.01% 9-month CD specialaccount review
Connexus Credit Union1.00% 6-month CDw/active chk
Doral Direct0.91% 9-month CDaccount review
Doral Direct0.87% 6-month CDaccount review
Ally Bank0.87% 11-month No-Penalty CDsee account review

Noteworthy Local Deals - Under 1-Year CDs

InstitutionRatesRegion
Libertad Bank1.31% MMA with rate guaranteed to 12/31/14Texas
NavyArmy Community Credit Union1.20% ($100K) 1.10% ($1K) 6-month CDCorpus Christi, TX metro
Flagstar Bank1.15% savings account w/12-mo rate guaranteeMichigan
Gulf Coast Federal Credit Union1.00% 6-month CDCorpus Christi, TX metro
Doral Bank NY1.00% 6-month CDNYC

1-Year CD Rates

InstitutionRatesNotes
Melrose Credit Union1.15% 1-year CD
Synchrony Bank1.15% (2.30% 5-year CD closed after 1 year)see review & risks
EverBank1.10% 1-year CD
Synchrony Bank1.10% ($25K min) 1-year CDFormerly MetLife
GE Capital Bank1.10% 1-year CD
Connexus Credit Union1.10% 1-year CDw/active chk
VirtualBank1.07% 1-year CD
CIT Bank1.05% ($25K min)add-on & bump-up 1-year CD

Noteworthy Local Deals - 1-Year CDs

InstitutionRatesRegion
NavyArmy Community Credit Union1.45% ($100K) 1.15% ($1K) 1-year CDCorpus Christi, TX metro
Gulf Coast Federal Credit Union1.30% 12-month CDCorpus Christi, TX metro
South Florida Federal Credit Union1.26% 1-year CDSouth Florida
LOMTO Federal Credit Union1.25% 1-year CDparts of New York City
Doral Bank NY1.25% 1-year CDNYC
HAB Bank1.15% 1-year CDSouthern California

18-month CD Rates

InstitutionRatesNotes
Synchrony Bank1.53% (2.30% 5-year CD closed after 18 months)see review & risks
Xceed Financial Credit Union1.50% 17-month CD
Barclays1.50% (2.25% 5-year CD closed after 18 months)see review & risks
Aspire Federal Credit Union1.26% 15-month CD
NASA Federal Credit Union1.25% 15-month CD special
BBVA Compass1.25% (w/relationship checking) 1.15% (w/o relation) 18-month CDnow nationally available
Northern Bank & Trust Company1.25% 20-month CD
EverBank1.17% 18-month CD
VirtualBank1.17% 18-month CD
Ally Bank1.16% (1.60% 5-year CD closed after 18 months w/new ewp)see review & risks
Synchrony Bank1.15% 15-month CD specialFormerly MetLife

Noteworthy Local Deals - 18-Month CDs

InstitutionRatesRegion
Gulf Coast Federal Credit Union1.45% 18-month CDCorpus Christi, TX metro
Doral Bank NY1.30% 18-month CDNYC
South Jersey Federal Credit Union1.26% 18-month CDparts of New Jersey

2-Year CD Rates

InstitutionRatesNotes
Synchrony Bank1.72% (2.30% 5-year CD closed after 2 years)see review & risks
Barclays1.69% (2.25% 5-year CD closed after 2 years)see review & risks
Quorum Federal Credit Union1.50% 25-month CD special
Third Federal1.50% 29-month CDpromotional
Melrose Credit Union1.41% 2-year CD
BBVA Compass1.35% (w/relationship checking) 1.25% (w/o relation) 29-month CDnow nationally available
Northrop Grumman Federal Credit Union1.28% ($40K) 1.14% ($2.5K) 2-year CD
Ally Bank1.27% (1.60% 5-year CD closed after 2 years w/new ewp)see review & risks
Connexus Credit Union1.30% 2-year CDw/active chk
EverBank1.26% 2-year CD
CIT Bank1.25% ($100K min) 2-year CD
Salem Five Direct1.25% 2-year CD
Bank5 Connect1.20% add-on 2-year CDnot available to MA & RI residents
CIT Bank1.20% ($25K min) add-on & bump-up 2-year CD

Noteworthy Local Deals - 2-Year CDs

InstitutionRatesRegion
University of Iowa Community Credit Union2.00% 25-month CD special
NavyArmy Community Credit Union1.70% ($100K) 1.40% ($1K) 2-year CDCorpus Christi, TX metro
Gulf Coast Federal Credit Union1.55% 2-year CDCorpus Christi, TX metro
Doral Bank NY1.50% 2-year CDNYC
Keesler Federal Credit Union1.50% ($100K) 1.40% ($1K) 2-year CDMississippi
LOMTO Federal Credit Union1.45% 2-year CDparts of New York City
People's Alliance Federal Credit Union1.35% 28-month CDNYC and Miami
BrightStar Credit Union1.25% 23-month CD (+0.25% w/chk relationship)parts of Southeast FL

3-Year CD Rates

InstitutionRatesNotes
Wilshire State Bank2.28% 3-year installment savings account w/auto xfers, $100K maxaccount review
Synchrony Bank1.92% (2.30% 5-year CD closed after 3 years)see review & risks
Barclays1.88% (2.25% 5-year CD closed after 3 years)see review & risks
Connexus Credit Union1.75% 3-year CD w/active chk
USAlliance Federal Credit Union1.71% 35-month CD
Melrose Credit Union1.66% 3-year CD
Northern Bank & Trust Company1.60% 3-year CD
America's Credit Union1.50% 3-year CDpromotional
Sallie Mae Bank1.45% 3-year CD
CIT Bank1.45% ($100K) 1.30% ($1K) 3-year CD
Navy Federal Credit Union1.40% ($100K) 1.35% ($20K) 3-year CDlimited membership

Noteworthy Local Deals - 3-Year CDs

InstitutionRatesRegion
NavyArmy Community Credit Union2.05% ($100K) 1.75% ($1K) 3-year CDCorpus Christi, TX metro
Gulf Coast Federal Credit Union2.02% 3-year CDCorpus Christi, TX metro
Kemba Credit Union2.00% 42-month CD specialGreater Cincinnati
Keesler Federal Credit Union1.70% ($100K) 1.60% ($1K) 3-year CDMississippi
Doral Bank NY1.67% 3-year CDNYC
Keesler Federal Credit Union1.65% ($100K) 1.55% ($1K) 3-year bump-up CDMississippi
LOMTO Federal Credit Union1.65% 3-year CDparts of New York City
Progressive Credit Union1.61% 3-year CD (NYC with unique FOM)account review
First Republic Bank1.50% 3-year CDparts of CA, OR, MA, CT, FL and NY

4-Year CD Rates

InstitutionRatesNotes
NASA Federal Credit Union2.25% 49-month CD special
Melrose Credit Union2.02% 4-year CD
Synchrony Bank2.01% (2.30% 5-year CD closed after 4 years)see review & risks
Third Federal2.00% 49-month CDpromotional
Barclays1.97% (2.25% 5-year CD closed after 4 years)see review & risks
Nationwide Bank1.84% ($100K) 1.79% ($500) 4-year CD
America's Credit Union1.80% 4-year CDpromotional
CIT Bank1.80% ($100K) 1.70% ($50K) 1.65% ($1K) 4-year CD
VirtualBank1.79% 4-year CD
EverBank1.79% 4-year CD
Synchrony Bank1.75% ($25K) 1.70% ($2K) 4-year CDFormerly MetLife
Barclays1.70% 4-year CD
Fort Knox Federal Credit Union1.65% 46-month CDConsumer-unfriendly history, see review
Navy Federal Credit Union1.65% ($100K) 1.60% ($20K) 1.55% ($1K) 4-year CDlimited membership
Ally Bank1.30% Raise-Your-Rate 4-year CD

Noteworthy Local Deals - 4-Year CDs

InstitutionRatesRegion
Institution for Savings2.50% ($250K) 4-year Money Market CD (also req $250K in MMA)parts of MA
Bayer Heritage Federal Credit Union2.15% 4-year CDparts of WV, OH & SC
First Republic Bank2.00% 4-year CDparts of CA, OR, MA, CT, FL and NY
Institution For Savings2.00% 4-year CDparts of MA
Keesler Federal Credit Union2.00% ($100K) 1.90% ($1K) 4-year CDMississippi
LOMTO Federal Credit Union1.85% 4-year CDparts of New York City
MidFirst Direct1.75% 4-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
Fifth Third Bank1.50% 4-year CD specialseveral eastern and midwestern states

5-Year CD Rates

InstitutionRatesNotes
Synchrony Bank2.30% ($25K) 2.25% ($2K) 5-year CDFormerly MetLife
CIT Bank2.30% ($100K) 2.25% ($1K) 5-year CD
EverBank2.30% 5-year CD
Melrose Credit Union2.27% 5-year CD
GE Capital Bank2.25% 5-year CD
Barclays2.25% 5-year CD
Navy Federal Credit Union2.15% ($100K) 2.10% ($20K) 5-year CDlimited membership
Sallie Mae Bank2.10% 5-year CD
BBVA Compass2.10% (w/relationship checking) 2.00% (w/o relation) 5-year CDnow nationally available
Fidelity New Issue Brokered CD2.05% 5-year non-callable CDissued by Synchrony Bank
Nationwide Bank2.00% ($100K) 5-year CD
Discover Bank1.95% 5-year CD

Noteworthy Local Deals - 5-Year CDs

InstitutionRatesNotes
Bayer Heritage Federal Credit Union2.40% 5-year CDparts of WV, OH & SC
Progressive Credit Union2.32% 5-year CD (NYC with unique FOM)account review
Keesler Federal Credit Union2.30% ($100K) 2.20% ($1K) 5-year CDMississippi
First Republic Bank2.25% 5-year CDparts of CA, OR, MA, CT, FL and NY
LOMTO Federal Credit Union2.15% 5-year CDparts of New York City

Over 5-Year CD Rates

InstitutionRatesRegion
Fidelity New Issue Brokered CD3.30% 10-year non-callable CDissued by Synchrony Bank
Tobyhanna Federal Credit Union3.04% 7-year add-on CDaccount review
Fidelity New Issue Brokered CD2.65% 7-year non-callable CDissued by Synchrony Bank
Apple Federal Credit Union2.60% 10-year CD
Navy Federal Credit Union2.55% ($100K) 2.50% ($20K) 7-year CDlimited membership
Special Custodial CD2.53% ($100K) 10-yearaccount review
Doral Direct2.40% 10-year CDaccount review
Franklin Federal Savings Bank2.32% 7-year CDaccount review
GE Capital Bank2.30% 6-year CD
Navy Federal Credit Union2.30% ($100K) 2.25% ($20K) 6-year CDlimited membership
Discover Bank2.25% 10-year CD
Apple Federal Credit Union2.20% 7-year CD
Franklin Federal Savings Bank2.12% 6-year CDaccount review
Discover Bank2.05% 7-year CD
Doral Direct2.00% 7-year CDaccount review

Noteworthy Local Deals - Over 5-year CDs

InstitutionRatesRegion
Hutchinson Credit Union3.15% ($250K) 3.10% ($100K) 3.05% ($25K) 10-year CDKansas
MidFirst Direct3.00% 10-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
MidFirst Bank3.00% 10-year CDAZ and OK
Frick Tri-County Federal Credit Union3.00% 10-year CDparts of Western PA
SACU2.90% ($90K) 2.85% ($10K) 10-year CDSan Antonio, TX
Dollar Bank2.80% 10-year CDPittsburgh and Cleveland
PeoplesChoice Credit Union2.78% 10-year CDYork and Cumberland Counties of Maine
MidFirst Direct2.75% 7-year CDAR, AZ, CA, FL, MO, NH, NV, NY, OK, TX, and WY
Doral Bank NY2.70% 10-year CDNYC
Frick Tri-County Federal Credit Union2.50% 8-year CDparts of Western PA
Hutchinson Credit Union2.50% ($250K) 2.40% ($100K) 2.30% ($25K) 6-year CDKansas
SACU2.45% ($100K) 2.40% ($10K) 7-yearSan Antonio, TX
MidFirst Bank2.40% 7-year CDAZ and OK
Wright-Patt Credit Union2.40% ($100K) 2.30% ($500) 6-year CDUS gov military and civilian personnel, Parts of OH
First Republic Bank2.35% 6-year CDparts of CA, OR, MA, CT, FL and NY
Doral Bank NY2.30% 7-year CDNYC
Financial Center Federal Credit Union2.25% 7-year CDparts of Indiana
Fifth Third Bank2.00% 6-year CD specialseveral eastern and midwestern states

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

Links to All of the CD Rate Tables


Related Pages: CD rates

Related Posts

Comments
59 Comments.
Comment #1 by mo (anonymous) posted on
mo
We visited Beverly Hills Branch of Luther Burbank Savings last week, and opened 30 month CD at 2%.  At that time, on June 24th, we heard that the same rate will be good until Thursday, July 3rd.  Please check with them again.  Their telephone number is 888-407-9904 or 310-272-7370.

4
Comment #2 by Anonymous posted on
Anonymous
The 3.04% 7 year at Toby is looking better and better.  I think I'll watch it for another couple of weeks, and if nothing much changes in the CD world, I'll pull the trigger and go in for $203,000.  What do you think of this strategy?

1
Comment #4 by gregk posted on
gregk
It's a dice roll.  Seven years is forever, and while interest rates may stay muted for some time to come, it's also possible that lurking inflation could start creating some upward pressure sooner than we've all been led to think.  You'd be making a long commitment just when the uncertainty over how things might unfold is greater than it has been.  In any case, you're not likely to get much of a read on all this in the next two weeks, and certainly we won't see any substantial changes so soon.  Myself, I'm waiting at least 6 months and perhaps even a year before potentially more fully funding my Toby CD, - and if PenFed comes through again with their own 3% (5 year) offer at the end of the year, I'd surely give precedence to that.  .    To me, the Toby CD is looking just like it has since I first became aware of it, - something with no downside to investing a thousand dollars in now,  but far too long a term for any more than that in present conditions.  The "better and better" in your own mind no doubt derives from your felt need to be moved towards some resolution rather than any objective criteria.  But that your agony over all this be no longer perpetuated might well be worth the possible costs of an otherwise premature decision. 

Jump.

5
Comment #5 by Anonymous posted on
Anonymous
Actually, I think you may be right.  I might wait six months and see what happens before I pull the trigger.  Its just that it looks fairly good in some ways.  I did the Navy 7 year at 3.1% last winter for the full $250,000.  Was this a mistake, or is there some reason the Navy is better than the Toby?  I do think the Toby is the best long term CD out there right now.  Do you think it would be a mistake to buy any 7 year CD at 3% right now? 

1
Comment #6 by lou posted on
lou
Please don't answer him.

8
Comment #7 by Anonymous posted on
Anonymous
I don't see anything better than the Toby out there right now, but seven years is a very long time.

3
Comment #8 by gregk posted on
gregk
Look #5 (surely this is a woman, Lou), - if you go in with all you have now, each and every month rates don't change and better offers don't emerge you're going to feel validated in the decision (just like with the Navy CD of last winter so far).  A year from now (and beyond) that could plausibly still well be the case, and you'll have earned 3% on your money rather than the much less while you dilly-dally.  To let that term start rolling immediately at such a good rate with no better deal in sight might be a very prescient decision while the rest of us sit on the sidelines meekly waiting for some shift in things that never happens.  If I were you (rather than me) I'd seize this opportunity now and start pocketing that 3%.  It's a "bird in the hand" the benefits of which you'll have locked in for a long time to come.  Wait 6 months (or longer) like some will and you'll have just foregone those benefits that are here for the taking.  Whatever is the case in the future you can respond to that out of your circumstance then, but at this moment you've got money to invest, and Toby is offering an attractive rate.  Trying to predict the future is a fool's errand.  Get what you can now and adapt to whatever comes as it unfolds.  You wouldn't be unwise.

8
Comment #9 by Anonymous posted on
Anonymous
From an earlier post..."Why is there a posting of an opening for a CFO...why is there a vacancy?"  What did your due diligence reveal?

5
Comment #10 by paoli2 posted on
paoli2
#8  I find your reply "surely this is a woman" very insulting to the millions of financially educated women who have handled the finances for their families and have taken small amounts of money and turned them into fortunes for their families.  It is not only MEN who are posting on DA.  Many women, like myself, are on here constantly trying to learn even more to make sure we are secure.  Frankly, I took it that it was definitely a MAN asking the same insecure questions since many men are more insecure about finances than women.  The poster expresses  more like a male than a woman anyway, imo.  If more women took over the finances in their marriages, I think we would not have such a low savings rate in the US.

8
Comment #12 by Anonymous posted on
Anonymous
What you say here makes a lot of sense.  I think I'll wait until the middle of this month, and if nothing has drastically changed in the CD world, I think I'll add another $202,000 to the $1,005 I currently have in the Toby.  I truly believe that the Toby 7 year is the best long term CD out there now.  My only question is:  is it wise to go into a 7 year CD at this time?  Thanks.

1
Comment #13 by Anonymous posted on
Anonymous
The Toby is definitely the best long term CD deal.  Two questions:  is now the time to go into a long term CD deal?  and if one doesn't exercise the add-on feature now, is there a chance Toby might terminate the add-on feature so that if the add-on feature is not exercised now, will it not be available in the future?

2
Comment #14 by lou posted on
lou
Just don't start complaining on this site if rates go up next year and you're stuck with 3% for 6 more years because of the 2-year interest penalty.

8
Comment #15 by Researcher (anonymous) posted on
Researcher
Oh no, now you're answering #5!  Surely this is someone who is having a great time getting people to seriously answer fake questions!

8
Comment #16 by Anonymous posted on
Anonymous
Believe me, these questions are all too real.

1
Comment #17 by Anonymous posted on
Anonymous
Then are you saying that the Toby is not a good deal because of the harsh EWP?

1
Comment #18 by lou posted on
lou
If you put the money in the Toby CD and rates go up you will hate yourself, and if you don't do it and rates don't go up you will hate yourself. So you lose either way. So maybe you should flip a coin and then you can worry yourself sick about this for the next 7 years.
Too bad you got to share your neurosis with the rest of us.

9
Comment #19 by Anonymous posted on
Anonymous
I'm leaning toward doing the Toby for $203,000.

1
Comment #20 by Anonymous posted on
Anonymous
No, comment #19 wasn't helpful!

3
Comment #21 by gregk posted on
gregk
Did you see the anticipated "jobs added" number for June #19?  281,000, - the most in a year-and-a-half.  Things may be really ready to start ripping, with the wage growth pressure, inflation, and interest rate increases that implies to follow.  Lou may be right, you know.  A year from now Toby's 3% may be looking pretty paltry, and you'd be stuck with it throughout a potentially raging recovery and big jumps in CD yields (remember not so many years ago when even some RCA's offered 6% on your money?).  Perhaps not to be lured so impulsively into a long partnership with Toby might be more prudent given the present swirl.  If by the autumn it becomes evident we've merely been suckered by yet another false start you could go "all in" at Toby with quite a bit more comfort than now I would think, and wouldn't be losing out on so much during the interim.  Think it over is what I would say.

3
Comment #22 by Anonymous posted on
Anonymous
I think you make some very good points here.  I'm starting to think waiting until the autumn, maybe late September, might be a good idea.  Thanks.

1
Comment #23 by Anonymous posted on
Anonymous
Is the EWP so harsh at Toby that, if interest rates rose precipitously, if one closed the CD early and then took the EWP off their income taxes, that going in now would be too risky?

1
Comment #25 by gregk posted on
gregk
You have to make your own judgement.

3
Comment #27 by Anonymous posted on
Anonymous
Economic contraction in the 1st quarter was 2.9%. Temporary, maybe, but employers are adding part time jobs (Obamacare), wages are low and this is not the sort of real recovery one expects. Employment is back to 2008 levels...BUT the increase in population means we're still 7,000,000 jobs short of where we should be in a recovery. I see rate increases for a short period, a declining stock market, a market panic, rising inflation and a return to easy money. Addictions, after all, are addictive. 

1
Comment #28 by Anonymous posted on
Anonymous
Actual jobs added was 288,000.  Is jobs market slackness decreasing, and does this presage an increase in interest rates?  Does this mean this is not a good time to go into a long term CD such as the Toby 7 year?

1
Comment #26 by hoho (anonymous) posted on
hoho
Don't put all your eggs in one basket.  I wouldn't put that much with one bank for an extended period.  Maybe use it as part of a ladder. 

2
Comment #29 by Anonymous posted on
Anonymous
You could be right.  How about $100,000 only for now?

1
Comment #30 by Anonymous posted on
Anonymous
My (final) advice to you is not to fund the Toby CD any further until at least January 2015.  By then we should have much clearer indications about the strength of the economy going forward and the likelihood and timing of any interest rate increases associated therewith.  Then too, PenFed may well offer by that time their own traditional year-end CD deals with perhaps comparable yields (or greater, depending on the circumstances and outlook then)  to the Toby offer but for shorter durations and half the EWP.  Of course it's possible that things turn stagnant again and prospective rate increases remain the pipedream we've yet still to awaken from here.  But on balance things look to be bit perkier now than they have been.  I myself want to gauge for a time the strength and potential endurance of this apparent uptick in the numbers before collapsing into the arms of a 7 year 3% commitment.  Sure, - on $200,000 of your money you might alternatively earn 1% on for the remainder of the year the opportunity cost for standing pat now will be $2,000. But in my view the plausible opportunity cost over the next 7 years for committing now to a 3% yield for that period is much greater.      

3
Comment #31 by gregk (anonymous) posted on
gregk
My (final) advice to you is not to fund the Toby CD any further until at least January 2015.  By then we should have much clearer indications about the strength of the economy going forward and the likelihood and timing of any interest rate increases associated therewith.  Then too, PenFed may well offer by that time their own traditional year-end CD deals with perhaps comparable yields (or greater, depending on the circumstances and outlook then)  to the Toby offer but for shorter durations and half the EWP.  Of course it's possible that things turn stagnant again and prospective rate increases remain the pipedream we've yet still to awaken from here.  But on balance things look to be bit perkier now than they have been.  I myself want to gauge for a time the strength and potential endurance of this apparent uptick in the numbers before collapsing into the arms of a 7 year 3% commitment.  Sure, - on $200,000 of your money you might alternatively earn 1% on for the remainder of the year, the opportunity cost for standing pat now will be $2,000. But in my view the plausible opportunity cost over the next 7 years for committing now to a 3% yield for that period is much greater.     

1
Comment #32 by Anonymous posted on
Anonymous
Good advice; thank you.  I think I'll do nothing until January, 2015 on the Toby CD.  I agree with your advice.  The only part that won't work for me is the Pen Fed piece.  I'm FDIC maxed out in Pen Fed for four and a half more years at 3%.  I'll re-assess the Toby in January, 2015.  Thanks, again. 

1
Comment #34 by Anonymous posted on
Anonymous
I expect to have a better reading on the direction of interest rates in the next couple of weeks.
 

1
Comment #35 by lou posted on
lou
I like being a contrarian whe it comes to investing. Until recently, I felt that interest would stay low because most posters thought they had to go up in the near future. However, in the last 3 or 4 months, most posters have given up the hope of higher rates and have become convinced they will never go up. I would say based on this recent sentiment, rates are probably going up now that most people have thrown in the towel.

3
Comment #36 by James Barnes posted on
James Barnes
I agree.  The common wisdom is usually wrong.  

1
Comment #37 by Anonymous posted on
Anonymous
Didn't you ever hear "Don't fight the Feds".  Interest rates are going nowhere.  Our country's deficit will not allow it and the big banks are drunk with easy money and will not stand for higher interest rates. Like an addict on drugs.

4
Comment #38 by Anonymous posted on
Anonymous
Yellen has already sent signals that rates will not be used (higher rates that is) in response to risky investments (i.e. stock market speculation). Few in power can speak openly and clearly so we must read between the lines. The Fed under Yellen will not raise rates until inflation dictates it has no other choice. The Fed's real problem is how to reign in bond purchases and make sense of their historic balance sheet. The stock market loves the reported "numbers" but labor participation, economic contraction, and stagnant wages tell another story and the Fed knows it. Saying it is all but impossible.

4
Comment #39 by gregk posted on
gregk
I agree it will take sustained inflation (according to "official" measurements) over many months to move rates, which will then precipitate the next big financial crisis (the groundwork for such having been laid these past 6 years).  There is no concern by our leaders for the structural and long-term health of the economy but only fantasies or deliberate obfuscation (always related to the notion we can grow our way out of any problems, and thus don't need to alter our habits but only parry their effects for a short time).  An unstable economy and the attempts to manipulate it into performing typically lead to big swings and increasingly clashing interests, - my own expectation for the coming decades.  From the narrow perspective of CD investing and a conservatively oriented mindset, my only hope (or perhaps just wish) is that such volatility might result in some bump-up to yields over the next several years that I can exploit with soon coming available funds during that time for new 5-7 year lock-ins before the next deluge.  My fear is that such a mindset and strategy could turn out to be suicidal amidst any chaos, and that only a nimble footed and risk tolerant speculation will enable us to keep our chips in the game.  More likely perhaps is that things muddle along in our haven here as we both accept and grouse about our pittance and labor hard to squeeze out another one quarter or one half percent for our nest-eggs that manage to stay intact.  It's really the best that can be expected.

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Comment #40 by James Barnes posted on
James Barnes
Any manipulation of the cost of money(interest rates) is  always devastating. 

2
Comment #41 by Anonymous posted on
Anonymous
Based on your analysis, is this a good time to buy long term CDs?

1
Comment #42 by gregk posted on
gregk
Aaaaarrrrrggggghhhhh!!!!!

3
Comment #44 by paoli2 posted on
paoli2
#42  Have patience.  Sooner or later even Jepordy runs out of sensible questions to ask.  Maybe #41 is testing out patience with him.  Green "used" to be one of my favorite colors.  :)

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Comment #43 by Anonymous posted on
Anonymous
Go buy 10-year brokered CD's at 3.3% and be done with it. You receive interest every six months that you can do with as you please. Your 200K would generate $6600 a year. Enjoy.

1
Comment #45 by Anonymous posted on
Anonymous
Good answer for someone who had 200K to invest; however, the one continuously asking the questions does not have it.

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Comment #47 by Anonymous posted on
Anonymous
Interesting article posted by Ken on the Forum- Latest Posts board from the LA Times.  Interest rates could stay low for a decade.  Maybe that 7 year Toby doesn't look so bad after all.

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Comment #46 by Anonymous posted on
Anonymous
It could be a long time before interest rates rise.

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Comment #48 by gregk posted on
gregk
Even so #47, the LA Times article does note the Fed Policy Committee projections of a Federal Funds Rate at 1.5% by year end  2015, increasing to 2.5% by the end of 2016.  Still low by historical standards, but a substantial increase from 0%.  If that should prove true I would think we could all do better than 3% over the next 7 years, although who knows, - perhaps FI's will be grudging with mirroring any Fed hikes in their CD offers.  At this point I'm still resistant to being lured whole hog in by the Toby tease, and plan to just stand pat with it for the next 6 months.  By then I expect a better read on things going forward and will re-evaluate.  I'll admit not acting on it immediately does make me restless, as I'd like to be earning that 3% now rather than nothing, - but the countervailing dis-ease over potential future regret in the other direction still outweighs.  It's all a small stakes game in any case, and for my stock investing friends quite an amusing one.  I'll admit here to a small but enduring pocket of sentiment in myself that hopes they all get hammered.

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Comment #49 by Anonymous posted on
Anonymous
The Fed has to raise rates to stall the stock market. Otherwise, it won't be a 20% correction but another 40% drop. The transfer of wealth in the last four years has simply been amazing, especially since it was accomplished under this administration.

PS
I don't see 5% CD's at local banks for a very long time.

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Comment #50 by Anonymous posted on
Anonymous
 No 5% CD's at local banks for a very long time.

I totally agree.  Not even on the horizon!

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Comment #51 by Anonymous posted on
Anonymous
With the suspicion of interest rates may be on the rise in the future, it might be a good idea to barbell your cd's.  If rates rise, then your short term cd's can be reinvested in a higher rate.  If rates do not rise, then your long term rates are earning the best rate than you can currently get.

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Comment #52 by gregk posted on
gregk
A 4% 5 year CD in a couple of years time (with a 3+%inflation rate) is more plausible to me.  It's inflation that will potentially drive rates higher rather than (real) economic growth IMO.  5% CD's could only happen if that gets out of control.  It might. 

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Comment #53 by Anonymous posted on
Anonymous
I, too, cannot completely lose the hope that the stock market corrects.  When it does, we small stake players may look pretty smart.  Like Carl Icahn said: its better to make 1% than to lose 30%.

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Comment #55 by Anonymous posted on
Anonymous
Yes, but if a person had already gained a great deal more in the stock market than a serious correction would take away, they are still well ahead.  Timing is everything but it's all a big gamble.

No, I'm not in the market.  I am retired and like to sleep well at night.  It's been CD laddering for me which has worked well for me.  Getting rich isn't my goal, Not loosing my principal is more important to me. 

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Comment #57 by paoli2 posted on
paoli2
#55  "Getting rich isn't my goal"  I think getting rich should be everyone's goal but it all depends on what "rich" means to you.  The more money you have the less you will worry about loosing a bit of the principal and you certainly will do better on low interest rates than someone who has a lot less money.  I always make my goal much higher than I ever expect to reach so no matter what happens we will survive and I will still feel like a winner.

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Comment #58 by Anonymous posted on
Anonymous
In the long run, I think not losing money is the most important thing.

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Comment #59 by Anonymous posted on
Anonymous
#57, making as much money and saving as much money as I could was my goal during my working years.  And it worked out rather well by living below my means.  Now that I am comfortably retired, it is not the time to gamble with my lifetime of savings.  Greed is not good and most always will end badly.

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Comment #54 by Anonymous posted on
Anonymous
I think waiting six months is probably the way to go, but I hate making 1% for the next six months when I could be making 3%.

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Comment #56 by Anonymous posted on
Anonymous
But, see my comment at Ken's just posted CD report for this week.  I worry that Toby might change their add-on feature, AND IF I DON'T FULLY FUND THE CD NOW, I MAY NEVER BE ABLE TO FULLY FUND IT.

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Comment #60 by Anonymous posted on
Anonymous
If you are worried about the add on feature going away in the future and afraid of adding to it now in a large amount.  Put in an amount that is comfortable to you based on a percentage of your net worth.  For example, maybe 4%. 

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Comment #61 by Anonymous posted on
Anonymous
I hope his/her/it's net financial worth adds up to more than his/her/it's comments worth.

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Comment #63 by Anonymous posted on
Anonymous
my financial worth won't increase if toby ends the add on feature

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Comment #62 by Anonymous posted on
Anonymous
And, therefore one is only looking at the delta in rates and that is the potential "downside."

1