Fed Says It’ll Be Patient on Rates - CD Strategies for 2019

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As expected at the FOMC meeting, there were no changes in the federal funds rate. However, key language of the FOMC statement did change which sends a signal that the Fed will likely pause on rate hikes. The following sentence that was in the December FOMC statement is gone:

The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term.

The above sentence has been replaced in the January FOMC statement by the following:

In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.

All voting members voted for today’s policy decision. There were no dissents.

In addition to the change in the FOMC statement, the Fed issued a separate statement on balance sheet normalization. That too was looked favorably by the markets. The following is a key excerpt of that statement:

the Committee would be prepared to use its full range of tools, including altering the size and composition of its balance sheet, if future economic conditions were to warrant a more accommodative monetary policy than can be achieved solely by reducing the federal funds rate.

Fed Chair Jerome Powell’s press conference this afternoon reinforced the likelihood of a rate pause. In his opening remarks, he said:

the case for raising rates has weakened somewhat. The traditional case for rate increases is to protect the economy from risks that arise when rates are too low for too long, particularly the risk of too-high inflation. Over the past few months, that risk appears to have diminished.

The best chance that we will see one or more Fed rate hikes in the next year is if the economy stays healthy with continued improvements. Fed Chair Powell did say in his opening remarks that the outlook for the economy remains favorable even though risks have increased:

This change was not driven by a major shift in the baseline outlook for the economy. Like many forecasters, we still see “sustained expansion of economic activity, strong labor market conditions, and inflation near … 2 percent” as the likeliest case. But the cross-currents I mentioned suggest the risk of a less-favorable outlook.

Odds For a 2019 Rate Hike Plummet

The odds of a Fed rate hike sometime in 2019 plummeted after the meeting according to the Fed fund futures as shown by the CME Group FedWatch Tool. The odds that the federal funds rate will be higher by the September FOMC meeting are now 8.3%. This combines a 8.1% chance that the rate will be 25 bps higher and a 0.2% chance that the rate will be 50 bps higher. Yesterday, the odds were 23.3%. It’s clear that the market thinks the Fed has sent a message that they’re done with rate hikes.

Future FOMC Meetings

The next three FOMC meetings are scheduled for March 19-20, April/May 30-1, and June 18-19. The March and June meetings will include the summary of economic projections. All future meetings will have a press conference by the Chair.

Deposit Account Rate Predictions

As we saw in 2018, online savings account rates have followed the federal funds rates. We now have many online savings account yields between 2.00% and 2.50%. If the federal funds rate holds steady, online savings account yields will probably also hold steady.

Economic and inflation outlook are important drivers of long-term rates including CD rates. Concerns about the economic outlook have been driving CD rates lower in the last couple of months. For example, the top brokered 5-year CD rate in late November was 3.60%. That fell to 3.40% in early January. Yesterday, the top brokered 5-year CD rate was 3.15%.

Direct CD rates typically lag brokered CD rates. Thus, we haven’t seen widespread CD rate cuts at banks and credit unions. However, as I described in yesterday’s CD rates summary, several banks and credit unions that had been offering top 5-year CDs have made rate cuts in January. We may see more CD rate cuts over the next week since many credit unions make changes to their CD rates at the start of each month.

Deposit Account Strategies

I can’t say for sure, but it’s beginning to look more likely that we have already passed the rate peak of this cycle. It may be time to start moving money into long-term CDs. Many savers were hoping for the return of 4% CDs. We saw a few of them last year, but they didn’t last long. I doubt we’ll be seeing them for the foreseeable future. Currently, the top nationally-available 5-year CD rate is 3.63% APY (at Connexus Credit Union). My guess is that the top 5-year CD rate will be much lower a month from now.

Beware of overloading on short-term CDs. Since long-term CD rates aren’t much higher than short- and mid-term CD rates, the long-term CDs are a hard sell. However, when those short- and mid-term CDs mature, you may have to settle for much lower rates.

If you want to keep things simple for your safe money, CD ladders are a tried-and-true way to invest in CDs. The ladder ensures you take advantage of higher rates as interest rates rise. The ladder also ensures that you’re taking advantage of longer-term CDs that protect against falling interest rates. A few months ago, it seemed like we were a year or more away from peak rates. Now it looks like peak rates may have already passed. No one can predict future interest rates. A CD ladder is the best way to avoid having to play the interest rate guessing game.

There are a couple of strategies that can be helpful in this interest rate environment:

First, add-on CDs can be a great type of CD when there’s a significant risk of falling rates. The best add-on CDs for this case have long terms, small minimum deposits and large or unlimited add-on capability.

One attractive add-on CD that’s nationally available is the 5-year Term Deposit Plus account at Mountain America Credit Union. As of today, that CD has a 3.51% APY. Minimum deposit to open is only $5. It has a 5-year term, and add-on deposits can be made anytime as long as the CD balance does not exceed $100k. Also, automated monthly deposit of at least $10 is required. This 5-year add-on CD can be opened with just a $5 initial deposit and with $10 automatic monthly deposits. If rates fall, you can always fall back to this CD and add to the balance until the CD balance reaches $100k.

The second strategy is one that is well known to long-time DA readers. It’s choosing 5-year CDs with mild early withdrawal penalties (EWPs). If rates fall, you get the advantage of a CD rate that’s fixed for five years. If we get surprises in the economy that forces rates higher, you can always do an early withdrawal. With a mild EWP, the loss from the penalty won’t be too bad.

Using our CD Early Withdrawal Penalty Calculator, you can see what the effective yields would be on a CD when it’s broken early. For example, an Ally Bank 5-year CD that is opened today with a 3.10% APY would have an effective yield of 1.81% if the 5-year CD is closed early after one year.


Comments
HighYield
HighYield   |     |   Comment #1
Excellent report, Ken. I just locked up another 5-year certificate at my favorite CU. Thank you.
5 year CD
5 year CD   |     |   Comment #4
I did the same this morning.
HighYield
HighYield   |     |   Comment #12
Never hurts to have one good 5-yr CD on the back burner. It goes well with my short & mid-term ladder. I'm all set now. Now I can just relax, enjoy retirement, and end this chess game of rate chasing. (Greed is NOT good.)
Don't Laugh
Don't Laugh   |     |   Comment #76
7 years for me! 3.35%. Good thru the rest of The Donald, and good thru the coming four years of 1% rates - courtesy of Bernie or Kamala, etc!
What lol
What lol   |     |   Comment #82
1% rates are not dictated by a president.
HighYield
HighYield   |     |   Comment #85
What lol. True, but we just came off 8 years of zero interest rates when that "other" party had control of things. Lock in those long term CD's now!
ahimsa42
ahimsa42   |     |   Comment #77
the rate has dropped to 3.50% today and i just made it under the wire yesterday & got the 5yr/ 3.63%. still kicking myself for not taking the 4% in November but who would have thought things would turn around so quickly?
anonymous
anonymous   |     |   Comment #2
It's ironic how sluggish many banks were to raise CD rates when Treasury yields went up, but how quick they are to lower CD rates when the trend reverses!
Nothing
Nothing   |     |   Comment #3
And the likely 2020 FED rate change with the election is near zero
deplorable 1
deplorable 1   |     |   Comment #5
I still think that we will see a FED hike in June and Dec. Powell was told to tone it down in order to support the stock market and he complied. Either way I'm still not locking in long term CD's unless they are of the add-on variety. There are too many options to earn better than 5% with short term cash like bank bonuses, funding short term CD's with a rewards credit card etc. No way is inflation going to stay at 2% indefinitely unless the economy heads south.
#8 - This comment has been removed for violating our comment policy.
Never Trump Republican
Never Trump Republican   |     |   Comment #27
Wrong. Powell was told no such thing.

https://www.cnbc.com/2019/01/30/powell-says-the-fed-did-not-change-course-on-interest-rates-in-response-to-trump.html
Never Trump Republican
Never Trump Republican   |     |   Comment #29
One more:

https://www.washingtonexaminer.com/policy/economy/powell-dismisses-suggestion-that-trump-swayed-the-fed-we-wont-make-mistakes-of-character-or-integrity
deplorable 1
deplorable 1   |     |   Comment #34
Yep and the FED is also a 100% non political and independent entity. That is what we are all supposed to believe. The problem is that there have been many times that presidents have put political pressure on the FED and the FED has complied.
Never Trump Republican
Never Trump Republican   |     |   Comment #35
#34:

Plural "Presidents" ... Excluding the current occupier of White House, why don't you cite a few, and back up whatever you are citing with some credible links (meaning don't give links from Infowars or Britebart)
CuriousDave
CuriousDave   |     |   Comment #43
Such as when?
SMT1
SMT1   |     |   Comment #48
Of course, Powell wasn't literally told to do anything. He obviously doesn't have to be "told", to feel the political pressure and the pressures from a receding stock market. He also is never going to admit that he may partly be bending to political pressure which is clearly inappropriate to the function of his mandate. He also doesn't want to see the stock market crash since he wants to continue selling into a strong stock market, Federally owned stock securities purchased during the Obama years. As always, Powell will continue to look at the data and be patient, but it's a "tightrope" balancing act with all the parameters of his mandate plus background political noise.
Toolpusher
Toolpusher   |     |   Comment #66
Really? What a coincidence!
Cliff Sims
Cliff Sims   |     |   Comment #6
Do you think Powell lost his nerve?
DOA
DOA   |     |   Comment #7
Just more reason to ladder. Trying to wait on that highest rate before you go all in. Well that technique is real similar to trying to time the stock market.
Robb
Robb   |     |   Comment #13
@DOA I agree...quite a few people here were negative last year about locking into the 4% deals when offered yet for now that looks like a good move. The only guarantee about locking into short term deals is more work and lower rates over the short term. Beyond that it's a crap shoot.
Hoody
Hoody   |     |   Comment #9
Well that didn't last long.

I knew this was going to be a short lived run, But I thought it would at least go to sometime in 2020 before it dropped off. Since it took near 10 years to go from 0 to 3% on CDs.

It doesn't surprise me how fast the rates dropped, the gas stations do the same thing when the price of oil goes up a penny and than it drops a penny.

It's weird to see how giddy the money show talking heads are over this. Like Steve (I love the low rates and qe) Leasman, or Bob (it's always better than expected) Pasani

OH well, I guess 3 to 3.5% is better than what it was.
deplorable 1
deplorable 1   |     |   Comment #10
3.5% isn't good enough for me personally. I'll put it in monthly paying dividend stocks before locking in at rates that low. 4% or bust. We may even see short term CD's or liquid savings accounts that high before too long.
Kojak
Kojak   |     |   Comment #11
Ha! I'll have a full head of hair before we ever see savings accounts at 4%. But I give you props for being so optimistic. Don't worry, Hillary will fix everything.
Kojak
deplorable 1
deplorable 1   |     |   Comment #14
I have many capped 5% savings accounts currently, maybe that's why I'm so picky.
Really?
Really?   |     |   Comment #19
Find that hard to believe without any details and names of financial companies.
Deplorable Fan
Deplorable Fan   |     |   Comment #23
Deplorable has written about this many times!!

He is the most successful investor fora reason.
deplorable 1
deplorable 1   |     |   Comment #30
I have 8 Insight card(Republic Bank of Chicago) 5% savings accounts which are capped at $5,000 but continue to earn 5% on the interest above $5,000 so they are not actually capped. These are no longer available unless you are grandfathered in. I also have 10 Netspend type 5% savings account capped at $1,000. Next I'm getting the DCU 6.17% capped at $1,000 savings. All totaled that should be around $56,000 earning 5% with the interest.
Never Trump Republican
Never Trump Republican   |     |   Comment #32
#30:

I suspect you are lying. Didn't the program by Insight for 5% for 5,000 was terminated last year - I think In July 2018.
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deplorable 1
deplorable 1   |     |   Comment #36
Seriously? Why would I lie? Look here I opened my accounts by phone.
https://www.doctorofcredit.com/insight-is-only-closing-5-apy-accounts-opened-online/
I'm waiting fo a apology.
Never Trump Republican
Never Trump Republican   |     |   Comment #37
For once you are right. I apologize.
deplorable 1
deplorable 1   |     |   Comment #39
Wait so did hell just freeze over? lol Well it sure feels like it here in Michigan anyway. Thanks NTR.
Never Trump Republican
Never Trump Republican   |     |   Comment #40
#39: If I am wrong, (which does not occur frequently) I do apologize.

Polar Vortex does not move south to come over the US frequently either.
DCGuy
DCGuy   |     |   Comment #95
Yes, hell has literally frozen over. The end is near.

https://www.newsweek.com/hell-frozen-michigan-polar-vortex-extreme-weather-cold-ice-snow-1313082
deplorable 1
deplorable 1   |     |   Comment #38
I said they are no longer available for NEW customers but that I have been grandfathered in. Those who opened their accounts online all had them closed. I wasn't able to open mine online as I kept running into a error so I opened mine by phone. Luckily it worked out for the better.
Never Trump Republican
Never Trump Republican   |     |   Comment #41
Good for you ... Really ... I had to close mine.
deplorable 1
deplorable 1   |     |   Comment #42
I got lucky. There was supposed to be a limit of 2 accounts but when they switched banks from Axiom to Republic bank of Chicago I was able to get 4 for me and 4 for the wife. They may still be alive if you got a card from a "partner location". Nobody really knows for sure as their has not been a definitive data point on that yet.
#184 - This comment has been removed for violating our comment policy.
effort minimization
effort minimization   |     |   Comment #46
Seems like a lot of finagling to me. 18 accounts to maximize the gain on just $56K?
deplorable 1
deplorable 1   |     |   Comment #97
The Netspend accounts used to all be capped at $5,000 not $1,000. There really is no work once they are set up.
SMT1
SMT1   |     |   Comment #49
I commend you on all your hard work. You obviously love this banking game! 18 savings accounts to earn a couple percent more on $56k. Seems like a lot of work and accounting. Perhaps you were an accountant in your career? Honestly, no sarcasm implied.
Notworththetrouble
Notworththetrouble   |     |   Comment #50
@49

Add to that all the other accounts he claims to have. Most be really desperate for income or in love with money more than anything else. Why else would someone want so many accounts?
Deplorable Fan
Deplorable Fan   |     |   Comment #51
Please STOP bashing Mr Deplorable!

Some people are born for success! Respect!
SMT1
SMT1   |     |   Comment #53
I for one wasn't bashing, but it is a lot of work for the payoff. That said when it is also fun and a hobby for someone like it seems to be for D1...that's also the payoff.
deplorable 1
deplorable 1   |     |   Comment #99
@SMT1: Yeah this really is like a hobby for me and I enjoy it. The $40,000 from the Insight cards is also growing because the interest earns 5% as well. So that has grown to about $44,000 and it keep increasing each year. I had these when interest rates were 1%. So back then the interest I was earning on $40,000 Insight savings plus $50,000 in Netspend savings($90,000 total) was the equivalent of having $450,000 in a 1% MMA. So much for not being worth the effort on such a small amount.
SMT1
SMT1   |     |   Comment #126
@D1: Why does the interest rate stay at 5% when that is double the current rate on the best savings/checking accounts?
"...equivalent of having $450,000 in a 1% MMA". Good point!
deplorable 1
deplorable 1   |     |   Comment #128
@SMT1: These prepaid debit cards are marketed to the "unbanked" so the savings account attached to them is a necessary loss leader. The card acts exactly like a checking account and can be linked for free ACH transfers using a 3rd party bank. They have been at 5% locked since inception which was when interest rates dropped to 0%. I also got a $20 bonus for opening the Netspend cards and you can earn $20 with a referral link after someone loads $40 on the card. You can then refer your spouse/kids/friends and they get $20 and you get $20. I earned $60 in bonuses for opening my firs 2 accounts. If anyone would like to earn $20 for opening a Netspend card for the 5% savings here is my link:
https://www.netspend.com/get-a-prepaid-card/?aid=RAF_1&site_id=RAF_OAC_URL&uref=4332790133
All you need to do to keep the account fee free is to set it to the "pay as you go" plan $0 monthly fee and have a transaction every 3 months. I automate $1 on the card each month. For step by step detailed instructions go here:
https://financialpanther.com/netspend-account/
Some folks balk at the small amount but if interest rates go back to 0% these guys will still be earning 5%.
SMT1
SMT1   |     |   Comment #133
@D1. Thanks for the information and links. I have gone after credit cards that give airline miles and a B of A credit card that gives back $200 after you spend $500 on the card. 40% return and about 30 seconds to sign up on the internet.
Huh?
Huh?   |     |   Comment #57
Seems like it would be easier, and more profitable, for him to just get a paying job?
Get Real
Get Real   |     |   Comment #54
#49 Add up all of deplorables declared savings and CD accounts and the number is incredibly high. Don't forget his famous GM notes ;)
Deplorable Fan
Deplorable Fan   |     |   Comment #55
Deplorable's commitment to success should encourage the rest of us to "be best."

Thank you Deplorable for your LEADERSHIP!
aaa
aaa   |     |   Comment #90
Ha ha ... On 56k @ 5% what's the monthly interest please?

Will that be sufficient for family of 4 to have couple of meal out?

Some leader .... ha
aaa
aaa   |     |   Comment #92
#46, #49:

Sounds like lot of work. At the minimum s/he will get 18 different 1099s. And all of this for what? Maybe s/he is just trying to get few a few Starbucks coffee.

Or maybe not, because now that Howard might run against Donald, I doubt if deplorable will be open to visit Starbucks and spend his hard earned - really really hard earned - bucks at Starbucks.
deplorable 1
deplorable 1   |     |   Comment #98
@aaa: Most of the 1099's are combined since they are coming from the same bank. I have been getting stacks of 1099 INT's for decades from rate chasing and bank bonuses anyway so no big deal for me. Multiple stock trades are much harder to report than interest since you need the cost basis. I also do my own taxes for free with the printable forms on IRS.gov and I'm sure you guys think that is a waste of time too. I find it useful for tax planning. This isn't like work but more of a hobby. To me real work involves sore muscles and sweat.
deplorable 1
deplorable 1   |     |   Comment #94
@SMT1: Funny you should mention that as my dad was a CPA with a masters in taxation. I guess I learned from him. As far as effort goes once these account are set up and you have the automated $1 transfers set up there is really no work required other than checking the interest and moving it out periodically. To me it's fun beating inflation. I used to be a machine builder working 18 hr. days in a hot shop so to me calling this work is kind of funny.
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SMT1
SMT1   |     |   Comment #127
@D1: "...To me, it's fun beating inflation".

By the same token, it's fun to beat the tax man. When I was in business I would purchase Thomas Reuters Internal Revenue each year @$450/year to keep track of any changes year to year in the tax code. I didn't want to totally depend on a CPA. I don't buy it anymore, but with inflation, it now sells for $957.
deplorable 1
deplorable 1   |     |   Comment #129
@SMT1: I think it's funny that people actually spend $100 on tax software/efiling etc. each year when I do it for free. For me it's like second nature though since I grew up helping my dad do tax returns every tax season. I also would recommend hiring a good CPA for anyone who owns a business as tax laws change constantly.
#186 - This comment has been removed for violating our comment policy.
#185 - This comment has been removed for violating our comment policy.
Bueller
Bueller   |     |   Comment #44
Four rate hikes in 2019. Anyone, Anyone. Deplorable. Anyone?
deplorable 1
deplorable 1   |     |   Comment #115
@Bueller: I wish but it looks like one hike in June and one in Dec. and that's only if we get lucky and the economy is still rolling along. I have a hard time believing that the FED is going to go from 4 hikes in 2018 to 0 hikes in 2019. As always inflation will be the key.
CuriousDave
CuriousDave   |     |   Comment #45
As the Fed indicated, it depends on how the economy fares and how inflation behaves. The 3.5% or so for 5 year deposits is not going to make any of us rich, but at least it's comfortably above the last posted inflation rate. Let's remind ourselves that fixed income vehicles are intended for conservative money.
PabloSavin
PabloSavin   |     |   Comment #123
Actually 3.5 for 5 years may make you richer if you have enough money, just saying
Robb
Robb   |     |   Comment #15
@Hoody...have to say this had to be about the fastest Fed pivot that I can recall...going from 3/4 rate hikes in 2019 6 weeks ago to 0 now.

I still say inflation is much higher than you'll ever see the government report on the headline numbers so they can avoid passing along COLA's to those who need it the most.
Cliff Sims
Cliff Sims   |     |   Comment #17
Why was this fed pivot so fast?
Robb
Robb   |     |   Comment #69
@CliffSims...a combination of factors...weakness in global markets (Asia and Europe) in part due to the trade situation, Trump bullying the Fed the past few months although Powell would of course deny that...take your pick.
Hoody
Hoody   |     |   Comment #18
I hear ya Robb.... I feel the same about the BLS and the Fed.

The main problem today is there are so many people that are in this market game for one reason or another, any drop has a negative impact, especially with all the workers moved into it due to all the 401k's now instead of regular pensions like we had.

But it's the pension plans that suffer when rates are held this low so long also, and can also end up causing problems for a lot of people.

That's why none of them know what to do anymore, either way they painted themselves into their own corners.

It is what it is, we made it the past 10 years, we can adjust for a few more :)
I Like Coke
I Like Coke   |     |   Comment #20
I got two COLA's in 2018.
7-Up
7-Up   |     |   Comment #63
I agree with Coke. Both my retirement accounts received a cost of living adjustment in 2018. And one is due for another in May this year.
Roswell, New Mexico
Roswell, New Mexico   |     |   Comment #21
Here we go with the government conspiracies again.
HighYield
HighYield   |     |   Comment #22
Be nice, roswell. Everyone is entitled to their personal opinion and theories.

Frankly I'm actually kind of relieved that rates have leveled off, somewhat. I set it, and now I can forget it! I'm good for at least the next 6 years. Now I can go find another "hobby." :-))) Worrying about money just becomes a big pain in the rear.
Robb
Robb   |     |   Comment #70
SS has lost about 34% of it's purchasing power since 2000...COLA's have NOT kept up over the long run:

https://www.cnbc.com/2018/07/26/social-security-buying-power.html
Daniel2000
Daniel2000   |     |   Comment #24
Good thing I set up Connexus @ 3.63 locked in for 10 days for the 5 year CD...I had a lot of $ maturing @ PenFed and I think going long on the 5 year notes is a good idea?
ddbrege
ddbrege   |     |   Comment #26
Yep, me too. That 3.63 will be history tomorrow and if anyone reads Morningstar or is interested they had an interesting article about the Fed and interest rate trends for 2019.
SYC
SYC   |     |   Comment #67
Your "prediction" turns out to be correct. Connexus's 5 year CD is lowered to 3.50% today along with 3 year CD to 3.2% (was 3.35%).
Break the Addiction
Break the Addiction   |     |   Comment #71
We can all relax now. Rates are starting to decline again.
Don't Laugh
Don't Laugh   |     |   Comment #72
I just bought a 7 year cd! 3.35%. Good thru the rest of MAGA, and good thru the four years of 1% rates of Bernie or Kamala. LOL!
What lol
What lol   |     |   Comment #84
Again, rates are not controlled by the president. You only make yourself look foolish continually claiming that.
#87 - This comment has been removed for violating our comment policy.
Rocky
Rocky   |     |   Comment #177
Isn’t the best 7 years at 3.45, any reason to go for 3.35%?
111
111   |     |   Comment #25
First of all, this was yet another excellent write-up of Fed activities by Ken Tumin.

Secondly, following is a somewhat contrarian viewpoint. Not contrarian in the sense that I think the Fed is unlikely to do a "pause", or that Ken is wrong, but in a different sense.

Tip O'Neil, the Democrat Speaker of the House during much of Ronald Reagan's presidency, had a "most famous quote" (as have many of our politicians throughout history, for what it's worth). It was "All politics is local". To paraphrase that, let's examine whether many (note, I didn't say "all") interest rates also have a serious "local" component.

Local and regional financial institutions have very different needs, and therefore act differently, than do money-center banks, and we see that evidence in the history of depositaccounts.com. In 2015 we saw Northwest FCU offer a 3%, 3-year CD (unfortunately capped at $100K); in late 2016 Andrews FCU offered a 3%, 5-year CD (6-month EWP); and last year we saw Sharonview FCU offer a 4%, 64-month (1 year EWP), and later in August Keesler FCU offered a short-term 5% CD. I took advantage of each of these. (In Fall of 2018 we also saw a couple of 4%, 5-year CDs, as I recall with 6-month EWPs, which I was not smart enough to take advantage of quickly enough.)

All these were well-documented by depositaccounts.com, and more to the point all paid well above the prevailing interest rates of the day. Shall we say, a "spikiness" (i.e., increased SD) on the upside?

The point? That local or regional FI rates matter, not just the national, and that if one is willing to step slightly outside their "comfort zone" they might profit. I very much suspect that if someone were to do an academic-type study of these top rates versus, say, the top brokered CD rates, one would find that by following the top depositaccounrts.com rates, one would have made out better. And, they would have come out better in most cases than by simply creating a "rote" CD ladder procedure.
Daniel2000
Daniel2000   |     |   Comment #28
You were very lucky to be liquid in cash when those very few-day-long opportunities such as Kessler and Sharonview came around. Most people are in other investments of sorts. I was able to go into the Kessler for $250K which I thought was the limit at that time. I wonder what will happen when Kessler matures in March 2019 I think...
Mike
Mike   |     |   Comment #56
I disagree with your findings. The report presented here is just an abbreviation of the news that the biased media spews every day about the hate for Trump. Nobody gives credit to Trump, but he single handedly stopped the FED from running this country into the ground. Nobody looks it from the real perspective, this nation is bankrupt and you are all salivating for higher interest rates. Do you know that we (you and I) pay at the moment $650 billions per year of interest only on the national debt.
What do you think will happen to the value of the dollar and your savings when we have to borrow and borrow and borrow in perpetuity just to pay the interest only, forever?
Being selfish is OK in your household, but demanding easy life and higher standard of living without work is counter productive to all of us. The real story here is that our president knows what is good for us and our country, the FED is just another foreign entity that creates money without cost (electronic entry) and collects real money back and distribute them to the globalists who in return enslave us more and more by making us borrow more and more.
There got to be an end to this nightmare in America. You do not have to like Trump to see how much he loves our country and works for us. Yes he threatened the FED, that they may be on his chopping block, but that was the only option at this time.
If we can get read off the FED, this country can prosper like never before in the past.
Obama was RIGHT
Obama was RIGHT   |     |   Comment #68
YES!

OBama was RIGHT to keep interest rates so low!
Robert
Robert   |     |   Comment #79
#68, Obama was clueless, he received his orders from the globalists and had no idea how the economy worked.
Monopoly money
Monopoly money   |     |   Comment #106
#68, Obama was wrong, he borrowed from the FED $10 trillions thinking it is just a number and he did said that we do not need a borrowing ceiling, same thinking as any democrat out there. Incompetent Obama did put us in the present peril.
deplorable 1
deplorable 1   |     |   Comment #117
Obama is the reason that rates are not back to 5% currently. Doubling the debt is killing bank rates. If it wasn't for our debt Trump would not be putting pressure on the FED to stop hiking rates. Yeah I know Bush is responsible for the debt as well but Obama killed the rates folks.
Morton
Morton   |     |   Comment #136
Mike, you are correct, MSM does not allow the truth be told, therefore, I will just agree with what you said. One of these days, they will tell the truth, but it will be to late for the blind savers on this blog. I can not understand why this blog blocks the truth either, they missed the opportunity to be leaders on the money info too. If you disagree with Ken, your post is deleted as not meeting the requirements of some sort. Good work Mike.
Jerry
Jerry   |     |   Comment #140
Right on the money Mike, agree, dollar reset is coming and the people here bicker about 1-3% interest rates, without realizing the FED notes may become of little value in future. Getting your info from television will make you dumber than a stone.
Never Trump Republican
Never Trump Republican   |     |   Comment #31
Because of questionable Trade War initiated by ex UC Irvine professor and the Enemy of Savers, the economic activity is faltering. If the tariffs really get doubled in March, then effects will be felt by the ordinary 'main-street' Americans. FEDs have responded to the present change, and the likely change.

This is not a great news for us - the Savers.
Nothing
Nothing   |     |   Comment #52
Your ex prof boasted about living in Puerto Rico and paying no taxes there...he spent some time during year in Connecticut too
Benta
Benta   |     |   Comment #59
The tariffs work in our favor. We do not need useless and poisonous toys and inferior products that break upon the first use. We can live without them, but China needs our technology (stolen or not) to survive. As long as we are energy and food independent country, we can negotiate from point of strength.
Never Trump Republican
Never Trump Republican   |     |   Comment #110
You forgot our stockpile of WMDs.

I for one worry about the finger of the "small hands" that are on the nuclear button.
deplorable 1
deplorable 1   |     |   Comment #118
Funny because Clinton actually lost the nuclear codes.
https://www.businessinsider.com/bill-clinton-lost-president-nuclear-codes-and-nobody-found-out-2018-1
WhoKnew??
WhoKnew??   |     |   Comment #119
Not funny at all. He was probably preoccupied in the White House.
Karma
Karma   |     |   Comment #122
#118, the Clintons never lose anything, they sold them to the highest bidder.
Anon
Anon   |     |   Comment #125
From your article: "The President never did have them, but he assumed, I'm sure, that the aide had them like he was supposed to."... Sounds like President themselves don't have the codes - they have the military aide with them that have the codes. Not like the President is running around with that briefcase that has the codes.
Patriot
Patriot   |     |   Comment #141
#125, you are wrong, there are 3 sets of codes:
a) The president
b) The General of the launching devision and
c) The launch command person

All 3 codes must be entered within 3 minutes in order a launch to happen. I know, I was in ND on a silo assignment.
Gerry
Gerry   |     |   Comment #61
There is no trade war, this is what China is all about:

https://www.nbcbayarea.com/news/local/Another-Apple-Engineer-Accused-of-Stealing-Autonomous-Vehicle-Trade-Secrets-505055701.html
Robert
Robert   |     |   Comment #78
Gerry, being politically correct and promoting diversity, will destroy this country.
aaa
aaa   |     |   Comment #88
#78:

Right. See how diverse China is and destroyed it is.
Simms
Simms   |     |   Comment #104
aaa, what's your point, China has very streak immigration policy and if you are not born in China, your chances to clime the social and economic steps are next to ZERO. You never get government job or high tech job, only the stupid Americans allow the foreigners to collect the know how of any technology and send it back to their Mather country.
#120 - This comment has been removed for violating our comment policy.
john
john   |     |   Comment #47
it does not pay to save, spend all and join the many on free medical,free coll,free utility ,go to nj more than 50 % on nj family care with free state coll
Mike
Mike   |     |   Comment #58
Being socialist works only when other socialists are willing to pay for your expenses, then what, communism?
When all of you become socialists, there will be nobody to pay for your freeloading and eventually you all starve or freeze to death.
That ideology never worked, never will.
Sett
Sett   |     |   Comment #60
John, where do you think the money comes from, for all of those social programs? If the state can not collect enough money, all those programs will be discontinued at a whim and there you go, homeless, hungry, rejected from the society. Is that is really what you want, no future?
Robert
Robert   |     |   Comment #81
Hmmm, depending on others to take care of you, never works, go and visit Venezuela, N Korea , Cuba, most of the Africans nations and other socialist countries then come back and brag about it. China throws the parasites in jail or work camps for such ideology, even dough they are controlled by the communist, they do not like lazy people, everyone must contribute to the society in order to survive. The communist's mantra in China is: You can not depend on others for your own laziness, work or perish, there are no welfare programs.
#86 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1   |     |   Comment #130
The taxes on our savings/earnings/investments pay for all the "free" stuff for the lazy and incompetent who rely on the government for their survival. In effect by being successful we are all donating to the "charity" that our federal government has become. If we stop earning they stop getting. So who is actually more caring the Capitalist or the Socialist?
#134 - This comment has been removed for violating our comment policy.
steve_okc
steve_okc   |     |   Comment #62
1 month ago we retired & moved from SO CAL. to the Oklahoma City area. So last week I decided to lock in all the remaining funds & with using Kens "Maps of US Banks" site I was pleasantly surprised at all the local banks & CU I found available to use within a 20 min drive that had above 3% rates. I locked in a 5 year 3.82% cd from a CU. This CU was only available to certain counties within OKC & found out I was in one.
So now that I have the Sharonview 4% & the Allegiance CU 3.82%,I am also done rate chasing for 5 years now. I also was able to find good rates on the Map site for years in SO CAL before the move.

I did find a backup a top rate 5-year CD that is still available to anyone, but you will have to go to the bank to open the cd. It has to be new money & It comes 2 ways, fixed rate of 3.75% & a variable rate of 3.50%. The variable rate would be good for all those folks that are waiting for more 4-5% rates to come. your locked in at 3.50% & will go up as rates go up.

The bank is in Texas for the folks in the surrounding areas that would like to make a road trip.
Here are the links.
5 year 3.75% .....https://www.fgb.net/our-cds-are-hard-to-top
5 year 3.50%.....https://www.fgb.net/variable-cd

Thank you Ken for your great site & map.
Steve
Marty
Marty   |     |   Comment #64
I congratulate you Steve, just by moving out of the socialist CA you are a winner. Thanks for the links.
deplorable 1
deplorable 1   |     |   Comment #131
Nice move but just remember not to vote for Democrats unless you want higher taxes there as well.
me1004
me1004   |     |   Comment #65
Well, with this change, it seems to me saving money in a bank account is going to be stupid from now on, rates are not going to return to a level that justifies putting money in a bank account.

It was one thing to wait on rates to return to such a level in a reasonable number of years -- a number of years we passed long ago. But now, to stop excruciatingly slowly raising rates in the face of better than full employment, a booming economy, a pretty good outlook even if some bumps along the way -- it is clear we will never have bank savings rates at a level to justify saving money in banks.

A shame. Savers are simply being exploited and robbed. 2% does not justify handing over your money. 3% does not justify handing over your money. 4% is a joke, but you might bite the bullet and save, but it is not acceptable. But they are now stopping even with rates at preposterously low levels, shockingly low levels -- and even raising the topic of again focusing on an "accommodative" monetary policy.

How much better than a booming economy do we need before savers -- I mean suckers -- can have a legitimate return on their money?
Don't Laugh
Don't Laugh   |     |   Comment #73
I just bought a 7 yr cd! 3.35%. Good thru the rest of MAGA, and good thru the coming four years of 1% rates, courtesy of Bernie or Kamala!
Rocky
Rocky   |     |   Comment #178
Why would you go for 3.35 when 3.45 is available?
HighYield Fan
HighYield Fan   |     |   Comment #74
me1004, was your previous username HighYield??? I like your words!
Nothing
Nothing   |     |   Comment #75
Wow! In any recovery rates are low. Save more! Repeat after me..save more! Unless and until that mindset risks are your rewards! Bank of Mattress
Anon
Anon   |     |   Comment #80
So, where do you propose to keep the money? Stock market (near 30 on Shiller PE for US)? Bonds?
Robert
Robert   |     |   Comment #83
I keep mine in real estate, precious metals, foreign currencies and some cash.
Mak
Mak   |     |   Comment #89
The stock market depends on the fed so if the fed is on hold and talking dovish then the market will go higher, maybe not in a straight line but low rates equal higher market.
Columbo
Columbo   |     |   Comment #91
Uh, just one more thing.......

Lock in those long term rates NOW!

Before the Dems start running things in Jan, 2021.

God help us!
Cliff Sims
Cliff Sims   |     |   Comment #93
The fed has once again buckled. Will they ever raise rates to where they should be?
veryu
veryu   |     |   Comment #112
yeah, insured savings are actually guaranteed to lose money after inflation, while stocks are actually insured, and savings are taxed more than investments. I think it's best for savers to leave the country while their dollars still have a favorable exchange rate, America is for billionaires and poor migrants.
deplorable 1
deplorable 1   |     |   Comment #132
I agree with you which is why I collect 5% plus capped savings accounts. I continue to keep liquid cash though for bills, bank bonuses and once in a blue moon outstanding CD specials. The real problem here is that four letter word DEBT. If we do not start down a sustainable path to paying it down I fear we will never see decent interest rates again. To the "save more" crowd: Not everyone has the earning capacity to save the millions required to live off of low rates particularly if they lose the compounding effect of time on their savings. We were lucky and had 5% plus rates while folks just starting out today don't have that luxury.
Human
Human   |     |   Comment #96
Our system requires and must have a totally independent Fed without worrying about what happens to the market or any political pressure from any sides to make a correct monetary policy. I have said this before and must repeat myself, the Fed can't sit idle when the inflation goes up, that has been kept moderate because of artificial low oil prices. If the economy is as strong as the Fed claims to be then he can't keep the rates low because market may crash, otherwise market will eventually crash regardless of Fed's decision, but the consequences would be much more devastating.
Nathan
Nathan   |     |   Comment #100
The system require dismantling the FED, otherwise we all become poor with worthless savings. The life of the FED is finished, they can no longer rob the people of new money and taxes that goes to the globalists.
Indefinite printing and borrowing makes the FED dependent on new money from the Americans and we are already bankrupt. There comes time when this set up must end and the money given back to the people and not the bank of England. If you like to verify this statement as true, please do some digging on your own.
larry
larry   |     |   Comment #101
Human (Comment #96) Exactly, the Fed is between a rock and hard spot. Economy still humming, energy prices are low, but the Fed is running a ridiculous balance sheet of 100-1 leverage! You've all been warned we are in uncharted waters.
FED is the problem
FED is the problem   |     |   Comment #102
larry, the FED is the problem and not the answer for the problems they created. Manipulating the rates to favor one side only, makes the FED biased or criminal entity. They give you money out of thin air without any assets or money in possessions to make them responsible in any way, but they want the money back with interest as usury for their service. Enslavement has to end. The Rothschild's are laughing at the stupid Americans.
BeyondUs
BeyondUs   |     |   Comment #103
Don't let it eat at you. You and Nathan have to learn to live with the Fed's manipulation. The system is not going to change.

I don't like it either, but I also recognize what is beyond my control.
Be smart
Be smart   |     |   Comment #107
#103, if a robbery occurs in your residence, time after time, you are OK with it or you will want to end it sooner or later?
URnotsosmart
URnotsosmart   |     |   Comment #111
Comment #107 is irrelevant when it comes to the Federal Reserve.

1. What the Fed is doing is legal under the law, not illegal robbery.
2. The Fed is not showing up in person at my residence to personally rob me.

Like I pointed out, although I don't like the Fed's manipulation, I have absolutely
no control over it. However, I refuse to let it fester and eat at me.
Karma
Karma   |     |   Comment #121
#111, I see, you just want to be ordered around what to do and obliged promptly, in that case, this is the woman who will decide your future:

https://news.yahoo.com/rep-ilhan-omar-supports-taxing-wealthiest-americans-90-135004259.html?guccounter=1

Diversity creates karma.
Patriot
Patriot   |     |   Comment #142
#111, obviously you do not know that the FED mandate has been suspended, but there is time to learn about it, just abandon the MSM and do the search for yourself, if you know how that is. The globalist's agenda controls the MSM and they want you to be misinformed not informed of the truth.
Brokered
Brokered   |     |   Comment #113
The FED did not pause because of the stock market. They paused because there is a world-wide slowdown underway and they did not want to immediately sink the economy with higher rates. A recession is inevitable, the FED knows it, they waited too long to raise rates and now they're stuck with a rate below what is euphemistically called "normal".
interested
interested   |     |   Comment #114
Thank you Ken for the analysis & suggestions.
#116 - This comment has been removed for violating our comment policy.
#124 - This comment has been removed for violating our comment policy.
Dan Coates
Dan Coates   |     |   Comment #143
Will yesterday's blockbuster jobs report test Powell's "patience" on holding off on interest rate tightening?
deplorable 1
deplorable 1   |     |   Comment #146
It will be interesting to see what Powell's comments will be after the March meeting since the jobs numbers are so good and inflation should be rising. He has already telegraphed a pause in March but this should put a rate hike in June back in play.
Dan Coates
Dan Coates   |     |   Comment #144
Would it be the greatest irony of all if inflation started to take off just as Powell ended his rate tightening?
Piee Tin
Piee Tin   |     |   Comment #145
No, it would not be the greatest irony, or even an irony. The Federal Reserve has never gotten an interest rate cycle correct, and undoubtedly will be wrong here as well.

Exactly how the Fed will be wrong, nobody knows.
Dan Coates
Dan Coates   |     |   Comment #147
I have no doubt that they are wrong again. They waited way too long to tighten. Now they are far behind the curve. They should be tightening agressively. But because they cannot resist the slightest pressure from Wall Street, they are pausing. Unless they tighten, agressively, immediately, we will soon have lethal inflation.
#148 - This comment has been removed for violating our comment policy.
Brokered
Brokered   |     |   Comment #149
#147
Ok, let's increase the 2018 1.9% inflation rate by 50%. That would be 2.85% and not much of a worry since many use 3% inflation for financial planning.

Where, exactly, do you see inflation pressures developing?
Dan Coates
Dan Coates   |     |   Comment #150
The increase in jobs and the upward movement in wages.
#151 - This comment has been removed for violating our comment policy.
irony?
irony?   |     |   Comment #152
No irony, even a stopped clock is correct at some point in time.

Unfortunately, some people have nothing better to do and mistake this for a "social media" site.
#153 - This comment has been removed for violating our comment policy.
Dan Coates
Dan Coates   |     |   Comment #154
I hope you are not surprised when the fed turns out to be wrong once again.
Piee Tin
Piee Tin   |     |   Comment #155
Thank you Dan, for admitting you were wrong when you said Fed's error would represent an irony.
#167 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1   |     |   Comment #156
What would be great is if the trolls on here could please point out exactly where or what I have been wrong about.
1. Trump winning the last election?
2. The tax cuts that followed?
3. The rising interest rates I predicted?
4. Not locking up 7 yr. CD's at 3%?
5. The 4 FED hikes in 2018?
Come on you geniuses all you guys do is criticize others while providing 0 insight or useful information. Come on boys bring it.
#157 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1   |     |   Comment #159
No we locked in 3.15-3.25% short term or add-on Cd's and liquid cash is 2.5% or better depending where you put it. 2019 isn't over yet and 4% plus CD's can still return later this year particularly with that last jobs report. Not to mention my liquid cash doesn't sit idle for long as I do various bank bonuses earning way over 5% ROI and credit card funding of short term CD's can yield better than 5% as well.
Piee Tin
Piee Tin   |     |   Comment #161
yeah yeah yeah dr deplorable.

every day you talk about 2.25% and 2.5% and your now infamous gm rights notes yielding a whole 2.75%
deplorable 1
deplorable 1   |     |   Comment #162
So lock up your funds at 3.5% if that makes you happy nobody is telling you what do. There is no right or wrong stop knocking some alternative ideas.
#163 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1   |     |   Comment #166
So I am wrong to be earning 5% plus on liquid cash instead of locking up 5 year CD's at 3.5%? Or 10% plus on bank bonuses or 5% plus on short term Cd's with a 2% cash back credit card? Seriously how have you proven that I'm wrong? All I was saying is to each his own. I wasn't ripping on people for locking in 4% CD's I could understand the safety of that.
Milty
Milty   |     |   Comment #165
Agreed. Whether you're chasing multiple low-capped/higher rate accounts or a couple no-capped/lower rate accounts, do what makes sense in order for you to follow your bliss and sleep at night.
agree w/ #151
agree w/ #151   |     |   Comment #158
repeating the news channels info is not predicting
deplorable 1
deplorable 1   |     |   Comment #160
The MSM has literally gotten everything wrong for the past 3 years so what news channels have I been repeating?
#164 - This comment has been removed for violating our comment policy.
deplorable 1
deplorable 1   |     |   Comment #168
@Milty: The MSM has undermined themselves with constant lies and false propaganda. From day one their obvious anti-Trump bias has tainted every single news report and article. From Russian "collusion" to the economy to tax cuts and the stock market. The government shutdown ruining the economy was the latest false narrative. According to them we should have been in a recession for 2 years now. It would be easier if you could tell me one thing the media got right in the past 3 years?
#180 - This comment has been removed for violating our comment policy.
Milty
Milty   |     |   Comment #181
The fact that the NYT and WP are covering the Mueller investigation as well as many other stories is hardly evidence of repeated lying by their reporters. Obviously you're happy with Trump and therefore opposed to contrary news, but that doesn't necessarily make all that news false. BTW, I think the WP's fact checking articles have done a great job.
deplorable 1
deplorable 1   |     |   Comment #183
Sure I'm happy with Trump for the most part. The only things I disagree with him on are the Bashing of Powell/FED and not addressing the debt problem which is really the issue anyway. What's not to be happy about? I'm paying less taxes, earning more interest, stocks are up, the economy is doing great, more people are working with higher pay etc. Yet all I hear from liberals/media is constant complaining and most of it when you get right down to it is political/personality issues rather than policy. I really can't understand how some people claim they don't see the media bias after how Obama was treated like a God for 8 years by the press. I guess if your not looking for it you don't see it.
deplorable 1
deplorable 1   |     |   Comment #169
The economists are starting to crack and hedge their bets on 0 FED rate hikes in 2019 already.
https://www.cnbc.com/2019/02/01/goldman-sachs-bucks-market-and-still-expects-one-fed-rate-hike-in-2019.html
#170 - This comment has been removed for violating our comment policy.
Dan Coates
Dan Coates   |     |   Comment #171
I think we'll get two or more.
#182 - This comment has been removed for violating our comment policy.
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Fed Rate Hike! Interest Rate Predictions and CD Strategies for 2019

The Fed defied pressure and hiked rates today. A rate hike was the consensus, but there had been increasing pressure for the Fed to pause. This is the fourth Fed rate hike of 2018 and the ninth rate hike since the Fed started to raise rates in December 2015. Here’s that all important paragraph in today’s FOMC statement:

This policy action was an unanimous decision.

There are signs in both the FOMC statement and in the FOMC projections that future rate hikes will be fewer and more gradual than this year.

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As expected, no policy changes were announced today at the end of the two-day FOMC meeting. The Fed decided to hold off on a rate hike. The FOMC statement had nothing to suggest any change to their gradual rate hike policy which means that a December rate hike is very likely.

The economic overview in today’s FOMC statement was very similar to the September statement. There were only two changes. The description of the unemployment rate went from “stayed low” to “declined”. The other change was the “growth of business...

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The Fed moved as expected by raising the federal funds rate by 25 basis points. This is the third Fed rate hike of 2018 and the eighth rate hike since the Fed started to raise rates in December 2015. Here’s that all important paragraph in today’s FOMC statement:

This paragraph is shorter than it has been in the past. The Fed removed the sentence about monetary policy remaining accommodative.

The opening paragraph in the FOMC statement that describes the state of the economy is essentially the same as what was...

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As expected, no policy changes were announced today at the end of the two-day FOMC meeting. The Fed decided to hold off on a rate hike, but slight changes in the FOMC statement point to a higher chance of two more rate hikes this year (which will likely come in September and December). For example, the Fed’s description of the economy went from “solid” to “strong”:

June FOMC statement:

Today’s FOMC statement:

Also, the Fed’s description of household spending went from “picked up” to “grown strongly”:

June FOMC statement:

Today’s FOMC statement:

September Fed...

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Second Fed Rate Hike of 2018: Deposit Rate Predictions and Strategies

The Fed moved as expected by raising the federal funds rate by 25 basis points. This is the second Fed rate hike of 2018 and the seventh rate hike since the Fed started to raise rates in December 2015. Here’s that all important paragraph in today’s FOMC statement:

Just like in March, today’s decision was unanimous with all FOMC participants voting in favor of the rate hike.

In addition to announcing the rate hike, the FOMC statement described the state of the economy and the changes since the last...

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