Finding CD With Mild EWP, Finding Add-On Cds

Zemo999 | Feb 5, 2019 | 103 posts since 2017

I wonder if there's a place on the site where I can see what CDs with 2-5 year maturities have mild Early Withdrawal Penalties. Going to the info on each CD listed would take an inordinate amount of time. I know there's an EWP calculator, but I'm interested in if there's a site tool that will locate low EWP cds.

Similarly, I'm wondering if there's a tool/filter for add-on CDs, since those seem especially attractive at the moment. One can put a minimum in, and basically 'reserve' that rate, waiting to see what happens with the Fed rates at a later time, in order to decide whether the yield is attractive or not.

Thanks in advance for any replies.

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Answers

paoli2 | Feb 6, 2019 | 2,641 posts since 2011

Zemo: I second that request concerning the EWP site! Even when we call the banks especially they may give us incorrect info depending on who answers the phone! I usually have to call the same institution more than once and insist they tell me what form they are getting the EWP info from. IF Ken were ever able to get this added to the info about the banks and credit unions he provides for us, it would be such a great help. I hope he gets to read your request and can get this done. Next to the interest rate, I think knowing what the EWP is for each financial institution is the next most important piece of info we need. Thank you for bringing this request up.

Btw, even if Ken has some posted from earlier years, we can't take these for granted since so many have raised the EWPs just because the rates tweaked up a bit. We need to know what today's EWPs are. Thanks.

Ally6770 | Feb 6, 2019 | 4,294 posts since 2010

Why not ladder your CD's? You will always have one maturing. You can space them every years. every 6 months etc. Do it by what your situation may require.
For new autos, roofs etc I put my emergency money in reward checking accounts. Have been lucky and never had to use them though.

Zemo999 | Feb 6, 2019 | 103 posts since 2017

While I know the common wisdom is to ladder CDs for a long term basis (yes, I also 'get it' that ladders with spaces of 6 months is another way to do this, and I've kind of done that in part), and it daunts me that Ken has said his read is that interest rates have likely peaked for the cycle, so locking in some long term rates now makes sense, I'm both quizzical and leery about committing money at the present rates for too long. As an op-ed piece in the NY Times noted, inflation, if it comes, can come fast and furious. And if most all of my funds are tied up in CDs, at current rates, one can have the 'underwater' effect for very long periods if one has a good bunch of longer term cds. I fear that scenario. So, currently, I don't have anything that goes beyond 18 months, and the maturity dates are *somewhat* laddered, altho not ideally. My point being that if I step into longer term CDs, I'd ideally like them to be either or both 1. Have a mild EWP, so I can buy cd inflation if economic inflation occurs, and 2. Have an 'add-on' CD. With the latter, I can fund it minimally - I just tried to open one that has a $50 minimum. I can keep that in my 'back pocket' - as I said in my original post - if interest rates are on a downward decline, I can fund those cds more fully. If interest rates rise - well, $50 to reserve my options is a cheap price to pay.
I do understand your 'laddering' strategy. I'm just trying to figure out what's best in an environment where Fed rate hikes seem to be very unlikely as of the moment on the one hand, and on the other, we've got a very strong economy, which, if Trump doesn't wreck it, the Fed may go back to hiking rates later this year if inflation starts to tick up.

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