I Have 600K In 5 Yr. Cds At 2.2%. Should I Break Them, And If So, Ladder Or Go With 3.40% 5 Year?

evansears | Apr 24, 2019 | 14 posts since 2017

I've never done this before. $240K comes up in 2 yrs. 3 mos. $280K comes up in 3 years. About $110K in IRA comes up in 3 years.

Despite everything I've read about laddering, I'm not convinced now is the time to try it out. Any advice, greatly appreciated, thanks.

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Answers

jeffb1517 | Apr 26, 2019 | 10 posts since 2019

There is good tool for that here: https://www.depositaccounts.com/tools/break-cd-calculator.aspx . The answer in your case is a clear cut yes.

RickZ | Apr 24, 2019 | 218 posts since 2010

What are the various EWPs? Otherwise, it's impossible to evaluate.

Robb | Apr 26, 2019 | 322 posts since 2018

I ended up breaking two 5 year 2.25% CD's last year to lock into deals at 4% and 4.07%. After running the numbers I came out ahead close to 5k between the two deals. My EWP's were 5 and 6 months respectively on the old deals so it wasn't too bad in terms of the penalties. I'd run the numbers and see how well it comes out in your favor then decide.

Shelby | Apr 25, 2019 | 19 posts since 2018

Break them..only if you purchase a 5 yr CD with the full 600k. Purchasing a 3.40% 5 yr will earn you an additional 30K at least over the next 5 years as well as being able to deduct your loss from breaking the existing CD's. And, if interest rates keep going down you will look like a winner, if you are willing to lock up 600k for 5 years. University Federal Credit Union has a 5 year 3.40% with a 3 month EWP...i would jump on that one. Good luck

evansears | Apr 24, 2019 | 14 posts since 2017

I forgot, they're all 6 mos. EWP, Ally Bank IRA is 5 mos.

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