Should I Get Usalliance 3 Yr Cd

hank
  |     |   105 posts since 2016

My expectations for interest rates has been very low and I have bought some very low interest rate cds in the last year and a half. I have a couple of cds coming due-one today and one a couple of days ago. When the usalliance cd 3 year at 3/25 came out, I thought I should get it. I am thinking of putting the money in nexr week but now with all the expectations of further Fed rate increases and now the inflation report from Friday suggesting the Fed may need to go even higher, I am thinking now I should wait for bigger trates. The Fed is expected to raise rates by at least a half point on Wednesday but I don't know if and when that will translate into ihigher rate cds. So Iam wondering what everyone else thinks of the 3 yr 3.25percent cd and if you all think it's better to wait for higher rates?



Answers
garyh1961
  |     |   493 posts since 2017
Rates are expected to go up next 6 months. Ladder your money up. Some this week. Wait for next rate increase do another. One point of view
Sylvia
  |     |   335 posts since 2012
That CD is now 2.25%. Reader alan1 reported change earlier, https://www.depositaccounts.com/banks/usalliance-financial.html#promo48025
hank
  |     |   105 posts since 2016
wow, I am shocked. That didnt last long
Sylvia
  |     |   335 posts since 2012
Their 2 year deal lasted less than two weeks (3.00%, now 2.50%). It's still early in the rate cycle. There will be plenty of better deals coming shortly, I assure you.
Choice
  |     |   657 posts since 2020
"I can assure you"...bank on it! What was the plan when one bought CDs x years ago that are maturing soon or... what was expected then for now? Is one getting now what they expected then? What went wrong/right then for now? What is/are the lesson(s) learned? What is one going to do differently now? Personally? I'm right where I expected to be...any rate increase for the foreseeable future is a so-called windfall!
sharon907
  |     |   19 posts since 2022
Ignore anyone who glibly "assures" of anything.

A lot of regular commenters, are "Five Handle Freds" still waiting for "Five Handles" - 5% CDs - from 2015 - 2019.

Giving overly confident advice to random strangers is one of the worst things people can do.  The people giving the advice may understand that their opinions are glib and unreliable, but there are naïve people who take such comments, seriously.

Check the price action of 30 year Treasuries on Friday.  Yields initially fell - prices rose -  Friday morning, before yields rose later.  Much of the yield curve has flattened or inverted. 

Plenty of smart people expect limited rate increases.  Nobody knows the answer.
Ally6770
  |     |   3,105 posts since 2010
I also ladder CD's. Now that I am older I don't have them maturing every couple of months and am combining them so I will have fewer to track and it will easier for the children when they inherit them. The mind set I have used is if I have money sitting in a savings account I am losing the interest that it could be earning in a higher rate CD. Ladder CD's. I always purchased the highest rate I could get at the time no matter if it was 2 years or 10 years. Now though I am waiting for another month to purchase a CD. If you purchase a 2 year CD many times the institutions will let you get it for 20 months or for 26 months etc to help you with you plan. Lately purchasing the I- bond for up to $10,000 (the limit for the year) is the best deal for right now. You can cash them out in 1 year if you need the money with only 3 months interest penalty. After 5 years there is no penalty. Even CD have a larger penalty. The I bonds are paying over 9% interest for this 6 month period. Will change the next 6 month period. If purchased before the end of the month they earn interest from the 1st day of the month. No matter when you purchase the I bond during the 6 month period you will earn that over 9 % interest for 6 months and then get the new 6 months interest rate.
deplorable_1
  |     |   409 posts since 2020
Easy answer: Wait higher CD rates are coming very soon plus I think they already dropped that rate to 2.25% so no point in locking at that rate. 4% is just around the corner.
Ally6770
  |     |   3,105 posts since 2010
I am not sure what the rate will be in a month or so. I am and do not ever remember waiting for higher rates. I am now combining CD's as they mature so they will be the maximum for insurance with 2 beneficiaries at the maturity. That is my plan. When not invested you are losing money. When money is in a savings account how much time will it take to make up the money lost not being in a CD? As more money is available to me I invest it and let it compound. I try to get the best rate I can when I have the money for a CD. What ever rate we get in a CD, it will not replace the inflation rate at the moment. Everyone has a plan that is best for their situation.
deplorable_1
  |     |   409 posts since 2020
I'm not losing anything by waiting since I buy short term CD's with a 2%-3.3% cash back credit card. My liquid cash account is already at 1.75%(and rising with FED hikes) and I have several 5-6% capped savings accounts. I'll wait until what I consider to be the peak of this rate hike cycle before locking up long term 5-10 year CD's. This is the not the first time I have done this back before the housing crisis I was able to lock in 5-6% CD's the weekend before rates crashed and quickly went to 0%. They did not all mature though I had a 1 yr. 2 yr. 3yr. 5 yr. and 7 yr. ladder at 5-6% two of the banks went belly up and my 5 and 7 year CD's never matured and I had to get paid back by the FDIC. So I basically had a 3 year ladder not my fault though that banks failed.
SMT1
  |     |   15 posts since 2018
Currently, Treasuries are looking better than CD's, especially if you are in a high state income tax State where you avoid having to pay state income tax with Treasuries vs CD's. Currently, the 5yr Treasury Note is 3.592%. I live in a State with 7% state income tax, so that rate in my State equates to a 3.86% CD yield.
Ratesaver
  |     |   99 posts since 2013
The cd you are discussing I purchased and everything went well. I to am shocked it dried up so quickly... I use the ladder method and am not to worried about half point or so ... I am worried more people are buying cds and selling their stock especially the older people because they made money and now want to secure it...I do think rates are going to be on a upward trend however not as we might think... Maybe up and down and so on...
CuriousDave
  |     |   87 posts since 2018
It’s not so easy to “secure” much of anything right now in this very high inflationary environment. Series I Savings Bonds offer limited protection but for most people the maximum purchase amount is too small to help much. TIPs also offer some inflation protection and have no maximums but are vulnerable to capital loss if interest rates rise. For all other fixed income offerings, including CDs, our principal will be eaten alive unless and until either inflation is brought down to below interest rates, or, less likely, rates on those other investments rise to match or exceed inflation.
MAKNYC
  |     |   98 posts since 2015
You can find several 3 year U.S. Treasuries today in the 3.39% range with better tax treatment, no early call risk and improved early disbursement characteristics. I purchased the May15 2025 maturities, but others available.  As for the interest rate projection issue, I’d prefer to lock in now.  I don’t personally see intermediate/long term rates going much higher.  Look how badly the system is dealing with the rise of short term rates just 75 bps! QE less than 6 months away…..again.
CuriousDave
  |     |   87 posts since 2018
This morning, Bloomberg is showing 2.99% and 3.32% for 12 month and 2 year Treasury Notes, respectively.


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