Long-Term Non-Callable Brokered Cds Have Disappeared

CDmanFL
  |     |   90 posts since 2019

Been trying to buy some non-callable brokered CDs in the 3, 4 and 5 year range at the rates that were around last week at this time and they are all gone. What happened? Is this the end of the 5 year non-callables at 5%? I picked some up last week and was loving it and then transferred more money to Schwab and noticed they all evaporated into thin air. Is the party over? I hope not!



Answers
w00d00w
  |     |   68 posts since 2012
This from Ken's weekly CD rate summary:

Just like the Treasury yields, the CD yield curve continues to flatten, and in some cases invert as more banks offer their highest rates on short- and mid-term CDs. This may make the CD choice more difficult. If we think rates are reaching their peak, do you lock into a 6% 1-year CD or a 5% 5-year CD? I doubt this will be the exact choice, but it may be something like this.

You can see this flattening CD yield curve in the average online CD yield changes. In October, the average 5-year online CD yield increased 36 bps from 3.27% to 3.63%. The average 1-year online CD yield increased 46 bps from 3.15% to 3.61%. On November 1st, the average online 5-year CD yield exceeded the 1-year average by only 2 bps. I wouldn’t be surprised if this inverts next month.

The brokered CD rate curve is essentially flat beyond one year. with subsequent rate hikes, it could also invert.
sams1985
  |     |   155 posts since 2022
The market value of my 4.3% Cap One brokered CD just went up today...not a good sign.
sams1985
  |     |   155 posts since 2022
There's a discover 4 year brokered non-callable @ 4.85% availability on Fidelity. Not sure what it was a week or two ago? Can someone chime in? I think it was 4.9 or 4.95?
Kirkland
  |     |   73 posts since 2014
if it helps, american express had a 4 year brokered non-callable available two weeks ago at 4.95% but never saw a discover 4 year
John19
  |     |   56 posts since 2022
Discover 4.9% 5 year brokered CD available now.
sams1985
  |     |   155 posts since 2022
Don't see it on Fidelity.
John19
  |     |   56 posts since 2022
On Schwab selling fast.
Robb
  |     |   133 posts since 2018
Discover has both 4/5 year non-callable CD’s at 4.85/4.9%.
sams1985
  |     |   155 posts since 2022
Not available on vanguard or fidelity unfortunately.
gssharp777
  |     |   16 posts since 2022
Yep, and those went fast at Schwab.
RichardW
  |     |   210 posts since 2019
sams1985…to answer your question, Discover Bank offered a 4-year new issue, non-callable brokered CD at 4.95% on 11/4/2022
ocsteve
  |     |   32 posts since 2010
On Fidelity Investments, the non-callable 4 year brokered CDs were at 4.95% on 11/3, 11/4 and 11/9. The highest 4 year CDs are most recently 11/16, at 4.10% with a small volume available.
gssharp777
  |     |   16 posts since 2022
Fear and greed on the DA.com website. You can bet that interest rates will move higher in the near-term...at least a half-point on the FFR in Dec alone. Every time the equities market tries to talk itself into an "easing" narrative, Fed governors privately and publicly remind everyone what's really happening. The tone and direction of the bond market today was significantly more bearish than last week. The 5yr 4.9% CD I purchased a couple of days ago has already seen a .6% drop in estimated market value. That's an indication of higher near-term rates, not lower.
sams1985
  |     |   155 posts since 2022
Hope you’re right , the value of my 5 year 4.3% from early October has risen this week.
GH1
  |     |   659 posts since 2017
I agree rates will move higher again. Fed speak has already said possibility of 7 percent. Do i think will go that high. Probably not but clearly they are telling us its going up. The markets keep fighting the FED. And it will take alot longer to control current inflation. Just ladder your cds. No one will ever get all top or bottom.
Listedguru
  |     |   14 posts since 2022
So Powell is going to be speaking on Nov 30th at 1:30 PM EST @ The Brookings Institution just two days before the feds blackout period. Also on the following day Dec 1st we'll get the feds preferred inflation reading the PCE so that should be interesting.

Also so this little tidbit from Stifel economists saying the FFR may need to go to 8-9%: Pretty good read with some other economists weighing in

https://www.morningstar.com/news/marketwatch/20221118530/did-bullard-undershoot-stifel-economists-say-fed-funds-rate-may-need-to-go-to-8-9
Kirkland
  |     |   73 posts since 2014
I heard some comment today that the immediate terminal rate was moved up to 5.75%. I thought it interesting with the market media saying rates had already peaked, that the new small issuers of 5 year brokered cd's at artificially low rates were not being bought, and neither were the callable ones in 3 months at 5% being bought. The Fed only signaled that slowing rate increases would be appropriate "at some point", so still overweight cash, underweight equities.
CDsuckers
  |     |   55 posts since 2022
Treasury yields are below both brokered and direct CD's. Not a good sign.
However, I just noticed that the stock market's early morning rally has just gone negative.
So, maybe there's hope yet.
CDmanFL
  |     |   90 posts since 2019
I certainly hope that those of us who have been waiting for even higher rates didn’t miss the boat. I’m savoring to see those 5% 5 year CDs again, non-callable of course.
sams1985
  |     |   155 posts since 2022
Unfortunately, "inflation is over" is the dominant narrative right now, despite it being opposite to reality. This weekend i said 5% CD's will return and i still think they will but not feeling as confident. There will be another rate hike in December so let's see. The market value of my 4.3% non-callable 5 year CD on fidelity has also not gained anything this week.
John19
  |     |   56 posts since 2022
I just want to see a 5 year brokered CD listed at this point.
sams1985
  |     |   155 posts since 2022
There’s been plenty of those on fidelity. Multiple daily but they sell out very quickly despite being callable.
Edit - there’s one available right now from Medallion bank. 5% 5 year Callable
GH1
  |     |   659 posts since 2017
Still finding on etrade
gssharp777
  |     |   16 posts since 2022
Don't think for a moment that we've seen the top.
deplorable_1
  |     |   776 posts since 2020
I see KS State Bank just lowered their CD rates today. I believe this is a head fake trying to get people to lock in CD's at under 5%. The FED hasn't even stopped hiking yet so it's hard to believe that 5% 5 year CD's won't be back. Also inflation doesn't just disappear that fast no matter what the core CPI says. If I'm wrong I still have add-on CD's and there's always cc funding and bank bonuses. Banks seem to love this game of chicken.
CDsuckers
  |     |   55 posts since 2022
And, they're not taking any new online applications...
chaser14
  |     |   31 posts since 2019
This morning on Fidelity a 5 year non callable Synchrony Bank CD is 4.00% but directly through Synchrony it’s 4.40%. What gives? Of course I just pulled all my money out of Synchrony last week and moved it to Fidelity specifically to purchase brokered CD’s. Very frustrating and disappointing.
MY2CENTSWORTH
  |     |   104 posts since 2016
CHASER14, The direct certificate from Synchrony that is 4.40% is only for 15 months and drops to 4.30% for 60 months.
chaser14
  |     |   31 posts since 2019
You’re right. Thank you. 4.30% for 36,48 and 60 months. Now I have to figure out what to do with my funds at Fidelity. I was really hoping for a good 4 and 5 years brokered non callable CD.
sams1985
  |     |   155 posts since 2022
Buy FZDXX if you're holding more than 100k. It's earning 3.79% and rising.
chaser14
  |     |   31 posts since 2019
Thanks sams1985. That’s what I did thinking it would be a great place to hold cash on a three jumbo CD’s that matured this fall until rates peak on 4 & 5 year CD’s to complete my ladder. Now I’m worried about availability at Fidelity and rates on those longer term CD’s when direct bank CD’s are paying more than 4%. I still have cash at banks too and chickened out and picked up a 4 year CD at Capital One yesterday for 4.20% where I have a savings account. I also have an account and Synchrony and think I’ll get a 5 year CD this week for 4.30%. I should be happy because the CD’s that just matured had interest rates of 2.50%, 2.60% & 2.79%. I’d love to wait for 5% on long term CD’s but the whole scenario is making me nervous and I’m afraid we just won’t get there.
sams1985
  |     |   155 posts since 2022
Yeah i was a little annoyed that every brokerage got the Discover 5 year non-callable 4.9% last week EXCEPT Fidelity...go figure.
RichardW
  |     |   210 posts since 2019
The Discover non-callable 5-year @ 4.9% CD was available last week at Fidelity on 11/16/2022, but it sold out very quickly. Another DA reader also noticed its availability (see ChrisinFlorida’s 11/16/2022 comment #77 in Ken’s 11/9/2022 CD Rates Summary blog https://www.depositaccounts.com/blog/cd-rates-survey/)
alan1
  |     |   742 posts since 2015
RichardW -- Thank you for pointing this out.
Just because someone doesn't see a particular CD listed at a particular time does not mean that it was unavailable earlier that day, and does not mean it will not be available later that day.

Discover's non-callable 5-year @ 4.9% CD, CUSIP Number 2546732B1, was available this afternoon (Monday, Nov. 21) on the Vanguard platform. It had not been available on that platform when I checked on Monday morning. When I checked in the afternoon, it was listed; at that moment, Quantity = 66. A few minutes later it was still listed, but Quantity = 6. And shortly thereafter, it was no longer listed.
sams1985
  |     |   155 posts since 2022
I do remember seeing a discover 4 year / 4.85% on Fidelity. I checked almost every day last week every 30 minutes and dont recall seeing the 5 year. Can someone who bought it confirm? Maybe it went so fast i missed it.
Kirkland
  |     |   73 posts since 2014
on TD Ameritrade, I bought the discover 5 year/4.9% on 11/17 at 10:12 am. I also saw the discover 4 year/4.85% available at the same time, and again available later that afternoon. I did not look today but the settlement date is 11/30 and I expect since more were reported as offered this afternoon, they will again be available tomorrow, just not all day long.
sams1985
  |     |   155 posts since 2022
Can someone confirm the CUSIP number of the discover 5 year / 4.9% on fidelity last week ? I want to make sure I’m not spreading misinformation here. I called my fidelity private client rep and he was able only able to confirm the 4 year @ 4.85.
CharleyRay
  |     |   6 posts since 2022
Are there fees and or commissions when buying brokered CDs? If it's a 5 year term, when do the fees end?
sams1985
  |     |   155 posts since 2022
No fees or commissions on buying new issue brokered CD's.
gssharp777
  |     |   16 posts since 2022
No fees or commissions of any type when buying new issues, at least with the brokerages that I use.
sams1985
  |     |   155 posts since 2022
American Express non-callable 3 year @ 4.9% available on Fidelity as of now.
Choice
  |     |   828 posts since 2020
FIs think rates are going down and see no need for non-callable brokered CDs
John19
  |     |   56 posts since 2022
Might be a good idea to buy some now, then wait until the December rate hike/inflation report to buy more. What if inflation ticks back up? Still probably 100 points of rate hikes ahead.
sams1985
  |     |   155 posts since 2022
Logic and precedent would dictate that's how things will go but i have no faith in the Fed anymore. Inflation could meet exceptions next month and the market will roar and the fed will release dovish statements despite the actual figure being egregiously high.
Listedguru
  |     |   14 posts since 2022
The market seems to be saying the FFR peak is around 5% or so. So pretty much around 100 more bp's of hiking from here. We know we're going to get 50bps in Dec and then it seems the market is thinking (2) more .25 bps hikes Q1 of 2023. I did see that Goldman added another 25bps hike to it's projection in May of 2023 for a peak of around 5.25%.

I've been hoping we would see lots of choices at the 5% mark for 5 years (or more) and hopefully we'll still get there. Basically we should see 100 more bps of hiking if things things stay of track. But if the PCE number comes in soft on Dec 1st followed by a soft Nov CPI (in mid Dec) on both headline and core then maybe the fed does pauses after they do 50bps in Dec? I really hope not but I guess we'll see.

I kept telling myself 4.5% was my number but then things kept going and I really want that 5% and maybe we'll still see it but I really don't think we'll see something much higher - possibly at some obscure fi but probably not at the main stream banks. But hopefully I'm wrong and cd rates go higher but I too am losing some hope.
John19
  |     |   56 posts since 2022
Inversion could be a big factor too. We could see 6% 3 year CDs and 5% 5 year CDs at the same time. Look at Alliant, Marcus and Treasury rates right now. I think 2 and 3 year CDs might get the rest of the hikes. Could happen.
CDsuckers
  |     |   55 posts since 2022
There is no hope...
CDmanFL
  |     |   90 posts since 2019
I’m thinking it’s the end of the 5% for anything longer than 3 years. I really hope I’m wrong but that’s my guess.
Robb
  |     |   133 posts since 2018
CDmanFL. Just today Schwab was offering Discover 4/5 year non callable CD’s at 4.85% and 4.90% respectively but they did go quickly. Pretty close!
sams1985
  |     |   155 posts since 2022
The only take away from this self reflection i have done- do not be greedy, you almost always get burned by being greedy. I should have just maxed out at 5% when i had the chance. Nobody can predict the direction of long term cd rates at this point-it's all speculation. There are thoughtful arguments for both directions.
John19
  |     |   56 posts since 2022
I predict highs of 6.25-6.5% 2 and 3 year CDs and 5.5% 5 year CDs, if I had to guess.
sams1985
  |     |   155 posts since 2022
We should be seeing those rates now, they are already pitifully low if you compare the the historical CD chart to the last time the fed funds rate was this high back in 2008 and earlier. Banks just don't need the cash. Even now, the top brokered CD' players have all been credit card companies.
Robb
  |     |   133 posts since 2018
sams1985…yes credit card debt has surged this year…caught this yesterday on cnbc which helps to explain why the likes of Discover, Capital One, American Express and others have been so active in recent weeks near the 5% mark:

https://www.cnbc.com/2022/11/15/household-debt-soars-at-fastest-pace-in-15-years-as-credit-card-use-...
sams1985
  |     |   155 posts since 2022
Credit card debt increased 15%, highest in 20 years. People spending but charging it. Not good. But could be good for higher CD's. Amex and discover were quite active today.
deplorable_1
  |     |   776 posts since 2020
Then there are people like me thrown in there too. I have $200,000+ in credit card debt.............borrowed at 0% APY. ; )
ocsteve
  |     |   32 posts since 2010
I am holding  out for some 5% 5 year non-callable brokered cds.  I would think that they will be mainly credit card banks.
sams1985
  |     |   155 posts since 2022
I dont think those are coming back, brokered CD rates are dropping quickly.
CDmanFL
  |     |   90 posts since 2019
That’s my feeling too, sadly. I bought some 5% 5 year CDs and was about to buy substantially more. The paradigm has shifted. Adios 5%. And I don’t see any decent add-ons other than MACU and the $100K cap is almost not worth the effort. At this point, I’d be delighted with a 3.5% or 4% add-on with no maximum limitation but I fear these products are a dying breed.
John19
  |     |   56 posts since 2022
I still think rates have the potential to be much higher, even 5 year CDs. Still 8% inflation. I wouldn't lock everything at 5% just yet, direct CDs have risen to almost 5%. I can easily picture a 5.25% Sallie Mae or Bread Financial 5 year. But maybe inversion will ruin that. Stressful because no one has seen 5% in 15 years.
CDsuckers
  |     |   55 posts since 2022
Since the TIPS are selling for way over par for 3 and 4 year terms, I bought a non-callable 3 year CD today at 4.90% at a non-credit card bank to pay for my 2025 RMD.  Now, I'm waiting for a decent rate on a 4 year CD for my 2026 RMD.

So, maybe the FED's jawboning is finally having some effect. 
GH1
  |     |   659 posts since 2017
JP Morgan 2 year callable CD now ar 4.9 Percent


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