Adios Long Term Non-Callable Brokered Cds

CDmanFL | Nov 29, 2022 | 286 posts since 2019

There are no 4 or 5 year non-callable CDs at Fidelity right now and the 3 year is only 4.2%. The music has stopped playing and the peak has passed, sadly. Still hoping I’m wrong but it doesn’t look promising. I seriously doubt they are coming back.

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sams1985 | Nov 29, 2022 | 781 posts since 2022

There are still a ton of non-brokered CD’s available well above 4% in the 4-5 year range. And many of those banks have actually increased rates in the last few weeks.

Let’s not give up just yet. These next two weeks will be really important to see if this actually was the peak or if it was just a dip.

Kaight | Nov 29, 2022 | 1,192 posts since 2011

Agreed. Some folks believe the fat lady has sung. In my opinion she is merely out back "powdering her nose" while seriously contemplating her next act.

Kirkland | Nov 29, 2022 | 374 posts since 2014

Patience. On the 5 year CD's we peaked around 3.5% in late June, our 2nd peak was 5% in early November, and I am looking for our 3rd peak next year possibly as high as 5.75%, which I heard is the speculative immediate terminal rate. Not to say we won't go higher than that later. None of the long term brokered CD's are worth buying right now. The curve is hugely inverted. The 12 month treasury auction on Nov 23rd yield was 4.75%. In the near, for short term CD's, we are going higher. Stay liquid in savings earning 3.5% also going higher (to 4% when Fed raises in mid Dec). For now, you can only afford to buy CD's, ladder on the shorter end, buy 1 and 2 and 3 year expecting non-callable 5% + yield for 12/24/36 months to be offered soon.

Blade | Nov 29, 2022 | 49 posts since 2018

Longer term brokerage CD's are indeed getting tougher to find but not impossible quite yet. I check them on Vanguard & Fidelity every morning and again after dinner. Yesterday morning Vanguard had nothing worthwhile in the 3yr range but when I checked again after dinner a new listing showed up and I secured a non-callable at 4.80% paying monthly. It definitely pays to check more than once a day as they do show up but then sell out quickly! Happy Hunting.

Coreyfr | Nov 29, 2022 | 19 posts since 2020

Do the brokerages give you time to fund these? I have some brokerage accounts but my funds are not currently with them. Most is in other savings or money market accounts.

Blade | Nov 30, 2022 | 49 posts since 2018

Unsure on this question since I have the funds already with Vanguard. The brokered CD's usually close a few days later and the cash remains in your MM account until then so maybe they'd allow it? If you're seriously chasing brokered CD's I'd suggest moving your cash into your brokerage MM as most of them are paying fairly decent rates now. Vanguard MM is showing 3.68% as of today. The desirable longer-term brokered CD's are not lasting long from what I'm currently seeing with Vang. & Fido so you'll need the option to move quickly.

MAKNYC | Nov 30, 2022 | 323 posts since 2015

I can speak to Schwab and Fidelity. And this only pertains to new issue CD’s. At Fidelity when you enter a buy order it will be in the pending state until the day or two before settlement funding. For example if you saw a new issue 5 year CD with a maturity date of December 10 2027 that CD won’t settle until December 10, 2022 which is when funds are transferred. Even if you entered the buy order today it won’t be executed until around December 8 (I haven’t adjusted for non business days). In theory if you entered such an order you would be able to cancel it as well until the execution day. On the other hand Schwab executes immediately, which is the ‘trade date’, but it still wouldn’t settle until December 10 (like at Fidelity) which is the day free funds would need to be in your account. Simply put, like with all securities transactions, free funds need to be in the account on settlement day.

And while I don’t think you are asking this, if your account is not a margin account and you don’t have sufficient assets, some firms might be reluctant to take the risk that you will fund a large purchase in time. So such a trade attempt might get rejected at entry as a risk control attempt, but can probably be overridden by dealing with a human.

alan1 | Nov 29, 2022 | 877 posts since 2015

CDmanFL wrote: "There are no 4 or 5 year non-callable CDs at Fidelity right now..."

1. Did you check to determine what is available in the secondary market?
2. fyi -- 4-year and 5-year non-callable cds are available at Vanguard (as of a few minutes ago) with yields to maturity ranging from 4.00% to 4.2%.

CDmanFL wrote: "the 3 year is only 4.2%".

As of a few minutes ago, Vanguard was offering newly issued non-callable CDs maturing in November and December 2025, with yields to maturity ranging from 4.00% to 4.95%.
Also available was a newly issued non-callable CD maturing in August 2025, with a yield to maturity of 4.70%.

I have no idea as to whether yields on marketable CDs have reached "the peak". But I'm certain that "music" has not "stopped playing".

Availability and rates of marketable CDs can fluctuate throughout the day. What's available at one particular brokerage at one particular moment may not be of especial significance.

alan1 | Nov 29, 2022 | 877 posts since 2015

To illustrate the point of my above comment, the 3-year newly issued non-callable CD, with a yield to maturity of 4.95%, is no longer available at Vanguard.

Might it be back later today or tomorrow? Yes, it might. And it might not.

sams1985 | Nov 29, 2022 | 781 posts since 2022

@CDmaninFL, I know emotions are running a bit high right now for many of us on here who missed the 5% long term CD's from early November. I was a proponent of waiting and do have a sense of regret and disappointment that i let them slip by. That being said, it was a good learning experience of how greed can cloud one's thinking.

At the end of the day, the rates will go where they will go. Whether i get an opportunity to lock in at 5% again or have to settle with mid 4's is not going to be life changing. Just take a deep breath and stay calm. Long term CD' rates are not going to plummet anytime soon. There will be ample opportunity to lock in today's deals in the coming months. My sense is we'll all get another shot to lock in at 5%.

John19 | Nov 30, 2022 | 395 posts since 2022

My Discover 5 year 4.9% CDs settle tomorrow. I wished I would've bought more, but there could be many rate hikes to go. I hope we see at least 4.75% direct CDs like Capital One and Ally. Who knows what will happen.

sams1985 | Nov 30, 2022 | 781 posts since 2022

Just out of curiosity , what’s the market value of that security after it settles ?

John19 | Dec 1, 2022 | 395 posts since 2022

Says $149,016.60 Market Value right now.

RichardW | Nov 30, 2022 | 810 posts since 2019

Today I had an opportunity to discuss investments with my broker. We discussed a variety of key topics including: inflation, the stock market, the federal funds rate, and the inverted yield curve. Eventually, I asked my broker what he thought the interest rates of 4-year and 5-year CDs would be after the upcoming FOMC meetings in December and January. Well, my broker is E.F. Wutton, and E.F. Wutton said: ”you need to talk with Nostradamus.” When my broker talks, I listen : )

John19 | Nov 30, 2022 | 395 posts since 2022

Sallie Mae 4.9% 3 year brokered CD on Schwab right now. If anybody sees a 4 or 5 year definitely post it.

CDmanFL | Dec 2, 2022 | 286 posts since 2019

Highest non-callable 5 year at Fidelity right now is 3.9%. Oh lord.

alan1 | Dec 2, 2022 | 877 posts since 2015

CDmanFL -- as I previously asked:

"Did you check to determine what is available in the secondary market?"

And, once again, higher yields are now listed on new issue, non-callable, 5-year CDs at Vanguard.

And, as I previously noted:

"Availability and rates of marketable CDs can fluctuate throughout the day. What's available at one particular brokerage at one particular moment may not be of especial significance."

CDmanFL | Dec 2, 2022 | 286 posts since 2019

Haven’t checked the secondary market as I don’t really have an interest in those CDs. And while you are correct that there is now a higher issue at Vanguard, it’s only 4.15% and it’s with the problematic Celtic Bank (isn’t that the bank that sausaged up the callable versus non-callable choices and no one could figure out what was going on?). A far cry from the offerings a few weeks ago. General trend isn’t looking so hot. You guys can get on my tail about this but the proof is in the pudding and brokered CDs have fallen off a cliff. Turning my attention to non-brokered CDs where the options are much more fruitful.

alan1 | Dec 2, 2022 | 877 posts since 2015

CDmanFL -- You wrote: "And while you are correct that there is now a higher issue at Vanguard, it’s only 4.15% and it’s with the problematic Celtic Bank..."

Please refrain from making inaccurate statements. At the time I posted, and now, Vanguard has new issue, non-callable, 5-year CDs yielding more than 3.90%, from banks other than what you refer to as "the problematic Celtic Bank".

And, Celtic Bank did not "sausage up" anything -- inaccurate listings on brokerage sites were not the fault of Celtic Bank.

I don't have an opinion as to where marketable CD rates are heading. Your view may well be correct. But, please, refrain from posting falsehoods.

CDmanFL | Dec 2, 2022 | 286 posts since 2019

I wasn’t meaning to disparage Celtic Bank. As far as I know, they are an upstanding and fine institution. I simply meant to say that there was a problem deciphering whether their CDs were callable or non-callable. As to whose fault that was, I have no idea. But I think we would all agree that someone sausaged that up. Maybe just a classic case of too many chefs in the CD kitchen or an incompetent data entry person.

sams1985 | Dec 2, 2022 | 781 posts since 2022

Strong jobs report today…treasury yields shooting back up. CDmanFL, I don’t want to tell you what to do but at this point you have nothing to lose by waiting 2 more weeks for the next rate hike.

CDmanFL | Dec 2, 2022 | 286 posts since 2019

Thanks Brother Sam. I agree

alan1 | Dec 2, 2022 | 877 posts since 2015

sams1985 writes: "Strong jobs report today…treasury yields shooting back up"

Ascribing significance to hourly (or minute to minute) changes in treasury yields may be of great importance to bond dealers and institutional traders.

But "treasury yields shooting back up today" is nonsense. As of approximately 3PM Eastern Time, yields of treasuries with terms of 3 years or greater have fallen today. One-year and two-year yields are up a wee bit. Yields of less than one year are generally down.

And the trading day is not yet over.

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