Called CD For The First Time

jack12 | Jul 11, 2024 | 307 posts since 2021

I have been buying brokered CDs for awhile.

For the first time ever, I had one called.

5.65% set to mature 10-24. They are calling it early on 7-24.

I guess I will get 9 months at that rate.

Not a large amount but I guess JP Morgan just looks at it as how much they can save by calling it.

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Answers

Vernazza | Jul 12, 2024 | 31 posts since 2022

Thanks for sharing. At least you will get 5.65% for 9 months, callable CD's are not a bad thing. I go for the non-callable CD's because I do not want reinvestment risk. Last November several banks, such as Discover Bank, Wells Fargo, Morgan Stanley and others were offering 5.05%, 5 year, non-callable CD's. I like the security and known sequence of returns with guaranteed rates to help better manage my portfolio with no surprises. If rates go down, I was worried I may not find a suitable replacement.

jack12 | Jul 12, 2024 | 307 posts since 2021

I also have a 5.45% that is callable that matures 6-11-25 that will probably be called early too.

Rickny | Jul 12, 2024 | 1,296 posts since 2017

The call feature is to allow the issuer to save financing costs as they call the bond (or CD) and can issue new bonds at a lower rate. I just had a muni bond called after 3 years. When rates went down, many of my muni bonds paying 5% and above were called when they reached their call date.

Muni bonds in the past would pay out a premium if they were called (usually $1 over par). That is no longer the case

GH1 | Nov 9, 2024 | 1,052 posts since 2017

I had 2 call back this week. They will all be called if 5 and over

jack12 | Nov 30, 2024 | 307 posts since 2021

My JPMORGAN CHASE BK N A CD 5.40000% 04/30/2025 was originally callable on 10-30. They did not call it. The next call date was 11-30. Thats today. And so far they have not called it.
Odd that it was a saturday. But it looks like its always the last day of the month.
-----------
Call Schedule
JPMORGAN CHASE BK N A CD 5.40000% 04/30/2025
Call Defeased
NO
Continuously Callable
NO
Callable After
--
Next Call Date *
12/30/2024
* The Next Call Date is, where applicable, the earlier of either the continuously callable effective date calculated from the current business day, or the next scheduled call date.
Call Date Call Price Call Type
10/30/2024 100.000 Par Call
11/30/2024 100.000 Par Call
12/30/2024 100.000 Par Call
01/30/2025 100.000 Par Call
02/28/2025 100.000 Par Call
03/30/2025 100.000 Par Call
-----------
I guess it's possible it shows up Monday but usually, on the weekend I will see mondays dividends if any sort of semi-post early. They don't show up in my account but I can figure it out by the amount.
And 99% of the time they post at about 12:30am as it "southern company $xxx dividend or whatever".
I can only think of one time where it did not happen early but it did post later in the afternoon.
------
Anyway, on the CD above, it was callable on 10-30 but they did NOT call it. And again callable today. At 5.4%, why not?

They have some kind of alert system that is just garbage. They send me an alert every time I cancel an order and that is often. I could not figure out how to turn it off so I just entered a fake email. There is another alert system within my active trader pro platform but its sort of garbage too. They send me alerts about treasuries a month in advance or something. But one time I did get and see the alert for an early called CD.
I stopped being an active trader long ago but they have not kicked me off the platform and I am glad because figuring things out via their regular website is difficult for me. I guess because I use it so rarely.
I only have 2 callables left. The one mentioned above and another that is callable 12-11. (That matures on 6-11-25)

betaguy | Jul 12, 2024 | 180 posts since 2022

Never understood the point of callable CDs ?

jack12 | Jul 13, 2024 | 307 posts since 2021

Right now the difference between a 1 year callable is 5.10% versus 4.85% non callable.

When i bought mine, the 1 year rate was better than the 9 month or 6 month or 3 month. (That is not the case now, the 3 and 6 month have higher rates)
So even if its called early, it was a better deal than the others available.

Not really difficult. I only buy them in my IRA. I stick with t-bills in my regular account.

If I recall the bank can call every 3 months. From what I can see right now the 3,6 and 9 month are not callable. I don't buy longer than 1 year.

My biggest concern was how or if I would be notified and I got notification both by a message to my active trader platform and by email.
(I have not been an active trader in a long time but thankfully they have not taken away the platform because except for fixed income,their regular site seems harder to use)
---------------
Fidelity would like to inform you of an event that has occurred on one of the securities which you hold in your portfolio.

The below security was affected by a Full redemption:
Security Description : JPMORGAN CHASE BK N A CD 5.65000% 10/23/2024
Event Description : FRED TO BE CALLED
CUSIP : 46656MSE2

w00d00w | Jul 13, 2024 | 360 posts since 2012

in late Feb to early April, I had a few brokered CDs called that had rates in the 5.45-5.55% range. all that's really certain in regard to the duration of callable brokered CDs is how much time remains until the next scheduled call date. to invest in these callable CDs, need to accept some duration uncertainty.

jack12 | Oct 30, 2024 | 307 posts since 2021

I have a small CD that was callable today. I expected it to be called but it was not. Why not?

I know in the past I would get alerts but not always and there is no easy way to tell. I can easily tell when they are callable but not IF they are called until the day of.

Why wasn't this called? Don't get me wrong, I am glad it wasn't but it WAS callable today. Was this a mistake on JP Morgan's part? You know they don't have to pay 5.4% for new funds.

JPMORGAN CHASE BK N A CD
5.40000% 04/30/2025

10/30/2024 100.000 Par Call
11/30/2024 100.000 Par Call
12/30/2024 100.000 Par Call
01/30/2025 100.000 Par Call
02/28/2025 100.000 Par Call
03/30/2025 100.000 Par Call

bobert456 | Jul 14, 2024 | 187 posts since 2022

Seems to be JP MORGAN who has the highest hit rate of calling the CDs. I have had several of them, and MOST all got called. You might as well just buy a 3-6mo CD that is not callable ..... avoid JP MORGAN unless you want a very short term CD from them.

These are a pain .... BUT not really a problem.

hiyield | Jul 12, 2024 | 41 posts since 2017

Do they at Fidelity charge any fees when they close and redeem a brokered callable CD?

txFish1 | Jul 12, 2024 | 476 posts since 2023

Fidelity does not charge any fees when a Broker sold CD is called or redeemed

hiyield | Jul 12, 2024 | 41 posts since 2017

Can I assume the called CD is automatically redeemed for the original principal value and whatever interest is accumulated to the date of the call?
I have a regular 5 years brokered CD with the Fidelity and I am thinking opening callable CDs as long I have extra $1,000 ( the minimum to open a CD) from the CD's paid interest.

txFish1 | Jul 12, 2024 | 476 posts since 2023

When the CD is called it is normally (everyone I have seen) has been paid back at par or original principal value plus whatever accrued interest up to the date of call.

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