Have You Opened A CD For Longer Than 5 Years?

racecar | Jan 6, 2025 | 616 posts since 2014

I'm just curious about how many of you have ever opened a CD with a term longer than 5 years (7yr CD, 10yr CD, etc)

For those who did, did it wind up being a good move in the end?

I did so only once, for a 7-year IRA CD, since I wasn't near retirement and it was at 3%, which was high for the time. Near the end of the tern rates had risen, but for the bulk of the term the rate was still a good rate, so it was worth it.

What about you?

(and I wonder, has anyone ever opened up a 10 year CD?)

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Answers

mffarrell | Jan 6, 2025 | 95 posts since 2018

I opened multiple 10 year CDs @5% interest when Pentagon Federal Credit Union had a special offer after the financial crisis in 2008.

It ended being the right decision in the 10 years that I held them. The interest rates never got close to 5% during those 10 years.

racecar | Jan 8, 2025 | 616 posts since 2014

Other than that one 7yr IRA I did, I used to stick almost exclusively to 5 year CDs. But over the last couple years that changed to shorter ones to follow the rates (and also for personal reasons). Part of me wants to put just the min ($100, $500?) in a 10yr CD just for fun to see how it does, but at this point in my life when I'm not sure when funds will be needed, I can't go all-in for a long term one. I noticed a couple places still offering such long-term ones (not gimmicks like that one "100-year CD" place for your heirs a while back) and more than anything was simply curious if anyone ever did 10 year CDs. Glad to hear yours at PenFed worked out when they did. PenFed's CDs are now a garbage dump, with rates in the gutter and draconian EWP, but there was once a time when they were good for CDs.

gregk | Jan 9, 2025 | 72 posts since 2013

How in the world I missed that when it was offered in those days still miffs me whenever I think back about it.

As it was, I established two 100K 7 year CD's with PenFed during the ZIRP period at 2.75% APY, but surprisingly never regretted it in hindsight, as it was the best I could have done for my purposes at the time.

Fast forward, and if I possibly could have chosen a 7 year term for last year's Advancial 5.4% 5 year offer, I would have done so (also with other CU's 5% CD's I deposited funds into), - but they all refused.

yumiko500 | Jan 10, 2025 | 2 posts since 2023

I wish I had known about that deal. I always chased good CD rates but somehow missed that one.Perhaps it was only offered for a short time . Good on you, You caught a nice one !

w00d00w | Jan 8, 2025 | 360 posts since 2012

in the past year or so, i've purchased small amounts of callable brokered CDs at below par prices with maturities in the 5-15 year range in a tax deferred account. certainly possible that most of these get called prior to maturity. if so, then i'll get a higher than to maturity yield, but with a shorter duration.

yumiko500 | Jan 10, 2025 | 2 posts since 2023

I have opened a 10 yr CD once in my life because of the 2008 crisis. It was 3% , at a time when I could not find anything higher.All 5 yr cd's were half that rate. CD rates remained low until the pandemic. All in all, it was worth it . It was above average for the first 7 years and was good. It was under performing for the last 3 years, but on balance, a good overall deal .I received monthly interest which I rolled into better instruments as soon as they appeared, most notably, the I bond spike a couple of years ago (that was a windfall) Short term annuities probably would have paid out a few thousand more over ten years. Oh well, at least my funds were safe. Hindsight is always 20/20, they say. Probably wont do that again, but it was not a bad experience in any way.

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