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CD's And Interest.

Ally6770
  |     |   4,324 posts since 2010

Are there any banks, credit union or savings or saving and loans or brokerages that have CD's that still only report interest at maturity. And when they mature the interest is posted monthly and compounded? Years ago I was able to get them. But I think they were all at Savings and Loans. The one I used is no longer there. It was in a small city about 10 miles from where we lived at that time.

I haven't used any in years but I will be near the limit for IRMAA

this year and want to put a very large sum into a CD in Sept or Oct that will provide a 1099 at maturity and not each year as it is earned.

I am near the top of an IRMAA income bracket with all the CD interest and in Oct. I will have to put it into one of these CD's if they still have them or put it someplace else to defer interest or will have to put it in a zero interest account.

Laws have changed and may have to call NCUA. I just called a friend to see if he remembers the name of that Savings and Loan

and though many have closed they still may have some.

Use them for mtg loans, our construction loan and CD's they gave great rates for years we could use them.

Maybe some are still around someplace. I have done a google search and have found federal savings banks and called one in my state and it was not the same. Maybe IRS laws and FDIC rules have changed. I know you can no longer pay a year ahead in house payments that they would put on the principal and you could deduct 2 years interest that way and but they added the monthly interest back on the lower balance each month back then. Now people can only pay the one payment extra each year for a total of no more than 13. But this allowed us to deduct on 2 years doubling up also on winter taxes, auto fees, and pay ahead in our state income tax and use the standared deduction the following year.

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MY2CENTSWORTH
  |     |   443 posts since 2016
I don't remember for sure but I think Ally Bank used to offer that when you were opening a certificate, but I just did a search and this is what I found: Are there any banks, credit union or savings or saving and loans or brokerages that have CD's that still only report interest at maturity
You're asking a relevant question about CD interest reporting, particularly if you want to delay paying taxes on interest earned. While the trend is towards annual reporting, you may still be able to find institutions that only report interest at maturity.
Interest Reporting on CDs
Generally, interest earned on CDs is considered taxable income by the IRS and must be reported on your tax return. However, the timing of when you pay taxes on that interest can vary depending on the length of your CD and the financial institution.
Short-term CDs (one year or less): If you purchase a short-term CD that matures within the same calendar year, you'll generally report the interest in that tax year. If the maturity date extends into the next calendar year, you might have to report interest across two tax years, according to Bankrate. Some financial institutions allow interest to be credited at maturity for short-term CDs, which might delay the reporting of interest until the following tax year.
Long-term CDs (more than one year): For CDs with terms longer than one year, you'll typically pay taxes on the interest earned in each year of the CD's term, regardless of whether you receive the interest or not, according to Investopedia. This is because the interest is considered earned as it accrues, even if it's not paid out until maturity.
Finding "interest-at-maturity" CDs
While many institutions now report interest annually, you might still find banks, credit unions, or brokerages offering CDs that pay and report interest only at maturity, particularly for short-term CDs. It's important to:
Review the specific CD terms: Carefully read the CD's disclosure statement or ask the financial institution directly about their interest payment and reporting practices.
Look for short-term CDs: These are more likely to have interest payments and reporting tied to maturity.
Inquire about interest payment intervals: Some institutions may allow you to choose how often you receive interest payments, potentially opting for a single payment at maturity.
Important considerations
Taxes: Remember that even if the interest is only reported at maturity, you're generally still obligated to report it as income for tax purposes in the year it's paid or credited to your account.
Early withdrawal penalties: Most CDs have penalties for withdrawing funds before the maturity date, which can impact your overall earnings.
Tax planning: Consider consulting with a tax professional to understand the specific tax implications of different CD interest payment and reporting methods, and to explore strategies like using tax-advantaged accounts (e.g., IRAs) that may defer taxes on CD interest.
In summary, while annual interest reporting is common, especially for longer-term CDs, you might still be able to find institutions that offer CDs with interest paid and reported at maturity, particularly for short-term options. Always confirm the specific terms with the financial institution before investing.
AI responses may include mistakes. For financial advice, consult a professional.
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Ally6770
  |     |   4,324 posts since 2010
Thank you for the time and consideration for doing this research. I just want to delay income. I do have a large savings account that pays a little over $2.000 a month interest and I can close that and put it in a 0% account when it gets to close to $2,000 below the amount I want to stay below. I won't have to close a CD. I am one that thinks stagflation and even a recession is still a huge possibility and because IRMAA can change for this years income until August 2026, I will stay a well below the 0% inflation amount. I can always put the money back in something if the situation changes after Jan.
I am just glad I stocked up on coffee and a few other things a few weeks ago on sale and used coupons. Coffee went up almost $10 for the large can 2-3 weeks ago and Columbia doesn't even have the high tariff threat. Brazil does though. I called the company and they said it was because of higher production costs. I know the weather has been bad for coffee the last few years and the and few plants in Hawaii cannot produce enough to provide enough for the US. Also I don't like kona coffee. I have a years supply or more now with many things that we could get for 1/2 price or less. At least coffee is not a necessity. Also have a full freezer and a big stock pile except for one thing and that should go on sale in a few more months.
In the mean time I will keep looking for a place with long term CD's that has deferred interest that pays at maturity. I don't want to receive income or have it count as income right now. IRS, FDIC and NCUA rules maybe have changed also from when we could do this in the past.
Paying higher state and federal income taxes and a higher Medicare premium is about a wash for me with a standard deduction. And I am very risk adverse and want to sleep at night and play it safe and don't want to think about it.

There have been too many bankrupcies, store closings, layoffs and low hirings right now and the revised numbers have been worse in many areas that I watch. I started to have the feeling last summer that I get before something bad happens with the economy. Now even US oil production is down because prices are low again because of other countries are producing more and they can't make enough money. This always happens.
Most of our concerns are so much less than others and I am very thankful we can personally help many of them when it comes with some comforts of life but not much anyone can do for the people that have lost members of their families or the ones that have so many injuries.
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betaguy
  |     |   183 posts since 2022
zero coupon treasuries should work.
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Ally6770
  |     |   4,324 posts since 2010
I will check into them. Never did one before.
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choice1
  |     |   374 posts since 2023
Look for FIs that pay bonus/year end dividends which were usually computed on a simple interest basis...similarly, look for those that pay during the year only simple interest
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