Advertising Disclosure
  1. Home
  2. Community
  3. Miscellaneous
  4. Brokered Non-Callable FIVE Year CDs @ 4.5%

Brokered Non-Callable FIVE Year CDs @ 4.5%

Benson
  |     |   29 posts since 2021

Charles Schwab and TD Ameritrade have the following:

State Bank of India NY 4.5% CD 02/28/2028

  Post a comment
6


sams1985
  |     |   781 posts since 2022
If the upward momentum of the 5 year treasury holds up- we may see close to 5% again soon.
Reply
6
JeffinEasternFL
  |     |   744 posts since 2020
All In CU in Alabama still showing 5.05% 60 mos Jumbo CD with membership possible from all over the USA. Nice short EWP as well!
Reply
4
chaser14
  |     |   61 posts since 2019
Fidelity has that same CD offering as well. Settles on 2-28 and pays interest semi-annually.
Reply
2
Ltssharon
  |     |   472 posts since 2020
Tell me. Is it true that brokered cds from schwab do not compound? So confused.
Reply
1
GH1
  |     |   1,058 posts since 2017
Interest earned on a brokered CD is not compounded, as it is with a bank CD. If you want compound interest from brokered CDs, you must reinvest your earnings in another account.
Reply
1
Infinityy
  |     |   107 posts since 2020
You could always use the interest to buy another brokered CD, or money market fund. Of course, you would receive the interest rate in effect at the time of the interest payment, not today's interest rates.
Reply
1
Ltssharon
  |     |   472 posts since 2020
Thank you both. Last week was a tough learning week for me. I thought I was buying a brokered 6 year secondary market cd with a YTM of about 4.13 percent per year After seeing the confirmation report, It looked to me like I would get WAY less. It turns out that the COUPON rate of 2.3 was closer to what I would get each year for SIX years. The broker managers reviewed the tape, decided nothing was said incorrectly. Anyhow I sold for a six hundred dollar loss, and bought a brokered shorter term Morgan noncallable CD.

At the broker they use the term YTM for both their CDs and their treasuries, but I better get busy and study up. Apparently if I had bought a treasury of 1 year or less, the YTM at least on an auction, is normally closer to the coupon rate. In the past I have only bought less than one year at auctions, and things have worked out in such a way that I didn't learn the lesson . Maybe I will take a course at the nearby community college. I can't BELIEVE I did this.
Reply
2
betaguy
  |     |   181 posts since 2022
Just guessing but, you might be not counting the spread between market price and Par (maturity payment). If it said YTM of 4.13, then that's what it is.
Reply
1
Infinityy
  |     |   107 posts since 2020
betaguy is correct, YTM is the yield you receive if you hold until maturity (assuming the CD is not callable). The gap between market price and par makes up the difference between the coupon payments and YTM yield.
Reply
1
alan1
  |     |   880 posts since 2015
Ltssharon -- If the certificate had a yield to maturity of 4.13%, and a coupon of 2.3%, it would have been purchased at a price less than 100.000 (less than par). There would have been what is known as a "market discount". You would have received coupon payments of 2.3% of the par value each year. At maturity, you would have received the final coupon payment, and you would have also received the par value of the certificate (which would reflect your purchase price plus the "accrued market discount").

You have mentioned elsewhere that you are a Schwab customer. There was nothing about this transaction that would have been different elsewhere - -it's not a Schwab thing.

You may wish to review the entirety of Schwab's "Fixed Income FAQs"; the portions related to bonds are extremely important, since brokered CDs have many of the same features as bonds.

You may wish to pay especial attention to the following questions:

"How are bonds bought and sold?"
"What is the return on my bond?"
"What is a yield?"
"What is the difference between coupon and yield, for fixed income securities?"

https://www.schwab.com/fixed-income/faqs

(When making a fixed income investment with which the investor is unfamiliar, some people find it helpful to make a small purchase the first time.)
Reply
6
John19
  |     |   397 posts since 2022
Always call and get guidance before making an unfamiliar purchase, they will usually be happy to walk you through it. You have to learn it first before you know it.
Reply
2


The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.