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Discover Bank Re-Enters The 5-Year, Non-Callable, Brokered CD Arena

RichardW
  |     |   821 posts since 2019

After an absence of a few months, Discover Bank re-enters the 5-year, new issue, non-callable, brokered CD arena. Discover Bank is currently offering the following new issue, non-callable, brokered CDs at Fidelity: 5-yr @ 4.45%, 4-yr @ 4.50%, 3-yr @ 4.60%, 2-yr @ 4.80%, 18-mo @ 4.90%, 1-yr @ 4.95%, and 6-mo @ 4.85%. Even though Bank Five Nine exceeded Discover’s current 5-year rate with a 4.55% offering last week, it’s a positive sign to see Discover Bank back in the game. Will the other credit card banks, Capital One and American Express, join Discover in the 5-year competition as they did in November 2022 when they were offering 5.00%?

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Kirkland
  |     |   377 posts since 2014
Don't do it, don't lend your money long term to these credit card companies charging 20% interest rates, while paying you low rates less than 5%.
Stay shorter on your ladder right now, Banks are paying 5.10% right now, available now, payable monthly for 1 year SD 3/15, and right now, 5.00% available payable monthly for 18 months, SD 3/14
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MY2CENTSWORTH
  |     |   440 posts since 2016
Kirkland, I agree and both Discover and Cap1 lowered their CD rates awhile ago and I posted previously wondering if some of the FI's that had better rates and lowered them would jump back in with equal or better rates than they were previously offering. I'd say that the fact that Discover has now made an appearance in the brokered CD marketplace once again that they will be raising rates again sometime soon.
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Kirkland
  |     |   377 posts since 2014
The dam is starting to crack. Today Morgan Stanley has increased their non-callable brokered CD's to 5-yr @ 4.60%, 4-yr @ 4.65%, 3-yr @ 4.75%, 2-yr @ 5.00%, 18-mo @ 5.10%, and 1-yr. @ 5.10%. All settlement dates of 3/9.
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sams1985
  |     |   781 posts since 2022
All are available on Fidelity.
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RichardW
  |     |   821 posts since 2019
Kirkland, thanks for the update. The same Morgan Stanley Bank and Morgan Stanley Private Bank CDs are also currently available at TD Ameritrade and Vanguard.
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RichardW
  |     |   821 posts since 2019
UBS Bank matches Morgan Stanley Private Bank non-callable, brokered CD rates with 1-yr @ 5.10%, 2-yr @ 5.00%, 3-yr @ 4.75%, and 5-yr @ 4.60% at Vanguard. UBS Bank CDs have monthly coupons.
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Kirkland
  |     |   377 posts since 2014
Charles Schwab Bank non-callable, brokered CD just went to 1-yr @ 5.15%, and 18 mo @ 5.20%, SD's 3/10. The race is on for your money.
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Kirkland
  |     |   377 posts since 2014
Today, Celtic Bank inches higher, non-callable brokered CD 4-yr rate to 4.70%, payable monthly, settlement date 3/17.
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John19
  |     |   397 posts since 2022
Discover 4.6% five year brokered CD on Schwab today.
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Kirkland
  |     |   377 posts since 2014
Yes, Discover raised their rates slightly today on their non-callable brokered CD's to 5-yr @ 4.60%,
4-yr @ 4.70%, 3-yr. @ 4.80%, 2-yr @ 5.05%. Settlement dates 3/15.
Today, Sandy Spring Bank is offering non-callable brokered CD 3-yr @ 4.90%. Settlement date 3/14.
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RichardW
  |     |   821 posts since 2019
As of 11:55 pm 3/6/2023, Fidelity has a very limited selection of 1-year, new issue, non-callable brokered CDs listed. Only 41 different banks are listed : )
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Kirkland
  |     |   377 posts since 2014
Today, Wells Fargo 2-yr. @ 5.25%, monthly payments for Evil, settlement date 3/17. Every day, rates are higher. :)
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sams1985
  |     |   781 posts since 2022
Bank five nine is the new leader with a 4.65% non-callable 60 month on Fidelity.
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Kirkland
  |     |   377 posts since 2014
CIBC Bank USA (IL) is top of the non-callable brokered CD 5-yr @ 4.75%, semi-annual payments, 3000Q, settlement date 3/24
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RichardW
  |     |   821 posts since 2019
Kirkland, thanks for the info regarding the CIBC Bank brokered CD rate. Since not all brokerages offer the same CDs, it would be beneficial to the other readers if you would also post the name of the brokerage where you saw the specific CD offered. I believe TD Ameritrade is the brokerage in this case. Am I correct? (FYI, as of 6:10 pm ET, 3/7/2023, Fidelity and Vanguard were not offering this CD)
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John19
  |     |   397 posts since 2022
It's showing on Schwab.
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Kirkland
  |     |   377 posts since 2014
This morning on TD Ameritrade, Morgan Stanley has increased their longer non-callable brokered CD rates to 5-yr. @ 4.80% and 4-yr. @ 4.85%. Semi annual payments. Settlement dates 3/16.
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sams1985
  |     |   781 posts since 2022
Who's jumping on this or are we waiting? Getting greedy again!
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Listedguru
  |     |   63 posts since 2022
Question regarding buying brokered cd's in a fido IRA (actually an inherited IRA). I see they payment schedule is different depending on the cd (ie the Morgan Stanley one's are semi annual). So I assume the interest would be paid back into my Fido IRA account on said basis (ie semi annual, etc) correct?

The reason I ask is that I am required to take RMD's from this inherited IRA on an annual basis so I need to make sure there are funds available to take the required RMD. I guess I would need to do a little planning so that I have enough funds in the account to take those RMD's - which I take in Dec at the end of the year.
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RichardW
  |     |   821 posts since 2019
The issuing bank defines when it will pay interest on a brokered CD. For brokered CDs with terms of 1-year or less, the interest is typically paid at maturity, sometimes monthly. For brokered CDs with terms beyond one year, the interest is typically paid semiannually, quarterly, or monthly. In a conventional Fidelity brokerage account, the CD interest is then promptly paid into the account’s settlement fund (or core position) which is usually SPAXX or FZFXX. I do not have an IRA brokerage account at Fidelity, but I assume it works the same way as a conventional Fidelity brokerage account.
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John19
  |     |   397 posts since 2022
Can't wait to see the upcoming inflation reports. If they are still hot things could get really interesting.
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Robb
  |     |   324 posts since 2018
CPI due March 14th at 8:30 am…set your alarms!
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RichardW
  |     |   821 posts since 2019
The following new issue, non-callable brokered CDs are currently available at Fidelity and Vanguard: University Bank, 5-year @ 4.85%, and UBS Bank, 3-year @ 5.00%. Both CDs have monthly coupons.
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Stacksofcash
  |     |   1 posts since 2022
Tempted to lock this in as it pays monthly. It would only be for a small amount $10-20k as I have most of money locked already. So, it would not be much of a difference even it goes it 5% again…opinions?
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sams1985
  |     |   781 posts since 2022
I personally think rates are going higher but just be wary that the rug can be pulled under us overnight like what happened in November. Soft CPI and everything literally vanished overnight. I was here for that and everyone panicked.

It's taken 6 months for banks to catch back up...which is why I've realized i can't time the top and have started DCA'ing into 5 year CD's. Picked up the GTE 4.8% 60 month. Will likely lock in another brokered one once it hits 4.9-5% very soon and so on and so on till im done. I'm satisfied with a 5% return. 5% cap rate seems to be the standard investment return these days on real estate so im happy with that. Can;t be too greedy!
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sams1985
  |     |   781 posts since 2022
On Fidelity - Morgan stanley bank vs morgan stanley private bank- are these two different entities for FDIC Coverage purposes?
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alan1
  |     |   880 posts since 2015
You're going to have to do better than to refer to something called "Morgan stanley bank". Are you perhaps referring to "Morgan Stanley Bank, National Association" (sometimes written as "Morgan Stanley Bank, N.A.")? There are numerous banking entities that begin with "Morgan Stanley". I am not aware of any bank whose name, in its entirety, is "Morgan Stanley".

Once you determine the name of the bank, you can check with the FDIC, and obtain its certificate number, at https://banks.data.fdic.gov/bankfind-suite/bankfind

If the certificate numbers of the two banks are the same, they would be one entity for purposes of FDIC insurance.
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sams1985
  |     |   781 posts since 2022
MORGAN STANLEY BK N A: CUSIP: DSN381032, FDIC certificate number 32992

MORGAN STANLEY PRIVATE BK NATL CUSIP: DSN380758 FDIC certificate number 34221

Looks like they have different FDIC cert numbers so different entities indeed.
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RichardW
  |     |   821 posts since 2019
sams1985, Morgan Stanley Bank, National Association has an FDIC certificate number of 32992. Morgan Stanley Private Bank, National Association has an FDIC certificate number of 34221. These two banks are 2 different entities. See: https://banks.data.fdic.gov/bankfind-suite/bankfind

BTW, the FDIC certificate numbers are also listed on the Vanguard website: https://personal.vanguard.com/us/FixedIncomeHome next to the associated bank name of the specific brokered CD.
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sams1985
  |     |   781 posts since 2022
Thanks RichwardW!
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John19
  |     |   397 posts since 2022
5 year treasuries dropped below 4% this morning, I wonder if it will affect brokered CDs right away.
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sams1985
  |     |   781 posts since 2022
It's like November all over again. 5 year treasury tanks and everyone is panic buying up long term brokered CD's. I guess the March CPI will determine which way we go. I may just pick some of the Morgan Stanley 4.8% 60 month myself.
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