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Wells Fargo Extends Durations Offered On New Issue, Non Callable Brokered CD's

Kirkland
  |     |   377 posts since 2014

Directly competing with UBS Bank USA rates, durations, and monthly coupons, Wells Fargo raises all rates and extends out durations offered this week. Rates of all new issue, non callable brokered CD's offered today, 10/2, on Schwab brokerage, 100,000 quantity of each, for 18 month, 2 year, 3 year, 4 year, and 5 year, respectively, as follows: 5.55%, 5.40%, 5.15%, 4.90%, and 4.80%. All monthly coupons, all settlement dates of 10/11/23 (Wed). I think 10/9 (Mon) bond market is closed.

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Blade
  |     |   49 posts since 2018
Thanks for this info! They must have raised them all up a bit since I checked earlier this morning. Seeing the same Fargo rates now at Vanguard as well.
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Kirkland
  |     |   377 posts since 2014
At Schwab, WF usually pulls all of them by Thursday am. UBS Bank USA usually are available all weekend. Today, Schwab has sold about 24,000 quantity of the Wells 18 month, 5.55% in about 4 1/2 hours.
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txFish1
  |     |   479 posts since 2023
The exact same WF at Fidelity posted just before noon and they have sold quite a few of the 18 month 5.5% as well.
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Kirkland
  |     |   377 posts since 2014
txFish1, Can I ask you if you have any issues with Fidelity posting your brokered CD interest timely? And same question to Blade, are you having any issues with Vanguard posting your CD interest timely? I am having a problem with Schwab brokerage not posting my CD interest when due. For example, I was due a semi annual payment on a City National Bank brokered CD I purchased end of March 2023. The first coupon due date was 9/30/23 (Saturday) and it should have posted today, first business day after, 10/2/23. Schwab did not post today and therefore I could not send the money out. TD Ameritrade always posted the morning it was due.
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txFish1
  |     |   479 posts since 2023
Kirkland, I have had quite a few Brokered CD's through the years with Fidelity and they have always been there on time the day they were due. I have had both monthly and semi-annual pay and have all posted on time.
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Blade
  |     |   49 posts since 2018
I hold several CD's (various issuers) with Vanguard and one currently with Schwab. The only tardy payment I've had was, ironically enough, Wells Fargo at Vanguard. I called Vanguard and they explained WF hadn't sent the money over yet to distribute. The payout appeared a day or two later. It's only happened once. I've never had any other tardy payment issues other than that one time.
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RichardW
  |     |   821 posts since 2019
Kirkland, did the City National Bank brokered CD which you were referring to have a maturity date of 3/31/2028, a CUSIP of 178180GY5, and a coupon of 5.00%? I don’t believe your delay was due to Schwab, I think it was most likely due to City National Bank. The reason I say that is because I currently have a City National Bank brokered CD (CUSIP 178180GY5) at Fidelity. Earlier today I talked to a Fidelity Fixed Income representative and he indicated that City National Bank was slow in sending the interest payments over to them and that it would be posted to my Fidelity account one day late which is today (10/3/2023). It appears this is a similar saga to the one which Blade described regarding his Wells Fargo brokered CD at Vanguard.
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Kirkland
  |     |   377 posts since 2014
Yes, that is the exact Cusip and I did finally receive it early this afternoon, 10/3, so that delay is on City National Bank, not Schwab. However, Schwab routinely posts my CD interest just minutes before 6 pm EST and routinely claims on the phone, to "just check the next day, they must have not received it yet". I believe if it is intentional, that it is fraudulent what they are doing, they are holding the CD interest, delaying the posting, to prevent the funds from being sent out. The cutoff time is 6 pm EST to instruct Schwab to be able to send out the funds the next day.
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GH1
  |     |   1,058 posts since 2017
I find the main investment is there and interest shows up next day. Always on that schedule
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JPQ
  |     |   14 posts since 2022
Are there any EWP equivalent terms when buying brokered CDs if you need the funds, or you are basically at the mercy of the broker to liquidate at whatever price they can find?
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betaguy
  |     |   181 posts since 2022
you're at the mercy of the market which is brutal on brokered CDs. If you buy a brokered CD, plan on holding till maturity.
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w00d00w
  |     |   360 posts since 2012
it depends what's going on in the secondary market when the brokered CD is sold. i usually hold brokered CDs to maturity, but i have sold some in the past at both a small profit and a small loss (less than what a 3 month EWP would be)
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CuriousDave
  |     |   233 posts since 2018
If inflation continues to decline (today the October rate was revealed and is down to 3.2%), the market can become your friend when interest rates decline. Your CD will then be worth more than what you paid.
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w00d00w
  |     |   360 posts since 2012
5 year treasury yield reached 4.8% today, same as what Wells Fargo has been offering in brokered CD for that term
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CuriousDave
  |     |   233 posts since 2018
The 5 yr Treasury may be a better deal in a non-tax sheltered account for investors who pay state income tax. 5 yr TIPS currently have a real yield of almost 2.6%, so for those who believe that inflation will average more than 2.2% annually over the next 5 years, they are a good alternative, but there will be tax on the annual inflation increments in addition to the earned interest.
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Kirkland
  |     |   377 posts since 2014
At Schwab, Wells Fargo sold out 100,000 quantity of the 18 month, monthly coupon at 5.55%, and just listed (on 10/4 around 3 pm EST) another 25,000 quantity available. In comparison, Wells Fargo only sold 8,000 quantity of the 5 year, monthly coupon at 4.80%. 92,000 quantity available.
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Ltssharon
  |     |   472 posts since 2020
Do you happen to know their early withdrawal penalties for each term?
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Confused1
  |     |   87 posts since 2018
None but you have to sell your CD and may have to take a loss depending on the rates. The brokerage also charges a small fee.You can sell your brokered CD on the secondary market if you need access to the funds before the CD matures, but you'll be subject to the current interest rates and prices. The downside of this is that you do stand to lose some of your money if interest rates have risen since you purchased the brokered CD.
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choice1
  |     |   372 posts since 2023
Lts …if you need to ask this Q one needs to a lot of research before testing the surf!
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Ltssharon
  |     |   472 posts since 2020
Oops, I didn't register that this discussion was about Brokered cds, even though the post indicated so. Thanks.
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Kirkland
  |     |   377 posts since 2014
Today, Wells Fargo offers lower rates (by 5 basis points) on 18 month, 2 year, and 3 year, and offers higher rates (by 10 basis points) on 4 year and 5 year. Rates of all new issue, non callable brokered CD's offered today, 10/16, on Schwab brokerage, for 18 month, 2 year, 3 year, 4 year, and 5 year respectively, as follows: 5.50%, 5.35%, 5.10%, 5.00%, and 4.90%. All monthly coupons, all settlement dates of 10/24/23 (Tues.)
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RichardW
  |     |   821 posts since 2019
Kirkland, thanks for the update. Currently, Fidelity and Vanguard also have those five Wells Fargo new issue, non-callable brokered CDs at the rates you listed. Good to see the 4-year rising to 5.00% and the 5-year rising to 4.90%. Discover is also currently offering 3-year, 4-year and 5-year new issue, non-callable brokered CDs at Fidelity and Vanguard, however their rates are 5 basis points lower than Wells Fargo’s and their coupons are semi-annual.
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Kirkland
  |     |   377 posts since 2014
Today, Wells Fargo raises 5 year to 5.05% monthly! Rates of all new issue, non callable brokered CD's offered today, 10/23, on Schwab brokerage, for 18 month, 2 year, 3 year, 4 year, and 5 year respectively, as follows: 5.50%, 5.40%, 5.15%, 5.05%, and 5.05%. All monthly coupons, all settlement dates of 10/31/23 (Tues.). This beats all (including me) who bought other issuers 5 year, 5%, last November 2022, and again in March 2023!
Also, those other 5%, 5 year that were previously issued, were all semi-annual payments, this is monthly! With these today, you can reinvest your monthly coupons at (current) higher rates than 5.05%!
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Kirkland
  |     |   377 posts since 2014
Today, also on Schwab, the highest 5 year new issue, CALLABLE brokered CD, is 5.80% monthly, issued by United Fidelity Bank (IN), and is callable monthly, beginning 10/27/24. (You are guaranteed 1 year at 5.80% monthly). Quantity now almost sold out.
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arthurtony
  |     |   24 posts since 2016
I bought it this morning. If they don't call it I win. Even if they do, easier than opening another credit union rate.CD with another hard pull and the drama that goes with it. I just wish, like others have said, that any of the mainstream credit unions we already have accounts with would offer a longer term 6%
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Kirkland
  |     |   377 posts since 2014
Jim Bianco thinks, there could be capitulation to come, he is calling for 5.5% yields on the 10 yr, by Jan 1st. Maybe you consider a ladder :)
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Kirkland
  |     |   377 posts since 2014
Today, 10/25, after hours, American Express Bank jumps in the mix with new issue, non callable brokered CD's offered on Schwab brokerage, for 2 year, 3 year, and 5 year respectively, as follows: 5.35%, 5.10%, and 5.00%. All semi-annual payments. Not only are AMEX rates LOWER than Wells, AMEX rates are payable ONLY SEMI-ANNUALLY. 5500 available quantity of each, settlement dates 11/1.
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Kirkland
  |     |   377 posts since 2014
Today, Wells Fargo maintains 5 year at 5.05% monthly. Rates of all new issue, non callable brokered CD's offered today, 11/6, on Schwab brokerage, for 18 month, 2 year, 3 year, 4 year, and 5 year respectively, as follows: 5.40%, 5.30%, 5.10%, 5.05%, and 5.05%. All monthly coupons, all settlement dates of 11/14/23 (Tues.). Wells reduces the offered rates on the 18 month, 2 year, and 3 year by 10, 10, and 5 basis points, respectively.
It will take time for the yield curve to un invert. Eventually, gradually, we could see Wells increase the 5 year offered CD rate higher. The Fed could remove one or both rate cuts for next year from their December SEP. Stay patient. With the Fed likely holding rates the same, there is a risk of reacceleration of inflation. I see no benefit in locking up these lower 18 month, 2 year, or 3 year CD's here, as holding liquid cash in a Vanguard (Money Market) settlement fund, is matching/beating these lowered CD rates.
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Kirkland
  |     |   377 posts since 2014
Today, Wells Fargo shakes upward all their rates, except for 5 year at 5.05% monthly. Rates of all new issue, non callable brokered CD's offered today, 11/13, on Schwab brokerage, for 18 month, 2 year, 3 year, 4 year, and 5 year respectively, as follows: 5.50%, 5.35%, 5.20%, 5.10%, and 5.05%. All monthly coupons, all settlement dates of 11/21/23 (Tues.).
Ignore the noise from UBS and Morgan Stanley, that today predicted that the Fed cuts rates by 275 and 300 basis points next year. You know why these Wall Street firms want you to think that way!
Instead, remember what the Fed tells you, "higher for longer" "higher for longer" "higher for longer".
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RichardW
  |     |   821 posts since 2019
Of the six different terms (1-yr, 18-mo, 2-yr, 3-yr, 4-yr, and 5-yr) of Wells Fargo new issue, non-callable, brokered CDs offered at Fidelity and Vanguard, as of 1:00 pm EST today, the term which is selling the quickest, is the 1-year at 5.50% APR, interest paid at maturity.
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Kirkland
  |     |   377 posts since 2014
I was not aware that Vanguard provided the quantity available? At Schwab, Wells has sold amounts of 35k, 17k, 6k, 5k, 2.5k, and 7k for (1-yr, 18-mo, 2-yr, 3-yr, 4-yr, and 5-yr)
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Kirkland
  |     |   377 posts since 2014
I think the Wells 3 year rate of 5.20% monthly, is the highest non-callable 3 year rate we have seen.
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txFish1
  |     |   479 posts since 2023
Kirkland I know that is the highest rate I have seen on Fidelity for the 3 year non callable CD
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RichardW
  |     |   821 posts since 2019
Kirkland…Vanguard lists the quantity available for each of their new issue, non-callable, brokered CDs. You do not even need to have a Vanguard brokerage account to view the quantity available. Just go the website:
https://personal.vanguard.com/us/FixedIncomeHome
and then click on the posted interest rate for one of the “Brokered CDs” terms, for example “5 years”, and the associated quantity available for each different 5-year brokered CD is listed under the column “Qty” (You can also find the quantity available by other techniques if you do have a Vanguard brokerage account, but I find the technique which I listed here to be easier.)
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Kirkland
  |     |   377 posts since 2014
Thank you RichardW. You are very helpful.
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Rickny
  |     |   1,298 posts since 2017
One thing that I don't like with Brokered CDs is that they don't compound intrest .
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retired2022
  |     |   3 posts since 2023
Does that matter if you compare APY between CDs?
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Benson
  |     |   29 posts since 2021
Charles Schwab 60 mo (non callable) brokered CDs - DOWN to 4.75% from 5.05% yesterday!
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