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There Are Still Plenty Of 5.4%-And-Up Cds — But For How Much Longer?

Kirkland
  |     |   377 posts since 2014

Great post RichardW. Very interesting. It seems brokered cd’s are right now the place to be in terms of buying cd’s. We have seen a recent rush for short term cash by the big banks, with Wells Fargo leading the way on the 1-year, since early May and Schwab quickly matching and/or raising Wells, each week.

Going back to early May, when Wells Fargo re-entered the mix, here are Wells and Schwab weekly 1 year brokered cd rates, payable at maturity:

Wells Settlement date 5/14: 5.20%, Schwab Settlement date 5/16: 5.20%

Wells Settlement date 5/21: 5.25%, Schwab Settlement date 5/xx: 5.25%

Wells Settlement date 5/29: 5.30%, Schwab Settlement date 5/30: 5.30%

Wells Settlement date 6/04: 5.30%, Schwab Settlement date 6/05: 5.35%

Wells Settlement date 6/11: 5.40%, Schwab Settlement date 6/12: 5.40%

You can see, they have increased the 1-year, 5 basis points each week. This week, Wells posted new rates of 5.40% on Friday, May 31 (SD 6/11) and Schwab posted their new matching rate of 5.40% (SD 6/12) today at 5 pm EST.

At my last check, on the 1-year, at Schwab brokerage, since Friday, Wells has offered an incredible 425,000 qty. and sold 163,000 qty with 262,000 qty still available. I have never seen Wells offer such huge quantity. Schwab just offered 100,000 qty tonight and has already sold 17,000 with 83,000 still available.

At Vanguard, Wells has offered 150,000 qty. and sold 74,000 qty with 76,000 qty still available. Schwab is not yet posted available on Vanguard.

It sure seems the rush is on by Wells and Schwab, to grab the most short term cash before the Fed June 12 SEP comes out. Could we go even higher next week on the 1-year or should you lock it in now? That is for you to decide.

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9


chipcollector
  |     |   111 posts since 2010
With Fed Funds at 5.50% the banks still want to pull in short duration (callable) CD money
and it appears as if Fed Funds aren't moving for the next several months. So, IMO these rates
wlll be around for at least a while longer....or as long as Fed Funds remain at current levels
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2
RichardW
  |     |   821 posts since 2019
The Wells Fargo 1-year @ 5.40% new issue, non-callable brokered CD is also selling briskly at Fidelity. As of 2:00 pm EDT 6/4/2024, 21,100 remain with a posted maturity date of 6/6/2025, and 12,400 remain with a posted maturity date of 6/10/2025. The settlement date for both CDs is listed as 6/11/2024.

At Fidelity the Charles Schwab Bank 1-year @ 5.40% new issue, non-callable brokered CD is selling well also. As of 2:00 pm EDT 6/4/2024, 51,900 remain with a posted maturity date of 6/12/2025. The settlement date is listed as 6/12/2024.
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3
racecar
  |     |   628 posts since 2014
As someone who doesn't really follow the brokered CD marketplace, I'm saddened (but not surprised) to see Bank/CU specials evaporate and decline, even though the Fed keeps postponing any action, with no clear indication of the future. June saw Nasa lower their Special CD rates, and April and May saw most other places lower theirs. Right now, other than apparently the Bank of Iowa special in the Deals area, there isn't anything all that special for terms over 1 year.
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2


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