CD rates on the rise

[BuffaloKyle]

My bank just dropped their 1 year cd from 4.35% to 3.50%! Never seen such a big shift at one time. I think possibly a lot of people were buying cd's with the way the stock market is going and the bank had to react pretty drastically.

[Cooper]

@TonyDown, Not sure if you were aware of this but Citibank offers an alternative to saving accounts without adding “new money”. 

After 3 months my 4.35% interest ended and the bank asked me if I wanted to add more “new money” to get the higher rate for 3 more months. I asked if there were other programs available as I didn’t want to add any new money to my savings account. He told me I could earn a 3.85% interest for 3 months on my existing savings account without adding any new money. No penalties for withdrawals. Sounded good to me and I did it. Sure beats those very low rates on regular savings accounts. 

[TonyDown]

@Cooper By adding new money, does the entire balance maintain the 4.35% interest rate?

My 3 months for the special 4.35% rate ends during July so I will be visiting the branch to make any changes.

 

That said, overall CD rates seem to be easing lower.  Sounds like the better CD rates are behind us.

[Cooper]

9 hours ago, TonyDown said:

@Cooper By adding new money, does the entire balance maintain the 4.35% interest rate?

My 3 months for the special 4.35% rate ends during July so I will be visiting the branch to make any changes.

 

That said, overall CD rates seem to be easing lower.  Sounds like the better CD rates are behind us.

@TonyDown,

Yes, if you add $25,000 or more to an existing savings account at Citibank you will earn 4.35% on the entire account for 3 months. Plus, any additional funds added during those 3 months will also received the higher interest. And, no penalty for early withdrawals. With interest rates slowly moving down, I’d check to make sure 4.35% is still the going rate. My 3 months ends in July. 

[TonyDown]

I just checked CD rates at Schwab, Fidelity and Vanguard.  They've all ticked upwards over the last month.

[Frequentflier]

I'm old. What works for me might not be right for others but why I sleep ok at night:

Large % of investment money in Treasuries & Non Callable CDs - 3-5 year maturities, all currently at 4.5% or better. Have a few Treasuries with longer maturity at 5% yield I bought just because they were at 5%+; whoever inherits that will likely be ok with 5% plus Treasuries can be sold (at gain or loss) in secondary market.

For those who believe Fed will lower rates starting this year I think buying treasuries (again which could be sold if needed) and/or CDs is a good short term strategy. Plus 4% yield is going to look good if Fed lowers. My memory is still good about getting garbage yields of 2% or lower.

Balance of $$ in ETFs, mostly S&P 500, technology, consumer staples, high dividend. Some might say "but what if the market turns down and you need that money". I won't need it and its essentially longer terms investment dollars as beneficiaries will inherit it.