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time to lock in some CD's?


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6 replies to this topic

#1 scottjm

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Posted 02 September 2005 - 06:42 PM

Katrina will put damper on the economy for several months and the Fed will probably suspend further rate hikes during that period. I have not locked in any CD's for a while but now think maybe it's time. Would not want to go out to long but have seen a few one year term at over 4.5%.

#2 scottjm

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Posted 04 September 2005 - 12:28 PM

So no one has an opinion on this? I guess most here are just looking for those referral and sign up bonuses

#3 jlgrandam

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Posted 07 September 2005 - 04:03 PM

I think it is a good idea. Before Katrina the online savings accounts were rivaling CD rates and I like to keep my cash liquid. But now I think that those savings rates may not stick around as long as I had previously thought. I may be with you in locking in some 1 year CD rates.

#4 pangya88

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Posted 15 October 2005 - 04:22 PM

According to ""Best CD Rates" post, the best 1 year CD rate is 4.6% APY. (The 10% and 7% rates are local deals.) Bankrate.com has 3 banks that offer the 4.6% APY: GMAC Bank, VirtualBank, and M&T Bank NA.

Incidentally M&T Bank NA is a separate division from M&T (brick and mortar) Bank. M&T Bank NA can offer higher CD rates since it has lower overheads. It only employs 7 people. Click on bankrate.com to find their 1800 number. (I got this info from talking with a M&T (brick and mortar) Bank rep.)

BTW, does anyone know of a good website that has rankings on money market FUNDS ???

thanks

#5 markber

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Posted 15 October 2005 - 07:32 PM

QUOTE(pangya88 @ Oct 15 2005, 09:22 AM)

BTW, does anyone know of a good website that has rankings on money market FUNDS ???

View Post




I looked at some rates of MM Funds on iMoneyNet.com. Most of them (if not all of them) offer lower rates than rates of many FDIC-insured MMA accounts that you can find here. I am not a MM Fund expert but I would not try to get a MM Fund account that is not protected by FDIC and offers lower rate than my savings account.

#6 pangya88

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Posted 15 October 2005 - 08:37 PM

Mark,

Thanks for the website on money market funds.

Money Market securities are extremely safe; many are guaranteed or backed by a federal government agency. Money market funds are closely regulated by the SEC. The risk difference versus a bank savings or money market account is zip, zilch, nil.

It used to be that money market FUNDS paid a better yield. According to your observations, it appears that it is not the case now.

Thanks again. ^_~ Panyaster

#7 MacBanker

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Posted 18 December 2005 - 05:45 PM

This question is bugging me for a long time.
To Lock or not to Lock ?

If you folow the US Bond market and the yield curve being flat as it is it is time to consider locking in some of the high yielding CD's. Also some parts of the yield are starting to get inverted - 2 year yields more then 3 or 5 year bonds at the moment.

The market is telling similar story with the different ranges of CD yelds - 1 to 5 year. The difference at most banks between 1 year and 5 year CD's is 10 to 20 basis points.

While these indicators are telling us that it is good idea to lock your money in some of the higher yield CD's looking at the historical graph from bankrate.com for 1 year CD is telling different story. The average yields are going up every week and for sure are not yet toppong out.
So I would wait until we get at least a clear signal that we have so kind of top. And I believe we will have enough time to react since the CD yields are not moving that fast..

But even more important question would be What is the best maturity to "lock in" with these MARKET CONDITIONS and in this ECONOMY ?
I remember kicking my self for not locking in 5 year CD's in 2000 and instead I played "Safe" with 6 month to One year ones.

The difference from the last "recesion" is that we have new Fed President - Bernanke and we have inflation wating to spiral higher.
In case we get to 6 % 2-3 year CD's I think it would be no brainer but at these levels I would still wait a little longer.

If not for something else the internet bankgin became very competitive, and banks are scrambling to lure new costumers with higher and higer rates.





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