Looking at short term CD rates and they came up (1.22% APY 18 mos). Are there better alternatives without requiring a substantial non-CD account?


ETA: Modified the title. See my 5 April post below.

This message has been edited. Last edited by: bald1,

I prefer credit unions. Mine pays ~1%+ on checking, and a little more on savings

I also like that it is member owned

quote:

Originally posted by SIGnified:
I prefer credit unions. Mine pays ~1%+ on checking, and a little more on savings

I also like that it is member owned

I do too but all the local credit unions are paying small even with "high yield" savings (0.15%).

Anyone with any suggestions here? Too old to play with stocks and disappointed with meager almost nothing savings returns.

I don’t have any good savings or investment advice. I have 1 foot in and 1 foot out of the markets.

The Dow transports are falling rapidly and that’s never a good sign when we can’t ship or truck shit across the country.

The one thing I’ve done is increase the size of our pantry stocks.

???

Unfortunately, even "completely safe" money in FDIC or NCUA insured accounts is virtually guaranteed to lose money via interest rates being offered failing to keep up with inflation.

You could try looking at www.bankrate.com to see what CD rates are currently being offered at different institutions. A CD ladder may be an option, splitting your amount into CDs at maturities in one year increments to keep it somewhat more liquid and still maybe get slightly better rates.

I think that's about the best you're going to do if you're looking to take anything with any volatility off the table, since even bonds have had some volatility and have been down a bit in the recent past.

*Disclaimer: I'm not affiliated with the website, nor am I in the financial planning industry in any capacity, and this is simply my opinion.

I series saving bonds. 10k yearly limit though.

Check out Citibank for new account bonuses. From $15,000 to $200,000 you can earn between 1.5% and 4% APR. Open the account, leave the money in for about 5 months (read the fine print), and they pay you the bonus.

$300 for $15,000
$700 for $50,000
$1500 for $200,000

I calculated the returns on leaving it in for 6 months, but it doesn't have to stay that long.

Read the fine print; has to be a new Citibank account, etc. Can only do it once every 6 months or so. Not available everywhere.

Stupid that you have to play games, but it's much better than you can do with savings or CDs.

Here's a link:

https://citigold.citi.com/


Depending on how much money you're looking to park and how liquid you need it to be, consider buying a rental property. A small house or duplex will yield much higher returns, even if you pay a professional to manage it for you.

quote:

Originally posted by gpbst3:
I series saving bonds. 10k yearly limit though.

This. They're currently paying 7.12% APR, and that variable rate is almost certain to continue to go up further in the near future, since it's pegged to the inflation rate.

They are the highest-earning 100% safe investment option currently, and will continue to be so for a while longer, with inflation this rampant and interest rates this low. It's going to take a long while for inflation to drop enough and interest rates to rise enough to dethrone the I Bond.

You have to hold them for at least 1 year, and from there must pay a small penalty on the prior 3 months' earnings if cashed out between 1 and 5 years. But that's way, way, WAY better than a CD, a new account bonus, or a "high yield" savings account, provided you can afford to have your money locked down for at least 1 year, and preferably 5 years. (Which you'd be doing on a CD anyway.)

As noted, the downside is the $10k annual limit. (Well, plus the annoyingly outdated/clunky TreasuryDirect website, which is required to purchase them.) But this $10k limit is just per calendar year, so you can buy $10k now, and another $10k in January 2023 for $20k total, then add on $10k more each year.

And if you get a tax refund from the IRS, you can convert up to $5k of a federal tax refund into additional I Bonds, and these refund-generated bonds aren't held to this $10k annual limit. So with a large enough tax refund, you could theoretically invest up to $15k in I Bonds each year, $10k purchase limit + up to $5k federal tax refund.

See https://tipswatch.com/qa-on-i-bonds/ for a good overview on I Bonds.

quote:

Originally posted by honestlou:
Check out Citibank for new account bonuses.

It's apparently all about bonuses as the account itself only garners an APY of 0.01%. And yeah, lots in their fine print.

quote:

Originally posted by gpbst3:
I series saving bonds. 10k yearly limit though.

Now if the annual limit was several orders of magnitude larger....

quote:

Originally posted by bald1:
Now if the annual limit was several orders of magnitude larger....

$10k at 7.12% is the same as $58.5k at the 1.22% of your quoted CD, or $475k at the 0.15% of the "high yield" savings account.

Invest the rest in something else, but at least that $10,000 will be making 7.12%.

Max it out this year. Repeat next year, and the next. Continue until interest rates rise enough and inflation falls enough that it makes sense to cash out your I Bonds and stick them in something else like a better-performing future CD with a higher rate.

I purchase staggered CD bonds out to 3 years. They are insured and can be cashed in if an emergency were to occur. I am very conservative, and not a gambler at my age.

TIPS fund. Very low risk. Much better returns than a CD or money market account. Being inflation indexed, the bonds are not subject to normal fluctuations but can have minimal wiggles up/down. As long as you don't need the $$ on a moment's notice you are good.

I look at as safe for 1+ year horizons. It is 5% of my portfolio currently. In an emergency it is easily redeemed, and worst case bad timing would be minimal losses. I plan on keeping them and harvesting the income.

quote:

Originally posted by GT-40DOC:
CD bonds

You lost me here. What are CD Bonds?

quote:

Originally posted by Fly-Sig:
TIPS fund. Very low risk. Much better returns than a CD or money market account.

I'm a tad gun-shy of getting involved in mutual funds or stock investments at this stage of my life. https://www.thebalance.com/pro...mutual-funds-2466782

quote:

Originally posted by RogueJSK:

quote:

Originally posted by bald1:
Now if the annual limit was several orders of magnitude larger....

$10k at 7.12% is the same as $58.5k at the 1.22% of your quoted CD, or $475k at the 0.15% of the "high yield" savings account.

Invest the rest in something else, but at least that $10,000 will be making 7.12%.

Max it out this year. Repeat next year, and the next. Continue until interest rates rise enough and inflation falls enough that it makes sense to cash out your I Bonds and stick them in something else like a better-performing future CD with a higher rate.

Not sure if your married but the wife can also put 10k into I bonds for a total of 20k

quote:

Originally posted by gpbst3:
Not sure if your married but the wife can also put 10k into I bonds for a total of 20k

Empty nester here.

I think you're trying to say that you're unmarried, but "empty nester" just means you have no remaining kids living in the home because they've all grown up and moved out.

You can be married and be an "empty nester".

quote:

Originally posted by bald1:
[QUOTE]Originally posted by GT-40DOC:
CD bonds

You lost me here. What are CD Bonds?



Sorry, I meant to type just CD, but was also thinking of bonds.......brain fart!!

quote:

Originally posted by RogueJSK:
I think you're trying to say that you're unmarried, but "empty nester" just means you have no remaining kids living in the home because they've all grown up and moved out.

You can be married and be an "empty nester".

Groan... twice in one day I've screwed up here on the forum with terms. You're right. I'm a solo act and the kids have long ago left to be on their own.

My other dumba$$ screwup was to refer to an old Canjar set trigger as two stage.

Think I'll go make myself a drink!

As confirmed by the posts in your thread Bald. No really good options.

I have a couple of thoughts or questions.

do you have a purpose for the $ in a given amount of time?

Are we talking over $10k
over $100k

What is this $ for?

There is certainly a lot of uncertainty these days. So I understand the question.

With interest rates on the rise I would think you could find something that would get you 3%. But I would use something local for an institution.