quote:

Originally posted by NavyGuy:
Yep, it's risk reward. There's no free lunch.

No risk for <$250k with FDIC/NCUA coverage.

And we're currently in an interest rate situation where a little bit of free lunch is totally doable.

So the smart move is to take that old savings account emergency fund that's earning 0.01% interest 2019-style, or some of that cash stuffed in the mattress that's earning 0%, and find you a high yield savings account, I-Bond, and/or CD to plop it into for 4-6% guaranteed risk-free return.

Thanks guys, good thoughts. I have been a member of this credit unit for about a half century. My folks opened me an acct. when I was a child.

Doesn't mean they could not runaground. But I doubt it. Might jump after the holiday.

Call me a chicken but am not doing business with a bank I cannot walk through their door.

And you are right about that ab1bdj.

quote:

Originally posted by V-Tail:

quote:

Originally posted by ZSMICHAEL:

FDIC insured at a stateside bank?

OP was talking about a Credit Union, not a bank.

FDIC does not insure Credit Unions.

The Federal Govt . insures Credit Unions through the NCUA .

quote:

Originally posted by RogueJSK:

quote:

Originally posted by V-Tail:

quote:

Originally posted by ZSMICHAEL:

FDIC insured at a stateside bank?

OP was talking about a Credit Union, not a bank.

FDIC does not insure Credit Unions.

NCUA coverage is the same thing for credit unions as FDIC is for banks: federal-backed deposit protection for your first $250k at that bank/credit union.

So as long as that bank or credit union is covered by FDIC or NCUA, same-same.

Agreed, similar coverage, similar end results, but I was pointing out that FDIC does not cover Credit Unions.

What kind of money are we talking about here?


What would one earn on say $10,000 at 5.25% for 12 months?

quote:

Originally posted by BigSwede:
What kind of money are we talking about here?


What would one earn on say $10,000 at 5.25% for 12 months?

I’m no math whiz but $525.

That would be about right. $50k=$2,600
$100K=$5,250

Ain't to shabby for 9 months.

The advantage is in the HUGE difference between the OP and typical bank savings rates.

Typical: .01% APY on $10k = $1 for 12 months.

OP: 5.25% 9 months fixed on $10k = $525 for 9 months.

Now, $525 in 9 months isn't going to make Elon Musk jealous, but it is a damn sight better than a dollar per year.

Then there is the nasty fact that most managed investments are proud of themselves if they consistently make less than 5.25%...as long as they can say they didn't lose any of your money they'll beat their chests.

So, this is perhaps the silver lining to rising interest rates that are killing other financial sectors. If you've got some money just sitting idle otherwise that is.

*Fixed Eff up.

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

I do not think you are making $5k profit on a $10k investment in 9 months. Could be wrong though

quote:

Originally posted by apprentice:
The advantage is in the HUGE difference between the OP and typical bank savings rates.

Typical: .01% APY on $10k = $1 for 12 months.

OP: 5.25% 9 months fixed on $10k = $5,250 for 9 months.

Now, $5,250 in 9 months isn't going to make Elon Musk jealous, but it is a damn sight better than a dollar per year.

Then there is the nasty fact that most managed investments are proud of themselves if they consistently make less than 5.25%...as long as they can say they didn't lose any of your money they'll beat their chests.

So, this is perhaps the silver lining to rising interest rates that are killing other financial sectors. If you've got some money just sitting idle otherwise that is.

You gotta move some zeros around. $5,250 on a $10k investment is north of 50%.

My local bank is offering CD at
3.65% for six months with a minimum deposit of $500 dollars.

I can either add or withdraw up to 25% of the total of the CD one time with no penalty I was told by the banker I talked to, however I am going to confirm this again.

Sound like a good deal to park some money.

Another local bank has a high yield account however it requires you to maintain $25,000 or you incur a monthly fee of $30.00 dollars. That account pays 4%.

The banker I talked to said people stagger their CDs opening a new one every month to take advantage if the rates rise.

The CD i was looking at was 3.55% on Wednesday and as of today it went up to 3.66%.

I was told the bank management meet once in the middle of the week determine if the rate will go up.

I took my mother to open a CD a few weeks ago. The rate on a 12-month CD was 4.80% APR/4.91% APY, and she was thrilled w/ that.

old rugged cross, what is the name of this CU offering 5.25%, and what are their membership eligibility requirements?

quote:

Originally posted by frayedends:

quote:

Originally posted by BigSwede:
What kind of money are we talking about here?

What would one earn on say $10,000 at 5.25% for 12 months?

I’m no math whiz but $525.

If you're talking Annual Percentage Yield, then that's correct.

quote:

OP: 5.25% 9 months fixed on $10k = $5,250 for 9 months.

apprentice, double check your math.

quote:

Originally posted by old rugged cross:
I am sure some will mention I-bonds but that does not interest me.

Why? Don't like safe investments? If you like risk, try your local bank or S&L at half the rate.

Which reminds me, its time to dump another $10 grand into them. When they fall, I'll take my money out and spend it. None of the bank CDs are risk free. I'll buy into low risk, but not with my meager savings. Once I need to dump more that the I bond limit, we can talk about the introductory rate.

quote:

Originally posted by rburg:
None of the bank CDs are risk free.

I don't follow.

What risk does a CD from a FDIC-insured bank/NCUA-insured credit union have that isn't present with the I-Bonds that you're putting money into instead?

Both are federally-backed, guaranteed return investments. Either way, barring the extremely unlikely event of a complete and total collapse of the United States government's finances, you're going to be covered if something else were to happen.

And while it's not specifically a risk but rather is just part of the terms of the deal, either one involves locking down your money for a period of time during which it's inaccessible.

Yep, dicked up the math by a decimal. Sorry, carry on.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by rburg:
None of the bank CDs are risk free.

What risk does a CD from a FDIC-insured bank/NCUA-insured credit union have that isn't present with the I-Bonds that you're putting money into instead?

There is some risk from a bank CD. You'll get your initial investment back, eventually. Just not right away. And they may not pay you the interest rate they initially advertised.

Whe had a local bank go belly up across the river a while back. Southern Ohio Bank. Everyone with a small account got their principle back, eventally. Some folks it took months or over a year. They didn't get back their inflated interest. The Feds don't pay that.

Keep your eyes open and know what you're doing. with I bonds, you will need to cash the entire thing. The crooked feds require you to cash their entire bond. With the low limits or them you may want to invest on $5000 twice. Its only a problem when you start to need big bucks. In the "olden" days, you could invest $10,000 in one bond. Given inflation it might present a problem. The initial $10,000 bonds we invested in back in the year 2000 will each require to be cashed, and may present a tax problem give 23 years at various rates over that time period.

I'm buying 30 day Brokered CD's from Fidelity for at least 4% sometimes, 4.1%. I can get a two month CD for about 4.2%. Min. amount for these CD's is is $1,000.

Here's a handy link that puts near realtime data of most current interest rates on one readable page. Note that it auto displays by default the max offered at the moment you link there, but the median rates are instantly available by clicking on the bolded text 'Median Rate' which is always lower. I believe it is updated every 15 minutes during EST trading hours. There are no doubt many other such charts online. Rates have taken a small/stalling hit in the last few days but the future is up for grabs.

Linky: https://fixedincome.fidelity.com/ftgw/fi/FILanding

I guess I just can't get excited about locking my money away in a 4.3-4.6% CD for a few tenths of a percent extra interest over the currently available 4.25-4.35% high yield savings accounts where your funds are still freely available whenever needed.

quote:

Originally posted by apprentice:
The advantage is in the HUGE difference between the OP and typical bank savings rates.

OP: 5.25% 9 months fixed on $10k = $525 for 9 months.

Just gotta point something out that everyone keeps missing... 5.25% APR for 9 months is a 3.9375% return ($393.75) over 9 months, not a $525 return.