Weekly Discussion: 27 November 2023 (lemmy.world)

submitted 9 months ago by andocas@lemmy.world to c/fire@lemmy.ml

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[-] OpticalMoose@discuss.tchncs.de 3 points 9 months ago

Anybody else remember there being 5 year CDs at 5+% years ago? I could have sworn I saw those advertised back in the late 90's - early 00's. I didn't get one because stocks were all the rage.

Nowadays, banks won't offer 5% for more than 18 months or so. It seems like they're expecting interest rates to come back down in the next couple of years.

[-] runawaycorvid@lemmy.world 4 points 9 months ago

Yeah I’ve seen projections for 100-200 basis point rate cuts in the next 12 months. I don’t know if I would expect more than 75 or so but anyway. Rates should go down.

[-] OpticalMoose@discuss.tchncs.de 3 points 9 months ago

I'm thinking something along those lines. It could be another 5-6 months before inflation cools down to where the Fed is happy.

[-] runawaycorvid@lemmy.world 4 points 9 months ago

Agreed. I think they’re going to hold longer than people expect. No point in burning all your ammo to fight a real recession. But I’m just a layperson.

[-] yenahmik@lemmy.world 3 points 9 months ago

I just got one for 23 months at 5.3%.

But yeah, it's definitely weird seeing shorter term CDs with higher rate than long term, since my whole life longer term was higher interest.

[-] sugar_in_your_tea@sh.itjust.works 3 points 9 months ago

Brokerages have them, but they're not call protected. I am seeing 3-year call protected CDs going for 4.6% or so, so I think banks are thinking rates will stay high about that long.

[-] OpticalMoose@discuss.tchncs.de 2 points 9 months ago

Good observation. I'm happy with my money market accts(~5%). But I figure banks have access to a lot more info than we do, so I look at CD rates as an indicator.

As far as actually investing in one, I had a CD back in the 90's and didn't like it. It's just not my thing. I'm a stock guy.

[-] sugar_in_your_tea@sh.itjust.works 4 points 9 months ago

Same. I've only had one CD, and that was a no penalty CD to hold onto some cash for someone.

I pay state income tax, and t-bill rates are almost always better than CD rates (at least recently) after accounting for state tax rates. So I buy t-bills on autoroll in my brokerage (which is my main bank) with most of my cash, and the rest sits in a money market fund.

I haven't seen much point, but rates are currently pretty good and I'd probably get them if I didn't have state income tax.