Home > CD rates are rising

CD rates are rising

June 29th, 2018 at 08:23 pm

As I was doing my end-of-month expense and investment reports (I'm down $10,000 for the month), I noticed that 2 of my laddered CDs are coming due in August and September.

This is part of my cash position, and the idea behind laddering CDs is that each time you renew one of the CDs in your spread of 4 or 5 CDs, all taken out at different times, you can improve your rate of return based on current rates.

I checked to see how much better rates are since I got these 2- and 5-year CDs which are currently earning 1.35% and 1.98% APY, respectively.

I was happy to see Barclay's is offering 2.85% on its 5-yr CD, but I can do even better than that: a 5-year CD with Connexus Credit Union earning 3.25%.

If you don't meet the criteria for becoming a member, based on where you live or where you work, you can just pay $5 to join. SmileSo in late August I'll open up a new CD with Connexus with $10,000 from a maturing Barclays CD, and in September I'll consider opening up another CD with them with $8775 from a maturing State Farm CD.

After so many years of ultra-low bank saving rates, 3.25% actually sounds good.

As it turned out, I worked a nearly normal work week this week, as work was slow. So I left at my usual time after a half day on Wednesday, and yesterday I worked from home for just an hour and a half hour today.

Today is the start of very high temps in the upper 80s and 90s. Sun/Mon is supposed to be the worst, with high humidity.

So far I'm making do in the house with onlyl the ceiling fans running, as I anticipate I'll need the central AC Sunday/Monday and am trying to keep costs down.

The other day I noticed that my Aldi's $20 shelving system (purchased last summer) partially collapsed because I put too much weight on it. I'm thankful none of my plants crashed to the ground.

So that's destined for the landfill but in the meantime, I decided to use one of the old plastic shelves I kept from my mother for my outdoor plants. I mean, plastic won't rust, and the rain won't rot it like wood, and these are much more sturdy than the Aldi's shelves (although this year I bought a different set of shelves...;metal...from Aldi's for the same cheap $20, I think, that I really love, although they were a pain to assemble).

So I unloaded all the paint cans and other stuff on the shelves, which I'd been using in the basement (because the basement tends to be damp, so plastic works well there too), and lugged it to the back patio. It may not be the prettiest thing to look at, but it provides lots of shelf space and kind of acts like a "wall" delineating the outdoor seating space.

I have several pots of parsley on the top shelf, which I don't think chipmunks will climb. They kept periodically marauding the parsley (which I'm growing for black swallowtail butterflies) right on my front stoop. So the plastic shelves (about 5 feet high) will do a much better job of protecting my parsley.

I still have to watch it with the weight, and I decided some of my larger terra cotta pots can't go on it, but that's ok. I would love to buy another set of metal shelves like the other set I got this spring, but it's a seasonal item at Aldi's, I guess, and I haven't seen them there since.

The same shelves are being sold elsewhere for $60, and I don't want to pay that.

After watching a You Tube video, I decided I felt confident enough to pull off leaves and deadhead my Black Prince Echeveria. Once callused over, the leaves can be used to form new pups (plants) and I can replant the top of the plant I deadheaded. Truth be told, I'm not sure any of the leaves will root because they are all kind of yellowish looking; I wasn't watching it and it got a lot of rain recently. We'll see.

I also planted some wandering Jew cuttings I had sitting in water on the kitchen windowsill which I salvaged from a plant I nearly managed to kill. These plants are so easy to grow; I remember them from my teenage years. Not sure what I did wrong, but am trying again with the rooted cuttings.

So that's about how my day's gone; I haven't done anything much or gone anywhere, yet it was kind of enjoyable just the same.

4 Responses to “CD rates are rising”

  1. AnotherReader Says:

    Rates on brokered new issue CD's are even higher. If you have accounts with Fidelity, Schwab, or Vanguard, check the CD offerings. They are almost always carry higher yields than what you can buy at the retail bank branch.

  2. PatientSaver Says:

    Thanks for mentioning that...totally didn't know Vanguard did CD rates. I did check, but their rate on a comparable 5-yr cd is 3.30%, just 0.05% better...although I would save the $5 for joining Connexus.

    So I'll probably go with Vanguard since I already have accounts with them...thanks again!

  3. AnotherReader Says:

    I would also look at shorter term CD's. Fidelity has lots of three year CD's at 3 percent. The yield curve is flat, and you don't earn much more yield by going longer term. With interest rates rising, you might want to ladder some CD's.

    The second suggestion would be to buy short term treasury paper at the Treasury auction. If you buy treasuries in taxable accounts, the interest is not taxable at the state level. Fidelity has a nice web page for doing that, not sure about Vanguard.

    Per Fidelity, the expected annualized yields at Monday's auction are 1.80 for one month, 1.93 for three month, and 2.11 percent for six months. Those bills are good places for short term cash laddering and at least at Fidelity, you can set them to roll over when the term is up.

  4. rob62521 Says:

    I'm pleased CD rates are increasing. About time!

    We did a CD with State Farm bank a few months ago for 30 months and got over 2 percent and were pleased to see that. Right now anything around here is a barely 1%.

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