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Anyone has a Schwab code for opening a new account? I want to open a brokerage account to take advantage of the higher CD/t-bill rates. Not that I have a lot of $$ but I missed the 7% CD rates when Clinton was president, so I don't want to miss the train again.
The 10- year Treasury peak rate was too terse, Right now the sweet spot is back to less than 12 months at 5.3 ish. I am always willing to take some calculated risk getting a few points higher. Until recently CD seems to a good choice (5.45% July 2024) Treasury is still a better choice due to its easier liquidity. My choices are picking CD, Muni tax free, taxable Muni and Corp short term. I will even look other government bonds if they pay higher. One etf even more enticing is SPYI that pays 12%. But I do not know the long term impact.
Senior retiree , 76 in good health, gearing up for next conservative investment after CD's , MM's, and TB's drop to the 2% rate or less. Is there an investment strategy to start right now? I'm risk averse but I would like to earn 5+% and have about 150K to work with.
**If** this was me I would like to combine two techniques - CD laddering and dollar-cost averaging: My initial goal would be to dollar-cost average the entire $500,000 into the market but I would split it over the course of 5 years (so $100,000 per year or $3,846 every two weeks). From the initial $500k I would place $100k into HYSA then dollar-cost average this for a year into 90% VTI and 10% QQQM. The other 400k I would CD ladder evenly between 3 month, 6 month, and 12 months. The 3-month CD can be renewed 3 times, 6-month renewed once. Once 12 months are up, I would transfer 100k from the CD balances back into HYSA and dollar-cost average that into VTI/QQQM again, then continue CD laddering the rest. Repeat this until all remaining funds are invested into the market. In between this, I would also analyze mortgage rates and determine if I want to change up my plans and decide to go into homeownership if mortgage rates cut back down significantly within these 5 years (i.e., \~3%). I may stop originally around year 3-4 to fund a down payment if I like how the rates look.
401K/IRA investing question. High yield CDs vs Bonds? Questions for the gurus out there. I’ve held to a pretty standard 65/35 stock/bond index fund allocation within my IRAs and 401K brokerage accounts (Roth and Traditional). More recently someone pointed out that CDs from FDIC insured banks were available at >5% yield on maturity dates ranging from 1-5 years. This seems much higher than the bond funds are providing (and what they have made in my accounts over the past several years). A few questions: - As this money is going to be locked up for some time (withdrawal penalty on the IRA/401K), is there any reason I shouldn’t convert the bonds for CDs?is there any difference from a portfolio diversification standpoint I should consider? - given the tax deferred vs tax free differences, is it better to invest in CDs in traditional or Roth? - if I do go down the CD route, and access to funds/liquidity isn’t a concern, is there any reason to ladder? If I think interest rates are going to decrease/stay low (below 5%) for the mid term, should I lock in 5 years? 1 year? Why? Thanks!
Look into CD ladders or tbills. That’s how I funded college. Also apply for scholarships and only go to community college until you can land a job. Then find a company that does tuition reimbursement. I wish I followed this path I would have saved $100k double majoring in engineering and still making more off my 2 year technical degrees(also in engineering).
I would even look at some brokerage CDs and lock in the rate you need until next summer. Most firms have a brokerage CD most will pay better than a high interest savings account. The CD will lock up your strategy so you are less likely to jump on something that could bring down the value of what you need but you will still get some interest along the way.
That matt works out terribly. It also doesn't include taxes, insurance, and maintenance. She really can't afford a big house. She has a downpayments to. Given the state of things she should out the funds in a CD and keep renting. Then use the money to invest in making more money for her career. $50k is hardly enough to live in these days.
$500 means you are broke and not ready to "invest". There is nothing there to invest. $500 is emergency money u need for when an emergency arises such as an unexpected flat tire, an unexpected speeding or seat belt ticket (dont tell me u dont speed or always wewr your seat belt like a good boy perhaps u walk to work or take the train but that is besides the point). The point is: at 17, you haven't elyrt learned about the hundreds of problems and surprise costs associated with day to day that will 100% creep up on you and wipe u out. $500 in savings is a liability, not a comfortable place to have your $ working for you. Put it into a 5% risk free CD or treasury bill (despite inflation eating the gains anyway) so that you can learn long term financial discipline. Keep WAS (Working, Accumulating, Saving) until you get to about $250,000-$500,000. Don't study stocks and options, listen and read books by entrepreneurs who build wealth so that you can understand the equity building side of the market as opposed to the APES, lions, bulls, bears, snakes, and hyenas who will front from you for a fraction of a penny. This is very dangerous stuff not for newbies because 95%+ you will end up getting swallowed whole within days or weeks.
Yeah and there was no fucking way CD Projekt Red stock would not go up at the release of Cyberpunk, until the game released and the stock crashed hard. You are also downplaying Leslie Benzies and Dan Houser getting out of Rockstar games. I really hope GTA6 is a great game, but buying the stock is far from the easy money regards here are trying to make, it can always go very wrong
IMO CD Projekt is way more undervalued. They just proved with their last earnings they turned the ship in the right direction, have The Witcher 4 in the works, Cyberpunk sequel and a new title. Not to mention there’s Cyberpunk Deluxe Edition coming out soon and they have their own game store like Steam that’s been increasingly profitable.
Good for you. Buy the S&P 500, Nasdaq and Russell index fund ETF’s with dividend payouts. Schwab has some good ones. But depending on who you broker with you can find some. Just look to keep the net expense ratio below 0.50. I’d put the majority of your funds in there. The rest in CD’s and high yield MMA for liquidity. Then sit back and watch it grow!
Hi all I'm going to divest from my I-bonds soon. I purchased in May '22 and now is a good time to divest due to the lowering rates on the bonds. I'm wondering what I should do with the funds that are divesting? CDs? Money Market? I see CD rates go down the longer the term, would it be smarter to do a 1-year CD to take advantage of the typically higher rate? Also, are there any tax implications from cashing out my Treasury I-Bond?
Fuck FSA's! They are "use it or lose it" and usually a complete pain in the ass to get reimbursement from. Unless you know you'll have consistent child care expenses I wouldn't both with one. 529's are a good option for saving for college expenses. If you have access to a mega backdoor Roth then I don't think there's a reason to open a regular Roth. You might be eligible if your income is low enough but whatever money you could put into a Roth, you can already do through the Mega backdoor route. Use a high yield savings account or CD for anything you plan to spend in the next 5 years.
You said you are investing your savings. Can you afford to either lose access to your savings or lose money if you buy longer-term bonds and the rates go down? If you can accept that risk, by all means (though a CD may make more sense in that case, or even a no-risk CD from ally bank or something).
Is the amount of stress chasing the big casino win worth it for your life force? I mean honestly this last year on good stocks I've made about 20%. But I'm not throwing a lot of money at anything anymore. I sit comfortably on my small tepid, 5.5% CD and every six months I go yeah I kinda like living and not trading. I think I'll let that shit ride a little bit more. I'm not upset that I didn't throw $1 million at Nvidia or Adobe a year ago but I'm happy that I threw tens of thousands of dollars at it. Honestly I've been doing this for a couple decades and I'm getting really tired of the drudgery of it all. I'd rather walk my dogs ride my motorcycle mountain bike, anything other than the stress involved with this kind of garbage but that's just me now go ahead and down vote me.
What I did about 6 months ago when I was losing sleep over many of my trades going against me is sell half of my trading account positions dollarwise and just took the capital gains loss. I transferred half of that amount to a local credit union offering bank CD's for 12 months at 5.5% interest and opened a teaser rate checking account with 5% interest for 6 months. That helped me clear my head as I knew the dollar amount of interest I was going to earn over the next 6-12 months. Then I narrowed my stock holdings to only my strongest conviction holdings that were trending higher and breaking above recent resistance levels and added the other half of my cash from selling to only those positions. I use the 20, 50, 100, & 200 DMA's on both the 3 month & 2 year & 5 year charts to judge what appears to be support & resistance price levels. I stopped buying stocks that prices were falling below all of the 20, 50, 100, and 200 DMA's as they had no support. And if the new positions I add don't move the way I expected them too, I sell immediately. But once a stock like AT&T had a daily close above that first resistance level which was the 20 DMA and held above that price (support level) than I started adding to that position. When $T broke above it's 50 DMA than 100 & 200 DMA and held, than I added more to that position each time. It's all probabilities, but once a stock gains momentum and consistently breaks & then finds support on a DMA, it usually continues to run until that support level is broken. Momentum is also why a lot of these overpriced stocks continue to move higher on ridiculous valuations. But if you check the 3 month chart, you will see one of the Mag 7 darlings Tesla recently was rejected on it's short term 100 DMA of $246.15. The 100 DMA has been resistance for Tesla since Oct 17, 2023. The next support level is b/w $230-$235 (50 & 20 DMA's). If that doesn't hold than Tesla is likely retesting $223.91. These are all just probabilities. You need to use more than just the DMA's but that is a very good start. Also it's usually good to buy when the Fear & Greed index is in Fear stage and Sell & trim positions when when we are in the Greed stage. Especially if a stock position you own is testing a support or resistance level. But ultimately we are all just gambling trading stocks. Good Luck.
I ate too much booty Now I got booty mouth 🍑👄 Told that bitch if she stanky I’mma be moving out Then I hop out the Bugatti Take a poo poo in the potty Actually I was arrested Because I shit in the lobby 🎤😠 Yo buy my CD son! 💿 🏃♂️
Sure but then you're either getting short term, and not "locking in" much, or your getting brokered CDs which are essentially like bonds. Usually people who want "CDs" and not bonds want the ability to withdraw early if they need, and usually you can't get a long term non-callable CD that allows that.
Some ideas: 1. Short duration investment grade funds that match when you need those funds. 2. Brokered CD's that mature in your time frame to lock in interest rates. You can use callable CDs if you don't mind the call risk. 3. Agency and other govn obligations that mature in the time frame that you need the funds. 4. Box spreads if you want to lock in a yield slightly above current risk-free rate. 5. A short duration or short maturity active bond fund. I personally use the ones from Pimco that have about a 30 to 60 day effective duration.
If you don’t need it liquid you should have done this sooner. The 2 year and above non callable CD supply has been dwindling and rates have been falling for them for 3 straight weeks now. Just how people locked in mortgage rates when they were sub 3, people should have locked in low 5 fixed income rates. If you’re looking at a duration over 3 years look into SPDAs, work the same as CDs but with compound interest instead of simple
They are “Experts” and they are always wrong. As one other person stated, if you want to lock in higher interest rates and you are sure the Fed will lower interest rates in the near future then you should buy treasury bonds rather than CDs. Bond prices have an inverse relationship with interest rates, as rates fall bond prices will rise which will cause your bonds to rise in price. You would then have the option of continuing to receive the interest on the bonds or you could opt to sell the bonds and realize the capital gains on them. Another option would be to buy high dividend paying stocks. One example is [$T](https://www.google.com/finance/quote/T:NYSE?window=MAX) which is paying a yield of 6.8% which beats any bond or CD and would allow you to hold it for as long as you like.
It seems like you may be able to do a combination of all three. You could save a lesser % of earnings and allocate between HYSA as well as tbills, i bonds, CD ladders, etc to build beyond the $100k while also beginning to invest more aggressively. If you want to buy a house you can always sell stock or other investments to fund it and feel happy/comfortable knowing all your vacations, engagement/wedding, emergency funds are essentially funded
Once you buy the CD you will lock in the rate However what this is saying is today if you buy a 12 month CD the rate might be 5.2% Tomorrow , or next week a 12 month CD might only be 4.9% However if you buy a CD at 5.2% you get that rate for the entire time you hold the CD
"time of successful completion" to me means when you have purchased the CD. Such as if you started the process today and the rate was X, but you didn't finalize the purchase of the CD until tomorrow and the rate changed to Y in that timeframe, your rate would be Y, not X.
I'm looking to open a CD, and one bank says the APY on my CD could change from when I choose it to when it matures? I thought the point is that doesn't happen with a CD. I'd love help understanding. From forbrightbank "Rates and APYs are subject to change at any time. Your account will receive the current rate that is in effect at the time of successful completion which may differ from when the application is started."
Eight months is an extremely short timeline to hold equities. You are running the risk that the market declines within that timeframe and when you need your money it may no longer be available in the amount you need. It is recommended that money you will need in the short term be held in less volatile holdings, like a savings account, CD, a money market fund, or short term bonds.
There’s a rule of thumb to put (100 minus your age) percent of your investments in equities and the rest in bonds. At 30, stocks are 70%, at 50 they’re 50%, and at 75 they’re 25%. I’m old and only take the RMD from my IRA, since Social Security and pension prevent any need to pull large sums out of investments for living expenses, and HELOC from the paid-off house could cover emergency expenses. Thus I can minimize the bond portion. The RMDs for next year will come out of a 5 year CD ladder, like the bucket system.
If you want to actually depend on that money, the better way would be a staggered CD ladder and money into index funds. If you don't know what you should be doing in the stock market, the absolute last answer should be listening to my friends about options. Maybe you win big, maybe you don't. However, without knowledge and experience, you're not doing anything but gambling.
What are you talking about? Do you just have it sitting in cash? If it’s invested you’re gaining or losing based on the stocks nothing to do with Schwab. I also like it because I have a “bank” with it as well. Also their CD’s are numerous, and other brokerage firms don’t have as good a selection. And with 5.6% apy it’s a great diversification tool currently.
I am in the minority in that I do NOT see interest rates going down in 2024. Inflation is still too high, the money from the IRA is just now starting to hit the economy, and the decline in bond yields gives the Federal Reserve more room to hike rates vs. reduce them All indicators that are worth looking at point to recession starting in 1st or 2nd quarter of 2024. I don't see it as a severe recession, unless something seriously breaks Now what am I doing? Not selling any securities right now. The things I own I like and will hold. Will there be declines? Very likely As dividend and bond interest comes in, I am taking advantage of high yields on CDs and corporate paper, and making some investments there. Not going beyond the 2 year CD --when those mature I am going to look for bargains in the market This is a cyclical bull inside a long-term, secular bear.
I came across a CD maturation letter dated from 2022. The rate on the CD was 0.75%! Faaaaahhk! That is robbing savers. Rates should not get lower than 3-4%. Should always be a little over inflation. And they should be high enough that they can be lowered meaningfully to combat a recession.
Sure but this is a stock reddit group. I was buying the $XLE stocks and getting clowned on here in 2020-21. Just like I have for the last 2-3 years buying the $GDX. My goal is to outperform the S&P over the short term. My long term investment is in a boring S&P 500 401k index fund. My trading account is a diversification away from the index funds/ Besides, no one diversifies here. Once I or others bring up the idea of buying some short term US Treasuries or Bank CD's yielding 5% or so we get told go all into the $QQQ, $VOO, or whatever. You will underperform the market over the long term. Well, that's not exactly diversification.
OP, for $30k I’ll tell you no every time you want to “invest” in something, and we’ll stick it in a mix of index funds, CD, HYSA instead. Great deal, because I promise you that by the time you’re done, you’ll wish you’d only lost another 30k….
Find a high paying Money Market Fund like SPAXX at Fidelity (paying around 4.99% interest right now) and you will save yourself the trouble of CD laddering. I like Treasuries better than CDs right now with the uncertainty in regional banks (like the ones offering the high interest brokered CDs)
Instead of 5% for a CD which parks your $, perhaps you might want to consider getting an HYSA instead? Capital One is offering 4.3% and Ally is offering 4.25% and other banks offering around that give/take. This way you have access to your funds if you need them (unlike a CD) and still earn interest. Plus with compound interest, it earns and makes more. Many banks will apply dividends/interest every month. Therefore a 4.3% APY may turn out to be about 4.76% if the interest is compounded monthly.
I would rather buy U.S. treasury bonds instead of a CD since you would pay federal income tax for treasuries (no local or state taxes) and treasuries would generally have a better yield than 5% (depends on duration). As for the stocks, you can always do 50% stocks (DCA) and 50% liquid (HYSA, CDs, and/or Bonds).
Where are you getting your rates info from? He said he’s getting 5% on his CDs. thats pretty much all high yield savings accounts right right now. So it’s a wash. Having the money instantly available > locked to a CD suffering a penalty should a unforeseen life event happen that forces you to withdraw it early
A bit of both. I've worked in non-profits my whole life, none of which came with much of a retirement benefit. I don't regret that career decision at all. However, it means this windfall is a once-in-a-lifetime opportunity to create some financial security that I would not otherwise have. That indeed creates a bit of psychological pressure: I really don't want to screw up a major financial decision. The advice about money markets (as opposed to CD's) and dollar-cost averaging over a short-term time horizon (3-6 months) is very helpful, and I really do appreciate everyone's generous advice.
Show me what happens when you stop any medication for a chronic condition What happens to your cholesterol and cardiovascular risk when you stop a statin ? What happens to your CD4 and viral load when you stop antivirals for HIV infection What happens when you stop insulin for diabetes ? Why is obesity treated differently than cardiovascular disease, HIV infection, diabetes?
Good call on the lengths I posted. The nice thing about the Fidelity app is it won’t let you buy a CD unless it’s call protected. So as of now there’s a 5.40% for a year. But you’re right, interest can change fast. https://imgur.com/a/59zKvxq
Do not put 35k in any one stock or even 5 for that matter. I done this back in 2021 and made trades based off threads I read. Today I may be up 200% on 2 or 3 stocks but overall I have lost 56% or 28k. The market is impossible to predict. I personally would get an Ira and max your contribution every year. Put 10 grand in a CD and put the rest in Voo or something similar where the stocks are more winners than losers. You’re young enough to be risky but don’t be foolish. 35k is a lot of money for someone your age. Be wise and make sure you do your DD before investing in stocks.
Brokered CD and treasury rates fluctuate constantly. The highest rate on a non callable CD at Fidelity right now is 5.2%. Treasuries are higher. Other advantage is that treasuries are more liquid if you need to sell them before maturity. Brokered CDs are also tradeable but the spread is larger and liquidity of the market less.
tldr; Your expected return after inflation is basically zero either way, so it doesn't matter. > there is no reason to use Treasury Bills since I already live in an income tax free state. Correct? Not from a tax perspective. > there isn't really a reason for me to get into Treasury bills with the current rate of CDs ~ 5.45%? CD's usually have a fee if you need to sell them off early. T-Bills will have a secondary market that is very liquid. CD's also have FDIC insurance(usually) but that has an upper limit. I'd say it mostly depends on what this cash is for, and the chances of needing it sooner. The difference in rate(s) are minimal, and over a year basically negligible. Even at a 1% difference, for every $100k invested it's $1k, it's not going to materially affect anything.
> Others say some of that money has simply shifted to higher-yielding money markets from traditional bank accounts. They question the idea that the money is waiting on the sidelines and ready to enter the market. This was my impression. I opened a CD at my bank earlier this year and they begged me to also open a money-market account and move most of my savings into it. Said they'd been telling all their customers about them since the rates were so great. Banks have wanted more deposits for months and money markets are an easy way to get them. But if the money came out of a savings account it's not exactly marked for investments.
This is not meaningful. If you have 100k to allocate, and want 5% yield, you should allocate the entire 100k at the ~95 price (ie buy 105 t-bills, not 100). Otherwise, you're just getting 5% on less than your 100k. The yield is calculated with the price taken into account. There's no free 5k in your example, just 5k less you invested in the t-bills than you did in the comparable CD. For example: 1yr CD @ 5% APY): Invest 100k, receive 105k, profit 5k 1yr T-bill 5% APY, buying 100 bills: Invest [95.25k](https://goodcalculators.com/treasury-bills-calculator/), receive 100k, profit 4.75k 1yr T-bill 5% APY, buying 105 bills: Invest 100k, receive 105k, profit 5k
Never invest more than you can afford to lose and never put all in one investment. A mix of stocks, savings bonds and CD's is smart with $2k held as cash for real emergencies. Tesla/Musk will soon spin off Space X, both of which will be good investments to buy and hold long term. High dividend stocks are also worth holding long term. Short term look for 2 types of stocks, one that is on a steady new high and one that is cycliable that you can buy on its low cycle with confidence it will rise during the next year. Sell at its peak, wait for its low cycle and buy it again.
Depends on the premium they're offering you on the callable CD. For example, mortgage backed securities are much like a callable CD. If rates go down, borrowers prepay, principal gets paid down. Well historically an agency backed MBS had a 75bps premium over a treasury. Now it's closer to 150bps. Even if its callable, it might be worth it to get that historically high premium over non-callable alternatives.
If you want to allocate $100k earning 5% into a 1 yr CD, you will not have access to 100k until maturity and will receive interest payments as oer schedule. If you want to allocate $100k into a tbill with 1 yr maturity yielding 5%, fidelity will allocate 95k (or whatever the precise math is) into the tbill and you will be left with $5k which can be reinvested into another asset. At maturity, you will get back the $95k while having the $5k with you all along.
My slightly-older-than-a-boomer mother in law put everything in her IRA into a one year CD that she kept rolling at a credit union. Her RMD came from the accumulated interest and some of the principal. She didn't understand stocks and wanted nothing to do with them. I'm sure there are many retired people like this.
Congrats on having that much saved up at such an early age. Leave it in high yield savings or put it in VOO for 5-10 years minimum. Better yet, lock it in a long term CD so you don’t pull it out. Do not get into trying to buy individual stocks. If you really want to try your luck with that maybe only use $1,000.00.
I prefer CDs that pay monthly and are non-callable - those are hard to find from fidelity but you do find them. If those are not available, I prefer T-bills if I get a comparable yield to the CD as the coupon discount leaves you the interest payment right away at the time of transaction and you can reinvest the balance for another fixed income product so your real yield is slightly higher than the advertised t-bill yield.
Critical Thinking Question: The past 5-6 years, excluding the covid blip, unemployment has been consistently sub 4%, which hasn't happened since the 1960's. It's been slowly trending up since the beginning of the year, so what happens when it inevitably rises above 4% and beyond, closer to its long-term average? Wouldn't that hurt demand? And that, mixed with the higher interest rates, what happens to the investors who can't afford to hold onto their properties, can't borrow money for free, or can now make more sticking their money in a CD? Won't that increase the supply? What happens to the market when supply increases and demand decreases?
AGG and BND right now make sense because of the total return potential. The reason that AGG and BND declined was interest rates started increasing in 2022 after declining for nearly 30 years straight and being near zero for almost 10 years (Bond prices move in the opposite direction of interest rates). With yields near 4-5%, and duration of 6.5, the income and capital apppreciation of AGG and BND will likely be higher than a T-bill. The T-bill rate (assuming 3-month) will fluctuate with the FED Funds rate. When that goes down, your bond value will increase only slightly because of the short duration. Then, when it matures, you'll be reinvesting at a lower interest rate. Floating rate securities are worse because not only do you have reinvestment risk but the price also goes down when the interest rate goes down. A long term CD isn't bad but it depends on what you mean by long term. If the time to maturity is 3-5yrs for the CD, then compared to AGG, your interest rate risk is locked (i.e. the price movement is stable and interest income is fixed). However, AGG will appreciate when interest rates go down while a CD will not. Also, both will provide income during the investment horizon but AGG has a significant allocation to US treasuries (42%). Treasury interest income is only taxed at the federal level whereas CD income is taxed at the federal and state level (Note: both are taxed at ordinary income rates). So, bottom line, if you expect interest rates to decline, AGG and BND both are tax efficient ways to achieve income and capital apppreciation.