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Short-term high yield CD?
I’m looking for a short-term (~4 month) high yield CD. My current CD with Bank of America will mature in a few days and it had a 5.45% APY… I can renew this CD at 4.80% APY but am wondering if anyone knows of a better one!Thanks!
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pbucelwicz
at 01:13pm on Jan 16, 2008
4.80% is a great rate right now for a short term CD. Just looking around a bit, that’s the highest I found for a 4 month term. I say renew the CD with BofA if you are comfortable with their service and was happy with your first CD with them.
What was the term length for your 5.45% CD?
ccastracane
at 01:16pm on Jan 16, 2008
Thanks for the info.. it was a 4 month CD.
sergik12
at 01:35pm on Jan 16, 2008
Why a 4 month CD? E-Trade has a 6 month CD at 5%. I have not seen any 4 month CDs that are above 4.80%
https://us.etrade.com/e/t/jumppage/viewjumppage?PageName=kingofcashcd&PageName=kingofcash&tb=3725&WT.mc_id=3725.srch=1
ccastracane
at 01:44pm on Jan 16, 2008
The 4 months isn’t set in stone.. but I’m graduating in 4 months and am concerned that I will need the money sooner than 6 months from now. But, it is definitely something to consider. Thanks for the information!
petebow
at 10:16pm on Jan 16, 2008
sorry im no pro here, but is it worth having your money locked up for two extra months at 5% or would it be better to have it in a 4month at 4.8% then renew it for another four? like wouldnt you be better off getting out two months earlier and reinvesting sooner for .2% less? i dont know if that question makes sense.
pbucelwicz
at 11:26pm on Jan 16, 2008
I have no insight on if the rates will continue to lower, but a CD is only better than a High-yield MMA if the rates are going down. ccastracane made a good call locking in the 5.45% for 4 months. The next 4 month term will be for 4.80%. If in another 4 months the rates go down again, ccastracane will be locking in a lower rate again, which the 6 month 5% CD would have been better.
I choose to put my money in a high yield MMA. You get similar interest rates as the highest yield CD’s at the time. A Money Market Account has a variable rate which can range up and down, but you get the freedom of using that money if you need. You can also add funds to it whenever you want. I suggest after the next 4 month term is over. Invest that money into a high yield MMA or Savings account. You will gain top interest rates while debating if you need to use that money or not.
pbucelwicz
at 08:51am on Jan 17, 2008
I just found this 5.25% 4 month CD. It’s an internet only deal and new money, which yours will be. This is another option for you.
http://www.indymacbank.com/Individuals/Banking/page.asp?pSection=pd4MonCDRate&imb=BkR:ldr:4mo
sergik12
at 09:02am on Jan 17, 2008
Good find pbucelwicz. I would be careful with Indymacbank, they are very likely to go out of business. They took huge loses on the sub prime and the stock is trading below 5 dollars at this point. I would not buy a CD from them for more than 100K since the fed only insures you up to 100k loss.
pbucelwicz
at 11:53am on Jan 22, 2008
Did you renew your CD yet? The feds just cut the rates again.
ccastracane
at 11:58am on Jan 22, 2008
Yes I renewed it last week! They only initially renewed it at 4.34%, so I called and asked why I wasn’t getting the rate I saw on the website (4.80%), and they said it was because it wasn’t new money - however, I complained and they gave me the higher rate since I am such a “valued customer”.
pbucelwicz
at 08:37am on Jan 23, 2008
Good Job! Way to lock in the high interest before they cut the rates again.