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14 Month No Penalty CD @ 4.40% APY - Sallie Mae Bank by Savebetter
January 3, 2023 at
05:30 PM
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Deal Details
Last Edited by jersharocks | Staff January 4, 2023 at 01:10 PM
I've posted this before when the rate was lower, but Savebetter.com increased their no penalty Sallie Mae CD to 4.40%. I cancelled my old one and opened a new one.
Savebetter.com has a No penalty CD @ 4.40% APY. You can break this CD anytime after 30 days. With Fed Reserve increasing rates, CDs in the near future will pay better. So lock in 4.4% for now; if you find a better higher earning CD in the future, break it and lock in. There's no minimum and FDIC insured to $250,000. For the bond heads that prefer treasury bonds, the comparable 1 month fed treasury yield is 4.17%, so this yields higher and offers a guaranteed return for longer if you choose to keep it. I haven't found a better rate out there that doesn't lock in your money for a longer period.
For people that want a higher earning CD they also offer a regular 27 mo CD @ 5% APY.
https://www.savebetter.
Savebetter.com has a No penalty CD @ 4.40% APY. You can break this CD anytime after 30 days. With Fed Reserve increasing rates, CDs in the near future will pay better. So lock in 4.4% for now; if you find a better higher earning CD in the future, break it and lock in. There's no minimum and FDIC insured to $250,000. For the bond heads that prefer treasury bonds, the comparable 1 month fed treasury yield is 4.17%, so this yields higher and offers a guaranteed return for longer if you choose to keep it. I haven't found a better rate out there that doesn't lock in your money for a longer period.
For people that want a higher earning CD they also offer a regular 27 mo CD @ 5% APY.
https://www.savebetter.
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edit: turns out i am preaching to the choir
Can u plz share more details
The only risk with treasuries is that since you can trade them on the secondary market, it's possible that their value can fall in the short term. Note that with a short duration treasury like one year, it would be hard to lose money on it if you held it for at least 2-3 months.
I don't think there is anyone who should choose a lower yielding CD with the same term as a higher yielding treasury. I can see the convenience of HYS luring people away from treasuries in exchange for lower returns, but I don't see why someone should pick this CD.
Our HOA is non-profit, but we are not tax sheltered meaning we pay sales taxes and all of that jazz.
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Our HOA is non-profit, but we are not tax sheltered meaning we pay sales taxes and all of that jazz.
You can also have someone else buy it for you as a gift, which will accrue interest now. However, you can only redeem the amount of your maximum per year, so you can't be gifted $20k for one year, you have to take $10k now (today's max) and then another $10k tomorrow.
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If you think about a CD, it's an agreement where you loan the bank your money and they promise to pay you back with interest. A treasury bond is the same thing. Right now, the treasury bonds will give you a better return on your money. On top of that, because you're lending to the federal government, they're willing to let your income from this be exempt from state and local taxes (but not federal taxes, which will likely be higher anyway).
Unlike a CD, treasury bonds are liquid. If you have a 12 month treasury bond and decide that you want to buy something else after 6 months, then you can sell it on the secondary market. Unless something really crazy has happened with interest rates during those 6 months, you will have a profit for your time holding that bond. With a CD, the only way to get out of the deal is to forfeit all of the interest you would otherwise be entitled to.
CDs typically pay more than treasuries, but not right now. You should avoid short-duration CDs and get short-duration treasury bonds if you need a safe place to park cash.
If you think about a CD, it's an agreement where you loan the bank your money and they promise to pay you back with interest. A treasury bond is the same thing. Right now, the treasury bonds will give you a better return on your money. On top of that, because you're lending to the federal government, they're willing to let your income from this be exempt from state and local taxes (but not federal taxes, which will likely be higher anyway).
Unlike a CD, treasury bonds are liquid. If you have a 12 month treasury bond and decide that you want to buy something else after 6 months, then you can sell it on the secondary market. Unless something really crazy has happened with interest rates during those 6 months, you will have a profit for your time holding that bond. With a CD, the only way to get out of the deal is to forfeit all of the interest you would otherwise be entitled to.
CDs typically pay more than treasuries, but not right now. You should avoid short-duration CDs and get short-duration treasury bonds if you need a safe place to park cash.
Thanks.. makes sense. Watched few videos and that's definitely the better option
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https://fixedincome.fid
If you think about a CD, it's an agreement where you loan the bank your money and they promise to pay you back with interest. A treasury bond is the same thing. Right now, the treasury bonds will give you a better return on your money. On top of that, because you're lending to the federal government, they're willing to let your income from this be exempt from state and local taxes (but not federal taxes, which will likely be higher anyway).
Unlike a CD, treasury bonds are liquid. If you have a 12 month treasury bond and decide that you want to buy something else after 6 months, then you can sell it on the secondary market. Unless something really crazy has happened with interest rates during those 6 months, you will have a profit for your time holding that bond. With a CD, the only way to get out of the deal is to forfeit all of the interest you would otherwise be entitled to.
CDs typically pay more than treasuries, but not right now. You should avoid short-duration CDs and get short-duration treasury bonds if you need a safe place to park cash.
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The Sallie Mae rate may not be accurate today. When you click on it it says the rate is accurate as of the middle of November when rates were higher in general.
Hard to know if interest rates will go up even when the feds raise their rates. They raised it .50 in December and CDs/Treasuries have gone down almost that much since then. In the summer when they raised it .75, cd rates didn't budge. It's all beyond me but clearly savings rate do not always directly correlate to the fed rate.
Short term Treasury bonds are a good deal now but have also bought brokered CDs through brokerage houses like Fidelity which you can also sell on the secondary market and make or lose money the same way you can with the treasury bonds if you don't hold them till maturity.
The minimum for a brokered CD is $1,000 while the best the treasuries I see have a minimum of $5,000 and pay a slightly lower rate than if you buy a larger quantity.