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So I started to ladder T-Bills for the reasons everyone is stating in this thread. The rate is so volatile (in a good way) that locking into anything even 12 months is too long for me and rates continue to climb. I use fidelity and my suggestion is this.
When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.
I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k
Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.
I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD
just my 2cents
You can buy treasuries from just about any brokerage. I use Fidelity, as I like their platform and they don't charge fees/commissions for treasuries. Fidelity Fixed Income Page[fidelity.com]
Follow the above link and scroll down to the row "U.S. Treasury." Choose the duration you want and click on it. You can then click "buy" to start a trade of a specific treasury bill/bond. Fidelity's Intro to Treasuries[fidelity.com]
This is true, but it doesn't make an 11-month CD at 5% a bad idea. Those HYS can change their rates at any time, but here you're guaranteed to get 5%.
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Please see my response above.. just pasting here again... I've never bought a CD before, so i was looking up on YouTube for some additional info, and can't across this video. This is where i learned about the non certificate deposit. https://youtu.be/lOs91b92q4M The guy tweeted Capital One and didn't get a straight forward answer saying yes that the CD is FDIC insured. This has put me on fence to buy the CD.
Every Capital One 360 CD balance is insured up to the FDIC's allowable limits.
Ditto...from the FAQs on the 360 CD page.
Are online CDs safe and FDIC insured?
Capital One 360 CD accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to allowable limits.
Can't believe there is a YouTube video on it. "Non-certificate" is not a common banking term (I work in finance and investments) and likely they may have intended to say that these certificates are "non-negotiable".
Brokered CDs sometimes are not insured. CDERS, Yankees, Bears and Bulls are CDs that typically are not insured. If a bank sells you a CD, they must disclose that it is subject to risk. It's the law!
These are the typical statements that they must make.:
"This product is not a deposit or other obligation of, or guaranteed by, the bank."
"This product is subject to investment risks, including possible loss of the principle amount invested."
"This product is not insured by the Federal Deposit Insurance Corporation."
Capital One 360 CD accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to allowable limits.
Can't believe there is a YouTube video on it. "Non-certificate" is not a common banking term (I work in finance and investments) and likely they may have intended to say that these certificates are "non-negotiable".
Brokered CDs sometimes are not insured. CDERS, Yankees, Bears and Bulls are CDs that typically are not insured. If a bank sells you a CD, they must disclose that it is subject to risk. It's the law!
These are the typical statements that they must make.:
"This product is not a deposit or other obligation of, or guaranteed by, the bank."
"This product is subject to investment risks, including possible loss of the principle amount invested."
"This product is not insured by the Federal Deposit Insurance Corporation."
I asked chatGPT the following!
Quote
:
what is non-certificate time deposit?
A non-certificate time deposit is a type of savings account offered by banks and financial institutions that allows you to deposit funds for a fixed period of time and earn interest on those funds. Unlike a certificate of deposit (CD), which is a type of time deposit that typically requires a minimum deposit and locks in your money for a specific term, non-certificate time deposits may offer more flexibility in terms of deposit amounts and withdrawal options.
Non-certificate time deposits may have varying terms, typically ranging from a few months to several years. Interest rates on non-certificate time deposits may be fixed or variable and may be tiered based on the deposit amount or length of the term. Withdrawals made before the maturity date may be subject to penalties, such as forfeiting some or all of the interest earned.
Non-certificate time deposits may also be called time deposit accounts, term deposit accounts, or simply time deposits. It's important to review the terms and conditions of any savings account before opening it to ensure you understand the interest rate, deposit requirements, penalties, and other features.
Are the non-certificate deposit FDIC insured?
Yes, non-certificate time deposits are generally FDIC insured, up to the maximum amount allowed by law. The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that provides deposit insurance to protect depositors in case of a bank failure. FDIC insurance covers deposits at FDIC-insured banks and savings associations, including non-certificate time deposits, up to $250,000 per depositor, per insured bank, for each account ownership category.
It's important to confirm that your bank or financial institution is FDIC insured before opening a non-certificate time deposit account. You can check if a bank is FDIC insured by using the FDIC's BankFind tool, which provides information on FDIC-insured institutions, including their insurance status and history.
Interesting.. I am more convinced that this FDIC insured!
OK I'm in. If this goes through without a glitch might buy more at different maturity dates. Money in current bank's savings account paying me almost nothing.
Our community has rated this post as helpful. If you agree, why not thank danteshors
03-15-2023 at 05:02 AM.
If you have money in a regular savings account at Bank of America, Wells Fargo or Chase - as a fellow human being of the planet earth I implore you to take note how much they are making off you and to move your money.
Ally has a no penalty cd at 4.75%. I was thinking of parking my money here and if rates go up, pull the money out and roll it into something higher since there is no penalty
Ally has a no penalty cd at 4.75%. I was thinking of parking my money here and if rates go up, pull the money out and roll it into something higher since there is no penalty
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When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.
I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k
Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.
I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD
just my 2cents
Fidelity Fixed Income Page [fidelity.com]
Follow the above link and scroll down to the row "U.S. Treasury." Choose the duration you want and click on it. You can then click "buy" to start a trade of a specific treasury bill/bond.
Fidelity's Intro to Treasuries [fidelity.com]
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Every Capital One 360 CD balance is insured up to the FDIC's allowable limits.
https://www.capitalone.
From some of the same people:
1. Don't lock in a long CD because rates could go up.
2. Don't get a HYSA because rates could go down.
https://www.capitalone.
Are online CDs safe and FDIC insured?
Capital One 360 CD accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to allowable limits.
Can't believe there is a YouTube video on it. "Non-certificate" is not a common banking term (I work in finance and investments) and likely they may have intended to say that these certificates are "non-negotiable".
Brokered CDs sometimes are not insured. CDERS, Yankees, Bears and Bulls are CDs that typically are not insured. If a bank sells you a CD, they must disclose that it is subject to risk. It's the law!
These are the typical statements that they must make.:
"This product is not a deposit or other obligation of, or guaranteed by, the bank."
"This product is subject to investment risks, including possible loss of the principle amount invested."
"This product is not insured by the Federal Deposit Insurance Corporation."
Are online CDs safe and FDIC insured?
Capital One 360 CD accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to allowable limits.
Can't believe there is a YouTube video on it. "Non-certificate" is not a common banking term (I work in finance and investments) and likely they may have intended to say that these certificates are "non-negotiable".
Brokered CDs sometimes are not insured. CDERS, Yankees, Bears and Bulls are CDs that typically are not insured. If a bank sells you a CD, they must disclose that it is subject to risk. It's the law!
These are the typical statements that they must make.:
"This product is not a deposit or other obligation of, or guaranteed by, the bank."
"This product is subject to investment risks, including possible loss of the principle amount invested."
"This product is not insured by the Federal Deposit Insurance Corporation."
A non-certificate time deposit is a type of savings account offered by banks and financial institutions that allows you to deposit funds for a fixed period of time and earn interest on those funds. Unlike a certificate of deposit (CD), which is a type of time deposit that typically requires a minimum deposit and locks in your money for a specific term, non-certificate time deposits may offer more flexibility in terms of deposit amounts and withdrawal options.
Non-certificate time deposits may have varying terms, typically ranging from a few months to several years. Interest rates on non-certificate time deposits may be fixed or variable and may be tiered based on the deposit amount or length of the term. Withdrawals made before the maturity date may be subject to penalties, such as forfeiting some or all of the interest earned.
Non-certificate time deposits may also be called time deposit accounts, term deposit accounts, or simply time deposits. It's important to review the terms and conditions of any savings account before opening it to ensure you understand the interest rate, deposit requirements, penalties, and other features.
Are the non-certificate deposit FDIC insured?
Yes, non-certificate time deposits are generally FDIC insured, up to the maximum amount allowed by law. The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that provides deposit insurance to protect depositors in case of a bank failure. FDIC insurance covers deposits at FDIC-insured banks and savings associations, including non-certificate time deposits, up to $250,000 per depositor, per insured bank, for each account ownership category.
It's important to confirm that your bank or financial institution is FDIC insured before opening a non-certificate time deposit account. You can check if a bank is FDIC insured by using the FDIC's BankFind tool, which provides information on FDIC-insured institutions, including their insurance status and history.
Thanks for the reminder. Opened an account just now.
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Our community has rated this post as helpful. If you agree, why not thank danteshors
https://www.bankrate.co
Chase and BOA currently sitting at 0.01% interest and Wells Fargo savings account is sitting at 0.15%.
Ally has a no penalty cd at 4.75%. I was thinking of parking my money here and if rates go up, pull the money out and roll it into something higher since there is no penalty
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This is great, repped! I'll do the same