CIT Bank 6-Month CD: Earn Expired

Why did this get a thumbs down when a few days ago, the 11 month at 4.8% got 27 thumbs up?

Maybe I'm wrong, but isn't a 5.0% APY mean 1-year. How does that work for a 6-month CD? Does that only get half?

Why did this get a thumbs down when a few days ago, the 11 month at 4.8% got 27 thumbs up?

No idea why this is getting down votes, but the 11 month @4.8% is a no-penalty CD, meaning you can withdraw at any time and keep the interest you accrued. Here, you have to hold for the full 6 months, otherwise you lose some of the interest you accrued. In an environment where the interest rates are changing rapidly, that no-penalty + longer duration is very valuable.

CIT Bank, our partner, offers the following benefits with their 6-Month CD.
$1,000 minimum to open
No penalty to access funds if needed before maturity
No opening or maintenance fees
Daily compounding interest to maximize your earning potential
Member FDIC
*See site for details

APY — Annual Percentage Yield is accurate as of March 31, 2023. $1,000 minimum deposit is required to open the account. A penalty may be imposed for early withdrawal of principal, and any early withdrawal (principal or interest) will reduce earnings.

Does switching an existing CIT Bank CD to this prior to the current one maturing incur additional fees? or is it just the interest penalty that one needs to pay?

This is one of the highest rates currently available, however, there may be better options depending on your financial situation. Also, you will have to consider what it is worth setting up accounts at a new bank, which may or may not have good customer service. There are several high yield savings accounts in the low to mid 4% range with no lock up. However, if the rates go down (pretty unlikely for the next months) you would earn the going rate. They also increase if rates increase.

Another thing to consider is that you are taxed both federally and at the state level for interest. If you live in a high tax state and are in the middle class income brackets, you are probably better off buying treasuries or T-bills, which are not subject to income tax at the state level. So in California, assuming a > $66,296 income, you pay 9.3% in state tax and 22% in federal tax. If you buy a T-bill, you would earn 4.5% or so depending on the going rate and term, which is only taxed at the federal level. This is essentially equivalent to the 5% being taxed at the state and federal level. While not FDIC insured, if US treasuries fail, you probably can't rely on FDIC insurance. You can sell a treasury at any time, just at the market rate, which may go up or down.

There are number of things to consider other than rate, so do your homework. This is a very low risk way to earn 5% APY for the next 6 months, but there may be better options depending on the accounts you already have and your financial situation.

This is one of the highest rates currently available, however, there may be better options depending on your financial situation. Also, you will have to consider what it is worth setting up accounts at a new bank, which may or may not have good customer service. There are several high yield savings accounts in the low to mid 4% range with no lock up. However, if the rates go down (pretty unlikely for the next months) you would earn the going rate. They also increase if rates increase.

Another thing to consider is that you are taxed both federally and at the state level for interest. If you live in a high tax state and are in the middle class income brackets, you are probably better off buying treasuries or T-bills, which are not subject to income tax at the state level. So in California, assuming a > $66,296 income, you pay 9.3% in state tax and 22% in federal tax. If you buy a T-bill, you would earn 4.5% or so depending on the going rate and term, which is only taxed at the federal level. This is essentially equivalent to the 5% being taxed at the state and federal level. While not FDIC insured, if US treasuries fail, you probably can't rely on FDIC insurance. You can sell a treasury at any time, just at the market rate, which may go up or down.

There are number of things to consider other than rate, so do your homework. This is a very low risk way to earn 5% APY for the next 6 months, but there may be better options depending on the accounts you already have and your financial situation.

But tbills are capped at 10k right?