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.
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OP's description is wrong.
This is what's on the website for this product.
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.
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Great advice. For me, I'd rather just get the 4.75% CIT Platinum Savings account with no lock up and as you stated, it's very likely that rates will keep going up in the short term. It makes no sense to me to lock up money right now when rates are rising so quickly. The .25% is not worth it.
"CIT Platinum Savings account", I just learned...
They kept creating new saving account than modify rate for existing account...
"CIT Platinum Savings account", I just learned...
They kept creating new saving account than modify rate for existing account...
This, I moved over to bask because CIT notoriously does this. Create some new account flavor with a better rate and don't notify you proactively, of course as a customer I could care less what title of the month you call my online savings account, just give me the one with the best rate. Happier with bask bank no games.
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.
Only problem with T-bills is you need atleast one grand increments and even there the interest you get is lower for smaller amounts (when buying in secondary market). I am wondering if money market mutual funds are another option (there are tax exempt ones aswell) since there you can do with any amounts (>$0 ones). I see they quote the 7 day yields, but the 30 day yields are lower in some cases. For example fidelity's FDRXX has a current 7 day yield of 4.51%. However i can't seem to know the 1 month yields. I am hoping these will actually have effective one month yields higher while being fluid, again i am not sure if just keep in a high interest savings a/c is better...
Can I open account today with $0 and fund the CD the next few days? The CD term application state that 'Minimum amount to open is $1000'. It seems that it requires minimum $1,000 the moment I open the CD. Joanna at CIT told me otherwise: I have a few weeks to fund the CD. So the website or Joanna is correct? Thanks.
Per CIT website: 'Minimum of $1,000 minimum to open the account. You can transfer funds with electronic transfer, mail in check, or wire'
If the system accepts mail in check, I think Joanna is right.
5% for a 6 month CD is the going rate now. If the fed raises rates again it will go up.
If a recession hits or if the fed starts to lower rates (within the next few years) then you're better off locking in a longer term even if its a little lower.
I'm locked into a 5% CD for 27 months, think the best rate I've seen since was 5.35% (& it was callable which = not guaranteed to last to term). At some point you just take the rate & stop holding out for more.
& before someone says "you could get close to that in HYSA without having your money tied up"…I wanted the rate guaranteed for 27 months in case HYSA rates eventually fall during that window.
I also didn't want to go the i-bond route because I had way more than $10k to invest. You also have to forfeit 3 months of interest to cash out I-bonds. 3 months of no interest effectively lowers the I-bond rate down closer to 5%.
Great advice. For me, I'd rather just get the 4.75% CIT Platinum Savings account with no lock up and as you stated, it's very likely that rates will keep going up in the short term. It makes no sense to me to lock up money right now when rates are rising so quickly. The .25% is not worth it.
Expectations as to future rates are priced in to current rates. No one has a clue whether they will go up or down.
This, I moved over to bask because CIT notoriously does this. Create some new account flavor with a better rate and don't notify you proactively, of course as a customer I could care less what title of the month you call my online savings account, just give me the one with the best rate. Happier with bask bank no games.
Capital one does the same thing. It's a sneaky way to take advantage of the consumer. I had to switch accounts once a year to keep up with it. That was after not realizing my interest dropped to basically nothing months before.
I'm locked into a 5% CD for 27 months, think the best rate I've seen since was 5.35% (& it was callable which = not guaranteed to last to term). At some point you just take the rate & stop holding out for more.
& before someone says "you could get close to that in HYSA without having your money tied up"…I wanted the rate guaranteed for 27 months in case HYSA rates eventually fall during that window.
I also didn't want to go the i-bond route because I had way more than $10k to invest. You also have to forfeit 3 months of interest to cash out I-bonds. 3 months of no interest effectively lowers the I-bond rate down closer to 5%.
You can use trusts or LLCs to hold I-bonds as well to surpass that $10k limit. I hold some in an LLC owned by my Roth IRA to avoid the tax on interest.
Treasury bills with similar duration are yielding >= 5%. Treasury bills are more liquid and aren't subject to state tax. You can buy treasury bills through a brokerage account (e.g. Fidelity).
This, I moved over to bask because CIT notoriously does this. Create some new account flavor with a better rate and don't notify you proactively, of course as a customer I could care less what title of the month you call my online savings account, just give me the one with the best rate. Happier with bask bank no games.
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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 what's on the website for this product.
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"CIT Platinum Savings account", I just learned...
They kept creating new saving account than modify rate for existing account...
Open this too 4.5% Saving Connect
They kept creating new saving account than modify rate for existing account...
This, I moved over to bask because CIT notoriously does this. Create some new account flavor with a better rate and don't notify you proactively, of course as a customer I could care less what title of the month you call my online savings account, just give me the one with the best rate. Happier with bask bank no games.
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.
Per CIT website: 'Minimum of $1,000 minimum to open the account. You can transfer funds with electronic transfer, mail in check, or wire'
If the system accepts mail in check, I think Joanna is right.
If a recession hits or if the fed starts to lower rates (within the next few years) then you're better off locking in a longer term even if its a little lower.
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& before someone says "you could get close to that in HYSA without having your money tied up"…I wanted the rate guaranteed for 27 months in case HYSA rates eventually fall during that window.
I also didn't want to go the i-bond route because I had way more than $10k to invest. You also have to forfeit 3 months of interest to cash out I-bonds. 3 months of no interest effectively lowers the I-bond rate down closer to 5%.
Expectations as to future rates are priced in to current rates. No one has a clue whether they will go up or down.
Capital one does the same thing. It's a sneaky way to take advantage of the consumer. I had to switch accounts once a year to keep up with it. That was after not realizing my interest dropped to basically nothing months before.
& before someone says "you could get close to that in HYSA without having your money tied up"…I wanted the rate guaranteed for 27 months in case HYSA rates eventually fall during that window.
I also didn't want to go the i-bond route because I had way more than $10k to invest. You also have to forfeit 3 months of interest to cash out I-bonds. 3 months of no interest effectively lowers the I-bond rate down closer to 5%.
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Bread Savings is another option.