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New issue CDs 1y 5.45% - offered by various issuers on Fidelity website
https://fixedincome.fid
New issue CDs by top rates:
CDs
3mo 5.30
6mo 5.30
9mo 5.35
1yr 5.45
1. To explore and buy CD's on Fidelity website you need an account.
2. The rates above are for callable CD's, non-callable CD's offer slightly lower rates, for example, for 1y CD callable APY 5.45%, non-callable 5.3%.
3. Nice feature of a Fidelity account is that if you cannot decide which CD to choose you can in short term keep your money in Money Market account SPAXX that currently pays respectable 4.75%.
https://digital.fidelit
RATES AS OF 9:07 PM EDT 06/26/2023
New issue CDs by top rates:
CDs
3mo 5.30
6mo 5.30
9mo 5.35
1yr 5.45
1. To explore and buy CD's on Fidelity website you need an account.
2. The rates above are for callable CD's, non-callable CD's offer slightly lower rates, for example, for 1y CD callable APY 5.45%, non-callable 5.3%.
3. Nice feature of a Fidelity account is that if you cannot decide which CD to choose you can in short term keep your money in Money Market account SPAXX that currently pays respectable 4.75%.
https://digital.fidelit
RATES AS OF 9:07 PM EDT 06/26/2023
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Callable CD gives the bank option to terminate your CD at any time before the maturity date.
Callable CD gives the bank option to terminate your CD at any time before the maturity date.
You have to have an account with Fidelity there's no minimum balance to open an account and then that information is under the CD area.
Q; Is there a minimum to open a Fidelity account?
A; Zero account minimums and zero account fees apply to retail brokerage accounts only.
Brokered CDs on Fidelity 2023: How to Buy New and Secondary CDs
https://www.youtube.com/watch?v=k206NBc
Callable vs non-callable might be important for long term CDs 5-20y.
For 1y term callable CD is fine for most people, as shown by the supply and demand callable vs non-callable. However, this might change once the interest policy will change.
I have a number of callable CDs (3m to 1y term) and none of them was called so far, in case they will be called I will have my cash back and can reevaluate my investment objectives and options.
Everybody has different investment objectives and sensitivity to risk-reward and that is why the CDs offerings differ widely in features.
3mo 5.30
6mo 5.30
9mo 5.35
1yr 5.45
18mo 5.35
2yr 5.35
3yr 5.35
4yr 5.25
5yr 5.25
10yr 5.30
20yr 5.00
You can find in the maze of attributes:
"Call protection Yes"
To make things simple, after initial exploration of all attributes, my approach is as follows:.
1. In rising interest rates period (which is now) I go for highest APY which means callable CDs ,and prefer shorter term 3m-1y.
2. Once the interest will start to go down I will switch to non-callable and will go longer term (3-20y), but I might also just go back to stock market all together.
TRUIST BK CHARLOTTE N C CD 5.30000% 06/28/2024
Certificate of deposit As of Jun-27-2023 7:11:06 AM ET
Click to refresh
Buy
Time period1 Year
Yield(APY)Open Popover5.300%
Maturity dateOpen Popover06/28/2024
Minimum investment$1000
Pay frequencyAt maturity
About this CDCUSIPDSN6N9511
Open PopoverFDIC insuredYes
Open PopoverFDIC certificate number9846
Minimum investment$1000
Incremental investment$1000
Open PopoverSurvivor optionYes
Open PopoverBlue sky statesYes
Bank StateNC
Federally taxableYes
Open PopoverMarginableNo
CD timelineIssue date06/30/2023
Open PopoverDated date06/30/2023
First interest payment06/28/2024
Last interest payment--
Open PopoverMaturity date06/28/2024Redemptive featuresOpen Popover
Call protectionYes
Continuously callableNo
Open PopoverWorkout date06/28/2024
Coupon detailsCoupon5.300%
Open PopoverCoupon typeFIXED
Open PopoverCurrent rate effective date06/23/2023
Open PopoverDay count basisACT/365 OR ACT/ACTForeign informationForeignNo
InternationalNo
Domicile country
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IMHO, CDs are easier to understand and buy. Treasuries require more expertise and understanding of terms like coupon rate, ask to maturity, yield to maturity, treasury STRIPS etc. More ambitious and experienced investors might prefer T-bills. For those that prefer simplicity and don't want to spend time to become T-bill experts, CDs might be way to go.
Below is an example from Fidelity T-bills offer:
Description Coupon Maturity Date Moody's Rating Price Bid Price Ask Yield Bid Ask Yield to Worst Ask Yield to Maturity
U S TREAS SER AB-2023 2.75000% 07/31/2023 NTS NOTE 2.75 07/31/2023 AAA -- 99.695 99.726 6.043 5.707 5.707
U S TREAS NT STRIPPED PRIN PMT 0.00000% 05/15/2024 0 05/15/2024 -- -- 95.336 95.736 5.499 5.011 5.011
U S TREAS NT STRIPPED PRIN PMT 0.00000% 02/15/2024 0 02/15/2024 -- -- 96.644 96.858 5.47 5.111 5.111
Call Date - Call Price - Call Type
09/30/2023 - 100.000 - Par Call
10/30/2023 - 100.000 - Par Call
11/30/2023 - 100.000 - Par Call
12/30/2023 - 100.000- Par Call
Non-callable or call protected 10y CD rate at Fidelity website is much lower 3.9%.
1. The big rate difference means that the issuers bet that the interest rate will eventually go down in the next 10 years. I think so as well.
2. The chances that the callable 10y CD will be eventually called are high.
10y CD from Fidelity:
Description Coupon Coupon Freq Maturity Frac CD Yield Call Protected Settlement Date Quantity Available Attributes Period
TS BANK 5.300 MONTHLY 06/30/2033 No 5.300 No 06/30/2023 7,390 SFP FDIC SO 10 YR
AMERICAN BANK 5.150 MONTHLY 06/30/2033 No 5.150 No 06/30/2023 1,790 SFP FDIC SO 10 YR
FARMERS & MER 3.900 MONTHLY 06/30/2033 No 3.900 Yes 06/30/2023 557 CP SFP FDIC SO 10 YR
Call Date - Call Price - Call Type
09/30/2023 - 100.000 - Par Call
10/30/2023 - 100.000 - Par Call
11/30/2023 - 100.000 - Par Call
12/30/2023 - 100.000- Par Call
In simple terms means they have an option to give you your money back with accrued interest. before the end of the original term.
Somehow, even something so simple as CD can be complicated by bankers and brokers.
Additionally:
"CD's price is generally quoted at a percent of par value."
IMHO, CDs are easier to understand and buy. Treasuries require more expertise and understanding of terms like coupon rate, ask to maturity, yield to maturity, treasury STRIPS etc. More ambitious and experienced investors might prefer T-bills. For those that prefer simplicity and don't want to spend time to become T-bill experts, CDs might be way to go.
Below is an example from Fidelity T-bills offer:
Description Coupon Maturity Date Moody's Rating Price Bid Price Ask Yield Bid Ask Yield to Worst Ask Yield to Maturity
U S TREAS SER AB-2023 2.75000% 07/31/2023 NTS NOTE 2.75 07/31/2023 AAA -- 99.695 99.726 6.043 5.707 5.707
U S TREAS NT STRIPPED PRIN PMT 0.00000% 05/15/2024 0 05/15/2024 -- -- 95.336 95.736 5.499 5.011 5.011
U S TREAS NT STRIPPED PRIN PMT 0.00000% 02/15/2024 0 02/15/2024 -- -- 96.644 96.858 5.47 5.111 5.111