CD recommendations?

Any good CD rates currently?


There are many banks offering 4.35- 5% but most are on 3/4 year to 1.5 year CD’s. My bet is that interest rates won’t be as favorable when these relatively short term CD’s mature. That’s opportunity cost. VMRXX at Vanguard [a money market account] is currently paying over 4.7% for it’s 7 day yield. I think that’s a pretty good place to stash emergency money, esp. if you’re already a Vanguard client. You just have to keep an eye on it and move it if MMA rates decrease below what you could get elsewhere.

I have $$ in Discover Bank, because I also have a Discover credit card, so it’s easy – one website.

Their CD rates are 4.50% 12 month, 4.75% 18 month… Certificate of Deposit | High Yield CD | Discover

Here are 2 good ones where I have accounts.
5.0% APY 6-month CD at CIT Bank.
5.05% APY 10-month CD at Marcus by Goldman Sachs.

PenFed is offering 4.7% on an 18 month CD. There probably are CDs or MMAs paying > 5%

T-Bills and T-Notes also make sense. A 4.7% T-Bill rate could have an effective rate of 4.7% to 5.4%

MYGAs could make sense too though they’re not backed by the full faith and credit and are not FDIC or NCUA insured. T-Bonds are an alternative

You could look at bond funds that have a mixture of corporate, federal govt, and/or municipal bonds

I’ll opine also that brokerages like Vanguard and Fidelity have easier and better rate offerings for CDs versus going to a local bank or buying a CD online from a bank direct. Lately too, the 4 month ( 17 week) treasury bill has had the highest rates versus pretty much any other treasury. I use Treasury Direct to buy bills in $100 increments. Fidelity has some CDs you can buy in $100 increments from time to time too.

I’m not sure Vanguard offers CDs. Their money market account are over 4.7% 7-day SEC yield, though.

I’d have to say that high interest rates on short term CDs come with opportunity costs. When these CDs come due, interest rates will probably be much lower and I may have missed my chance to lock in an almost-as-good longer term CD rate. My thoughts are that bank officials are better predicters of future rates than I am, which is why they are offering these term lengths. In the meantime, money market rates are stellar right now, so you can put money there while you make a decision about CDs. I have noticed that Bankrate doesn’t list some of the better CD rates I see at my own credit unions so it pays to check around yourself- Marcus, CIT, PenFed, etc.