CD Rates

caroln said:
I just had a CD come due. Went to the bank to check new CD rates and found out my checking account was paying a better rate than CDs. Cashed out the CD of course. Sad state of affairs....
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I have a CD that matures in three weeks. I let a previous one roll over last year and the best they would give me was 1.05% this time they are offering me 0.55% on a $21K CD. That is just plain insulting, especially when inflation is taking off and Government I-Bonds are paying over 3.0%.
 

The only thing worse than low rates is not having cash when you need it.

If the reasons for holding cash are still valid then stick with it and don't chase the yields offered by things that you do not understand or are not comfortable with.

I try to average my low returns on cash into the returns on my other investments. The drag of low rates on cash only drops my overall return by a few basis points and I can live with that kind of tradeoff.
 
Aunt Bea said:
The only thing worse than low rates is not having cash when you need it.

If the reasons for holding cash are still valid then stick with it and don't chase the yields offered by things that you do not understand or are not comfortable with.

I try to average my low returns on cash into the returns on my other investments. The drag of low rates on cash only drops my overall return by a few basis points and I can live with that kind of tradeoff.
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So where do you put most of your investments...in the market - funds or etfs? We always have a large amount in cash...too much cash. We're in the market of course, but I'm sitting here trying to figure out what to do with these big bucks. Any ideas greatly appreciated. We're coming up like $8-10 grand short each year now due to the non existent CD rates.
 
Don M. said:
Money in the bank, CD's, and Treasuries, etc., are earning very little in recent years....certainly not enough to keep up with inflation. About the Only way to make any money is to be invested in the markets....and be willing to ride out the ups and downs.
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Yes, that's the truth. It does make you a bit nervous though to keep adding so much cash back into the market when you are in the "drawdown phase" of life...lol. Maybe got way less time to make it back in a crunch!
 
Liberty said:
So where do you put most of your investments...in the market - funds or etfs? We always have a large amount in cash...too much cash. We're in the market of course, but I'm sitting here trying to figure out what to do with these big bucks. Any ideas greatly appreciated. We're coming up like $8-10 grand short each year now due to the non existent CD rates.
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No earth-shattering inside information here.

My main source of income for day-to-day expenses comes from Social Security. The income from my taxable accounts is available for splurges or unusual expenses. What doesn't get spent gets reinvested. My IRA distributions are reinvested and continue to grow.

I use a money market fund for cash reserves various balanced and stock index funds offered by Vanguard for my taxable accounts and IRA.

I'm not rich or a savvy investor. I'm what the old folks in my family used to call comfortable.

"There is no dignity quite so impressive, and no one independence quite so important, as living within your means." - Calvin Coolidge
 
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Aunt Bea said:
No earth-shattering inside information here.

My main source of income for day-to-day expenses comes from Social Security. The income from my taxable accounts is available for splurges or unusual expenses. What doesn't get spent gets reinvested. My IRA distributions are reinvested and continue to grow.

I use a money market fund for cash reserves various balanced and stock index funds offered by Vanguard for my taxable accounts and IRA.

I'm not rich or a savvy investor. I'm what the old folks in my family used to call comfortable.

"There is no dignity quite so impressive, and no one independence quite so important, as living within your means." - Calvin Coolidge
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Love it. Ditto here...was nice to see that "inflation protection" CD rates coming in though. Seems like you never take anything out of the market...lol. Guess the heirs will.
 
I had a cd mature last week. I thought I'd try online banking and got so confused trying to figure out passwords, and then they wanted me to ok the transfer of funds by sending me two deposits. Then they wanted me to put a code in a place that they said I asked for. I have no idea what that was all about.
Finally I said enough is enough. I found an unadvertised local bank offering 1%. It matures in 5 years. I may not be around to collect but it was a small cd and the kids are beneficiaries.
I could hear my mom in the background saying. "don't be greedy."
She did all her banking in local banks if the rates were down, so be it.
Now its in a local bank and I didn't have to pay wiring fees.
My mom has been gone for 15 years and she still gives me good advice . To bad I have to learn the hard way, sorry mom, next time I will listen.
 
The system is rigged so you invest in the stock market. The Secretaries of the Treasury all come from Wall St.
 
mathjak107 said:
Even in the high inflation 1970s returns on cds were negative real returns ..it is just a function of inflation vs rates
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That's true, but investing in the market can be worrisome for a lot of folks. The CD rates will come back up in a year or so right after the Fed figures out the total inflation isn't "temporary" and raises the interest rates...duh!

Personally, I took our lifespan guesses, deciding how much "extra money" we would need to live in the lifestyle to which we had so loved and become accustomed to, added a few years on to that - socked the money away in fixed insured savings, and plunked down most of the rest of the dough in cheap DIY index funds...lol.
 
the best way is a diversified approach

I don’t carry high equity levels anymore , don’t need to ..30-40% works fine .

the last few days I am accumulating the inflation hedges , commodities via dbc and gold via Gld .

they will ride shotgun alongside my core portfolio of equities, bonds and cash
 
mathjak107 said:
the best way is a diversified approach

I don’t carry high equity levels anymore , don’t need to ..30-40% works fine .

the last few days I am accumulating the inflation hedges , commodities via dbc and gold via Gld .

they will ride shotgun alongside my core portfolio of equities, bonds and cash
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They better sew some bigger pockets in your shroud cause you might think you are going to take it with you...lol. Or maybe you are giving a lot away to charity these days?

I like to keep it simple. Passive income, lazy portfolio, not an all consuming interest pursuit for this old chick...got lots of other nature interests...too many interests, too little time...ha ha.

Good advice, though about commodities. Gotta work them though.
 
Liberty said:
So where do you put most of your investments...in the market - funds or etfs? We always have a large amount in cash...too much cash. We're in the market of course, but I'm sitting here trying to figure out what to do with these big bucks. Any ideas greatly appreciated. We're coming up like $8-10 grand short each year now due to the non existent CD rates.
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I used to buy CDs and Savings Bonds back when they were paying some interest but haven't done that for years. The only thing I can see right now that's paying anything is the market. I have my investments in mutual funds and ETFs. And we do take money out of them when we need to. Yes, you get taxed but only on the capital gains.

We have very little money sitting around not working for us.
 
Uptosnuff said:
I used to buy CDs and Savings Bonds back when they were paying some interest but haven't done that for years. The only thing I can see right now that's paying anything is the market. I have my investments in mutual funds and ETFs. And we do take money out of them when we need to. Yes, you get taxed but only on the capital gains.

We have very little money sitting around not working for us.
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But, now, in weeks like this past one, it would be easy to see the market taking and inflation dive, hitting rock bottom and thentaking quite a while to grow it back. Not nice for old folks to be forced into putting so much of their savings into the market. Thank heavens we aren't in that position.
 
Even at 65 we have money we won’t eat with for two to three decades ….that is still very long term money , you have as much recovery time as you did in your younger years .

a 40 to 60% equity portfolio allows you enough short term and intermediate term money to be safe whilvkeep that long term money invested ….a 50/50 has never ever lost a penny in any ten or twenty year period or longer
 

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