Rates may be dropping in 2024, are you ready?

Brookswood

Brookswood

Senior Member
With the current pause in interest rates from the FED, and their thinking about three rate cuts on 2024, it’s time to think about going out longer when those CDs and bonds mature. Especially early in 2024 before more rate cuts are announced.

Already, 10 year t-bill rate has dropped about 0.8% in the last two months. In October is briefly hit 5% then started to inch it’s way down. Even 2 year CDs are about 4.8% and they are callable! IOW, the bank selling you that 4.8% can pay you back early and leave you with the problem of reinvesting your money at a lower rate.

I hope people have been locking in some of the older higher rates in October and November. If not see what you can find at your local credit union or one of the Internet Banks such as Ally. Also think about Ibonds.

I have no Crystal Ball and no connections with investment experts. This is just my opinion as of today. So do your due diligence and be careful out there. Above all don’t fall for high interest promises from strange people who advertise, call you up on the phone or post on social media. One outfit near me is advertising that it is paying 7%, but, there is no government guarantee on the principal, and you have to give 30 days notice to withdraw your money. Sorry, not for me.
 

I've had a savings with Ally for many years and can always get money out quickly if I need it. A few months before hubby passed away, I took advantage of their CD rates @ 5% for 9 months. They have better rates now but I'm leaving it like it is.
 
It’s called a CD ladder, take the amount you want to put in, divide, then roll it into 5 CD’s
3 months
6 months
1 year
15 months
2 years
set each to auto invest as they mature
 

the ten year bond is down over 1% since octobers high in yield so most bond funds are having a good year ..

shorter term bonds already reflect future rate cuts so the planning one does has to be based on the rumors not the news .

by the time the fed cuts rates it’s to late to lock in anything decent , as that ship sailed since the fed fund futures guide shorter rates well before the fed acts
 
I keep money that I want easy access to in ibonds which are 3.92%. I have moved other money into bonds with 5% rates but they are locked for a year.
 
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