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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Maturing CDs
    In reading the various recent posts regarding banks and brokerages, I assume everyone's spouses have the skill sets, to do all the financial transactions online, without your direct assistance? With regard to Schwab, there is no local Schwab office where we live, so everything related to Schwab is online activity. When I have attempted to "train/educate" my spouse to be able to conduct online activities, she gets frustrated and upset, because it is not simple to her. Her response to my educational efforts with her is: "Just write it down and if something happens to you, I will try to call the toll free number and do my best to figure it out". We do have a designated person with Schwab, that we can contact for our Schwab account, and he has requested that we visit him at his office, to discuss brokerage account details--he is located 2 hours away in Dallas, in a very congested setting. Making a 4 hour round trip drive to Dallas to meet and talk to this Schwab representative is not a very appealing activity for my spouse or me.
    My spouse is "old school", familiar with brick and mortar banks that are close and convenient, with a real person she can visit and talk with regarding financial matters. Doing that online is intimidating to her, is complicated to her, and it is scary to her. But everyone's situation is different, and maybe your spouses are comfortable and able to do that online independently, without your assistance when necessary.
    Good point. My guess would be that 90% or more of the public lacks the skill-set evident regularly on this forum. I’m convinced that a few here trade C/Ds, stocks & ETFs in their sleep at night. Things not only your wife but most would be uncomfortable doing. Certainly there is a wide variance here as well - but most would appear far above the norm.
    When I bought a new car a month ago, at first the local dealer balked at taking a check written on my Fido C/M account, preferring funds be wired. But it was the last day of the month (Saturday) and they were pushing to get the car out, so broke their house rules and accepted the check. Gosh - haven’t run into this before. I’ve never wired funds (at least in recent memory). I’d imagine it can be done online but might take an extra day?
    I don’t write checks on the Fido C/M often. Mostly for large purchases, taxes, home infrastructure. I also keep a bit of cash in a TOD account at Fido just so I can keep the “invested” cash (part of overall portfolio) separate from that earmarked for near term expenses. Could be done on paper, but simpler this way. Easy to move the $$ back and forth. Up until a few months ago Fido defaulted cash into a lower interest rate offering. I think it was an FDIC insured bank account. But thanks to @msf’s comments and those of others here we have learned that there is now a way to bypass that default setting and have C/M and TOD accounts kept in a higher yielding money market fund.
  • Maturing CDs
    In reading the various recent posts regarding banks and brokerages, I assume everyone's spouses have the skill sets, to do all the financial transactions online, without your direct assistance? With regard to Schwab, there is no local Schwab office where we live, so everything related to Schwab is online activity. When I have attempted to "train/educate" my spouse to be able to conduct online activities, she gets frustrated and upset, because it is not simple to her. Her response to my educational efforts with her is: "Just write it down and if something happens to you, I will try to call the toll free number and do my best to figure it out". We do have a designated person with Schwab, that we can contact for our Schwab account, and he has requested that we visit him at his office, to discuss brokerage account details--he is located 2 hours away in Dallas, in a very congested setting. Making a 4 hour round trip drive to Dallas to meet and talk to this Schwab representative is not a very appealing activity for my spouse or me.
    My spouse is "old school", familiar with brick and mortar banks that are close and convenient, with a real person she can visit and talk with regarding financial matters. Doing that online is intimidating to her, is complicated to her, and it is scary to her. But everyone's situation is different, and maybe your spouses are comfortable and able to do that online independently, without your assistance when necessary.
  • Maturing CDs
    @dtconroe,
    I am requoting my previous post for reference. I never had any bad experiences with CUs when I was their customer.
    I can endorse CU as financial institutions, especially for their excellent customer service. I have dealt with them over the years. I never had large enough invested with them to worry about their balance sheet or how NCUA works. It seems they get into trouble far less than regional / community banks. Do your DD.
    In the interest of full disclosure, I stopped doing business with them when cyber attacks of US businesses became more prevalent. Just my luck, a few years after I closed my account, Patelco CU had a cyber attack and my info was compromised.
  • Maturing CDs
    Use banks or CU for banking services. Use brokerages for brokerage banking services.
    Why not use a brokerage for banking services?
    In 1977, Merrill Lynch took a gamble with a concept known as a CMA (cash management account). This blending of banking and broker services into a one-stop-shop for financial services ...
    https://www.sri.com/press/story/75-years-of-innovation-cash-management-account-cma/
    Several brokerages offer cash management services. You can write checks and use a debit card from a Schwab brokerage account - you don't need Schwab bank for this.
    https://www.schwab.com/content/how-to-order-new-debit-credit-card
    You're not going to get a safe deposit box or take out a loan at a brokerage. But for your basic cash management and notary services, ISTM a brokerage can do just as well. And by using a brokerage for these services, that's one less account to have to deal with.
  • Maturing CDs
    One should avoid bank or CU financial advisors. They typically have high commissions & push a narrow group of products or firms' own products.
    A general salaried advisor at Fido or Schwab may offer better free, no obligation opinions.
    Use banks or CU for banking services. Use brokerages for brokerage banking services.
    Probably valid observations "in general" but would not work for my wife, in times of bereavement, in Tyler, Texas. I have to work with the cards I am dealt, including my wife's rigid resistance to travel 2 hours, to meet a stranger at a brokerage, that she has no history with. I have an opportunity to use this specific Financial Advisor, who my wife knows and trusts, and that has a much greater odds of succeeding. We can talk in generalizations all day long on these threads, but individual posters have to decide on what will work, for their specific circumstances
  • Maturing CDs
    One should avoid bank or CU financial advisors. They typically have high commissions & push a narrow group of products or firms' own products.
    A general salaried advisor at Fido or Schwab may offer better free, no obligation opinions.
    Use banks or CU for banking services. Use brokerages for brokerage banking services.
  • Maturing CDs
    It looks to me that a big CU is a better choice for safety. I use Penfed for their credit cards. It is federally insured by the National Credit Union Administration.
    I would not select a small CU for large amounts of Certificate of Deposit to get a small extra %.
    It's similar to MM. In a very risky market, I have used Fed MM and not the highest paying MM who can be locked.
    FD, I have other "agendas" going on here beside the attractive Share Certificate/CD offering. I am trying to develop a "process" of setting up some local resources for my wife to use, in case I die and my wife needs to deal with financial life, in my absence. My wife hates investing, but loves CDs from experiences managing her parents CDs when they were at end of life. At the Kelley Credit Union, they happen to have a licensed Financial Advisor she would trust, because he is the son of an old friend she use to work with. For my own piece of mind, and to address some increasing anxiety my wife has with how to handle financial resources in my absence, this is a viable plan for her to learn more and be prepared to be successful without me.
    These threads often have a lot more unique individual issues that impact each poster/investor, than just what asset products to use or not use, or what investing strategy will be the most productive.
  • Maturing CDs
    I can endorse CU as financial institutions, especially for their excellent customer service. I have dealt with them over the years. I never had large enough invested with them to worry about their balance sheet or how NCUA works. It seems they get into trouble far less than regional / community banks. Do your DD.
    In the interest of full disclosure, I stopped doing business with them when cyber attacks of US businesses became more prevalent. Just my luck, a few years after I closed my account, Patelco CU had a cyber attack and my info was compromised.
    BaluBalu'
    Thanks for your personal experience, and I am sorry for your bad experience. I totally agree with "Do your DD". I have never experienced issues with Credit Unions that you experienced, but just like Banks, Credit Unions should be researched. My "bad experiences" have occurred with Banks. Woodforest National Bank use to be my primary bank, until I experienced Identity theft issues. Someone got into my checking account information, wrote some huge and numerous bad checks over the course of just a couple of days, forcing me to file a Police Report, get a new Drivers License, and close my banking account. In the process of dealing with these issues, the local police department informed me that they had many similar problems with Woodforest National Bank and encouraged me to get a new bank with better security for depositor accounts. Of course, I experienced numerous "bank problems" during the 2007/2008 financial crisis, with several banks that went bankrupt and had to close--the most well known bank was the Countrywide Bank, where I had several CDs. Fortunately, my CD investments were okay with FDIC protections, but it took a little time to clean up the Countrywide mess! I did my Due Diligence on local credit unions in Tyler, and although I have been using another Credit Union (CASE Credit Union), it was not as good as Kelley Credit Union when it came to Share Certificates/CDs. As you said do your Due Diligence, and gather some quality information before making your financial decision.
  • Maturing CDs
    I can endorse CU as financial institutions, especially for their excellent customer service. I have dealt with them over the years. I never had large enough invested with them to worry about their balance sheet or how NCUA works. It seems they get into trouble far less than regional / community banks. Do your DD.
    In the interest of full disclosure, I stopped doing business with them when cyber attacks of US businesses became more prevalent. Just my luck, a few years after I closed my account, Patelco CU had a cyber attack and my info was compromised.
  • Maturing CDs
    Just a little additional information on Credit Unions. Credit Unions are very "similar" but not identical to banks. Credit Unions offer the same wide array of products that Banks do--checking accounts, savings accounts, credit cards, debit cards, bill pay, Share Certificates/CDs, and they offer a wide range of loans such as car, mortgage, and personal loans. They have government insurance protections (NCUA), which is virtually identical to FDIC for Banks. Almost every mid-size city or larger, will have several different credit unions that should be evaluated for customer service, financial health, and slight variances in interest rates and fees that accompanies their products.
    Yesterday, I visited the Kelley Community Credit Union in Tyler, Texas, a city of about 100,000 in population, one of the fastest growing cities in Texas, and a very popular city for Retirees. Kelley Credit Union has a very new and attractive brick and mortar facility, much nicer than the Bank I use. It also has more staff and more professional services in its facility, than the bank I use--for example they have a Professional Licensed Financial Advisor, who previously worked for Morgan Stanley, which my Bank does not have. The main reason I went to this Credit Union is because they offer one of the highest one year "non-callable Share Certificate/CDs at 4.5%, higher than what I can get at my Bank or at Schwab Brokerage. They were very professional and informed me of a special incentive program, if I use several of their products (checking accounts, debit cards, Direct Deposits, E-Statements, and at least $15,000 in deposits and loans) which would lead them to add" .3% to the existing 4.5% Share Certificate/CD so that the actual rate would be 4.8%.
    This is a quality and low risk option for my investments, and you may find similar options from a Credit Union in your area!
  • Maturing CDs
    I heartily agree with you, dt, that individual circumstance has a great deal of impact, at least in principle, on one's financial positioning, what one considers 'risky', and how much risk one is willing to incorporate into one's investments. All of that in addition to one's personal comfort level for allocation. So, yes, I would agree that the advice one may receive online is distorted by those, often absent, details, or by their variability amongst participants.
    Almost everyone means well, but it is as if we have different native tongues, and are, nonetheless, trying to explain our thinking. Over time, we come to understand the particular point of view of a recognizable poster, but we certainly need to be circumspect with regard to 'strangers', lest we be misunderstood (and, therefore, mislead). My own circumstances are enough different, that I hesitiate to offer advice without tons of qualification!
  • Maturing CDs
    racqueteer: "Risk is an odd and variable concept. People tend to view things which haven't exhibited poor outcomes as being "riskless", but just because something hasn't manifested, does not mean that its potential isn't present. Unless you believe in "something for nothing", good performers are taking risks; whether obvious or not. We simply don't observe the consequences of that risk until something goes wrong. Absence doesn't imply nonexistence."
    I have read this post a few times, scratched my head a bit about the various applications in the financial world, with it kind of reminding me of the "Deep Thoughts" skits on Saturday Night Live. In the investing/financial world, I am not sure you can avoid the impact of financial factors associated with "risk" that contributes to what you do with other financial decision making. For example, posters often take very strong positions regarding investing in equities, various categories of bond oefs, the importance of investment grade designations for various bond investments, financial health ratings for various banks and their products, role of various fixed income categories that have government insurance protections (FDIC,NCUA) for institutions like banks and credit unions, compared to some brokerage products like Brokerage Money Market funds. In the mutual fund world, standard deviation is commonly used measure to establish the "riskiness" of bond oefs, but often only within that category of bond oefs.
    One of my personal issues is how social security and company pension programs impact how much "risk" one will take in other types of investments, such as equities and bond oefs. How much do those pension programs form "safety nets" that allows an investor take more risks in other categories of investing. I have no company pension support payment, my social security payments are relatively small (some of my employers were not participating in social security). I try to use CDs and comparable "low risk" investments to form my safety net, since I do not have a safety net pension program in financial assets. It can all be very different for different investors/posters, and yet when people make posts, you rarely have a comprehensive and detailed set of information about that poster/investor, that forms the basis for giving away free financial advice to others.
  • Hospice Coverage
    You may have seen the news that the 39th President Jimmy Carter passed away after about 2 years under home hospice care.
    U.S. stock exchanges will close on Thursday, January 9 in observation of a national day of mourning in honor of former U.S. President Jimmy Carter, who died on Sunday at the age of 100.
    The New York Stock Exchange and the Nasdaq announced the closures on Monday, a customary gesture to honor deceased presidents.
    The Securities Industry and Financial Markets Association has recommended an early close on Jan 9 for the U.S. bond market at 2:00 p.m. ET/1900 GMT.
    https://www.reuters.com/world/us/wall-street-close-jan-9-honor-president-jimmy-carter-2024-12-30/
  • Maturing CDs
    It is better to understand the basics and contemplate than to eat what product selling financial institutions feed us. (loop back to YBB's post re ratings and securitization). No disrespect specific to VanEck intended (I use their products.)

    I agree with @yogibearbull’s explanation of how CLOs work. If he meant to ascribe blame for the Great Financial Crisis to CLOs I must have missed it. Do your own research. No need to trust VanEck.
    Here’s an article from Wharton
    Here’s one from the Financial Times
    From JP Morgan
    Yes, Investment grade rated CLOs entail more risk than highly rated corporate bonds. No. They did not cause or contribute to the GFC. No. You should not own them unless you understand the risk / reward trade-off and think they in some small way complement your overall investment portfolio. Just don’t conflate them with CDOs. No one benefits from such inaccurate unfounded inferences.
  • Maturing CDs
    It is better to understand the basics and contemplate than to eat what product selling financial institutions feed us. (loop back to YBB's post re ratings and securitization).
    No disrespect specific to VanEck intended (I use their products.)
  • Maturing CDs
    Human beings need reminding the same thing every few years to protect them from themselves. By now, in the minds of many, GFC is just an acronym devoid of the depth of its true meaning.
    All the more reason to understand the difference between CDOs which caused the 2007-2009 financial crisis and CLOs which did not.
    If you were invested to a significant degree when the GFC began (late 2007) it’s pretty hard to forget. I recall a chance meeting on the street in early ‘08 with an aquantence from my high school years, then retired, who recounted the pain he and his wife were going through having lost about half their life savings in a matter of months, (Some “high-yielding” mutual fund as I recall.)
  • Maturing CDs
    Regarding annuities, I had a bad experience in the 1980s, when my company retirement program was negatively impacted by bankruptcy of a major annuity provider--the Baldwin Company.
    Ah, the piano company. They were making loans to buyers (good pianos are really expensive) and so branched out into insurance. When it comes to insurance, better to stick with "professionals". Not that your employer gave you a choice.
    The Baldwin-United Corporation, the Cincinnati piano company that borrowed heavily to move into the insurance business, filed for protection under the bankruptcy laws yesterday [Sept 26, 1983] in one of the largest financial collapses in American history.
    The company was a casualty of overexpansion, built on complex financial maneuvers.
    https://www.nytimes.com/1983/09/27/business/baldwin-a-casualty-of-fast-expansion-files-for-bankruptcy.html
    The problems came ... when companies like Baldwin began using SPDA assets to prop up nonrelated ventures. Partly for this reason, brokers and financial planners are learing to be more skeptical about insurance company ratings provided by A. M Best's ...
    In an interview, [Mary Malgoire, a financial planner] and her partner, David Drucker, agreed that the SPDA is basically a good product - provided it is sold by a company with experience in annuities (preferably an insurance company) and provided SPDA assets are totally ''segregated,'' or kept separate from the rest of the company's business. This requires the investor to look into the company occasionally, look at annual reports, and find out how and where SPDA assets are invested.
    https://www.csmonitor.com/1984/1010/101040.html
    FWIW, Fidelity's SPDA offerings are generally from top tier insurance companies. (The only company not with a AA rating from either Best or S&P is Fidelity's.) Consequently these SPDAs don't pay the highest rates in the industry but provide more peace of mind.
  • Maturing CDs
    Our CD/Treasury ladder is only out to three years, but I'm 85 and don't want to go too far out. Our Schwab SUTXX MMKT is currently at 4.35% and falling, the CD/Treasury ladder is at 4.81%. I'm replacing CDs and Treasurys as they mature, which will gradually move out the ladder.
    At the moment the allocation is CD/Treasury ladder 43% and MMKT 57%. The main difference that I consider between CD/Treasury ladder and MMKT allocations is the possible need for "instant cash" due to future major medical issues. If it weren't for that I'd put almost everything into the CD/Treasury ladder. When we were younger we never kept this kind of money in either CDs or MMKTs.
    Old_Joe, I have a very similar position on my Fixed Income positions. I have kept my CD Ladder at no more than 2 years, as I want my CD ladder to have ongoing CDs maturing pretty frequently, and have some liquidity issues better addressed with frequently maturing, short term CDs. I also have a wife who has very strong wish to have shorter term CDs in case she needs it "for a facelift"! Her way of saying that she may want a new car, a facelift, or surgery/treatment for one of the many "health related" issues we are monitoring closely! We also are dealing with a couple of Adult children and their families, who are continually needing financial support for health issues, losing jobs, needing money for an array of creative and surprising needs that crop up. In short, the shorter term CD ladder works fine for my situation, but may not be what others need, with their personal and financial situation.
  • Maturing CDs
    AI Overview:
    Kelly Community Federal Credit Union (KCFCU) in Tyler, Texas has been described as one of the most financially sound credit unions in the United States. KCFCU offers monthly and annual financial reports that include financial performance summaries, goals, commitments, and questions from members.
    Credit unions are insured by the National Credit Union Administration (NCUA), which is similar to the Federal Deposit Insurance Corporation (FDIC) that insures banks. Most credit unions and banks are insured for up to $250,000 per customer.
    KCFCU was founded in 1963 by employees from the Kelly-Springfield Tire Plant to provide a safe place for workers to save and borrow money. The credit union's mission is to treat members like family and prioritize relationships over transactions.

    =====================================
    dt, KCFCU appears to be a worthy place to invest your money.
    That isn't the issue I have been beating to death on these threads which is duration.
    Let me try a different angle:
    What position do you think you are going to be in with interest bearing investment options in the 6-12 months after the investment you buy now matures?
    Given the current rates and current trend, do you think you are going to be able to find an interest bearing investment of any duration paying 4+% in 6-12 months?
    =======================================
    Aside FWIW: You don't seem to care too much for my input, but buddy, I've been playing the CD ladder game for 12-13 years and I've not lost yet. I'm sitting a 5-yr, CP CD ladder paying a wee bit over 5% that was there for taking a year or so ago. Today, a 5-yr, 4+% CP CD ladder is there for the taking, for anyone who can step away from the tree and see the forest.
  • Maturing CDs
    Thanks msf! I have a CD in my IRA account maturing in a few days. I am tempted to reinvest it in 2 year callable CD, treating it like a 6 month noncallable CD. If it is called, I think I will still be able to get a 4% replacement callable CD, and if it is not called then I am fine with that callable rate for the length of the CD.
    Regarding MMs, I am expecting all categories of MMs to fall below 4% in 2025--I will continue holding MMs but may reduce the amount I will keep in them.

    @dtconroe. a very prudent decision for someone not into risk/drawdown and who is not a trader. Regarding CLOs, what is conveniently not mentioned is like most everything else in Bondland they melted down too during the Covid meltdown. Investment grade CLOs from AAA to BBB had drawdowns from 10% to 30% while below investment grade drawdowns were 40% to 45%. As recently as 2022, while investment grade CLOs eked out a small gain (JAAA) of under 1% below investment grade lost money. The longest tenured bond fund primarily into CLOs ( an interval fund) lost money 4 years since its 2014 inception. In 2020 had a multi week drawdown of 30%. 2023 and 2024 just happened to be “the right place right time” for CLOs. I hold slightly under 50% in CLOs but I am more than cognizant of the risks. A substitute for cash they certainly aren’t.

    Thanks for your comment Junkster. These threads invite a wide array of responses, from posters with a wide array of investing preferences, and a wide array of personal financial circumstances that are the background to their financial decision making. I try to sort through the posted information, to see how much applicability it has to my personal investing criteria. This thread has led to a large variety of posters and posted information. I don't have any interest in CLOs, and I "currently" don't have any interest returning to the bond oef world of trading and momentum based decision making. I don't care for annuities and unique risks/rewards. CDs have been paying a very nice 5+% return for the last year, but that seems to be on the decline. I have never used callable CDs, but they do offer a better interest rate than noncallable CDs, for about 6 months and possibly longer. I am inclined to invest some maturing CD cash into a local Credit Union Share Certificate that pays about a half percent more than I can get at Schwab or my local bank. Different strokes for different folks, and their varied financial strategies and circumstances.