Picking up Nickels

Monday, September 18, 2006

Time to lock in 6% CD rates

CD rates are dropping, so it's time to think about locking in one of the remaining 6% deals out there. This morning, the attractive World Savings: 6.01% APY for 15-Month Internet CD deal that I took advantage of on August 31st has already been replaced with a 5.76% APY 13-month internet CD.

I have to admit that I was wrong about the recent decline in CD and T Bill rates since I didn't anticipate the drop in oil prices and the low CPI-U inflation numbers last came out last week. Along with the housing slowdown, these events seem to have convinced Mr. Market that rates will be trending down over the next year. At this point, it looks like I'm done with T Bills and savings bonds for now and will stick with CDs, high yield money market accounts, and a few EE savings bonds for my cash holdings.

I have several I Bonds that will be redeemed over the next few months (Should You Sell Those Savings Bonds?) since their interest rate has dropped to about 2%, and decided to reallocate that cash to a Penfed 6.00% APY 3 year CD.

Penfed (Pentagon Federal Credit Union) has an excellent reputation over at the FatWallet Finance Forum for excellent customer service as well as competitive loan and savings products. Ken at the Bank Deals Blog (a great resource), has a nice overview of his experience joining Penfed: Joining Penfed and Purchasing a Money Market Certificate.

I opened up my CD this morning at penfed.org, and will keep an eye out for a good deal on a 2 year CD to compliment my 15 month World Savings CD and 3 year Penfed CD.


  • I am going to wait till Bernanke gives some clear signals on the Sept 20th. Hopefully CD rates won't drop drastically after that.

    By Blogger GolbGuru, at 9/18/06, 3:26 PM  

  • It seems to me that lower rates are already priced into the market. Unless the FOMC raises rates on Wednesday (highly doubtful), I think rates will continue to drop.

    By Blogger Frugal Frugalson, at 9/18/06, 4:21 PM  

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