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View Full Version : Experiences,Recomendations investing in CD,s Online



michael langman
09-11-2018, 11:48 AM
My wife has come to me for advice in getting CD's online, and I feel uncomfortable in the risks involved with banking online.
It seems the interest rates are double or more then the rates at the Credit Unions and banks in my hometown area.

Do many of you here get Certificate of Deposits online and how do you know the bank is secure and risk free.

Thank you, Michael

Pat Barry
09-11-2018, 1:16 PM
Why wouldn't you just go to a bank in person?

Nicholas Lawrence
09-11-2018, 1:21 PM
Check with the FDIC. They maintain a list of insured institutions.

michael langman
09-11-2018, 1:53 PM
Pat, The interest rates in my area are at less then .5% and have always been low. I see rates at 2.6% online.

michael langman
09-11-2018, 1:58 PM
I will do that Nicholas. Thankyou.
I am also concerned about the security of my home computer. If someone could find my banking information online,( is that likely or possible), or if my wife opens an email that lets someone into her computer, could they access our CD account?
I just wonder if many people do get CD's online and feel secure about it.

keith wootton
09-11-2018, 3:43 PM
i got a cd with 2.5% interest at my local citibank branch about a month ago. however, it has become very hard to find a local branch in my area.....

George Bokros
09-11-2018, 4:32 PM
I have some CD's with Synchronybank.com and have fo several years. They are FDIC insured. They use two level security which requires them to either call or text you at a number you register when you open your first account.

Check them out. Currently offering an APY of 2.65% for 13 month CD. Way better than any thing I can find locally in my area.

Paul F Franklin
09-11-2018, 4:33 PM
I do all my banking, bill paying, mortgage, investments, etc, online and have done so for ages. The only time I've been in a bank in the last 10 years at least is to access my safe deposit box. I don't happen to do CD's but if I did I wouldn't hesitate to do them with an online bank.

I do take precautions, including using a password manager with strong passwords that are changed frequently, and also use a VPN whenever I access my online accounts. I try not access them from a public access point (e.g. Starbucks), although if I have to for some reason, I just make sure to use the VPN. VPN's used to be somewhat exotic; now they are common, easy to set up and use, and not expensive (but don't use a "free" one).

Make sure you are running anti-virus/malware software that is up to date. Backup your data files regularly.

Then make sure you are dealing with a reputable financial institution that has been in the online business long enough that they have an online reputation you can check.

Jim Becker
09-11-2018, 6:07 PM
Online banking and other financial transactions are the norm at this point and generally are quite safe and secure when you take reasonable care. There's really no great reason to avoid doing business with a credit union, investment firm or bank online when the product you want is available from them. As was already noted, of course...know who you are doing business with.

Nicholas Lawrence
09-11-2018, 6:25 PM
I will do that Nicholas. Thankyou.
I am also concerned about the security of my home computer. If someone could find my banking information online,( is that likely or possible), or if my wife opens an email that lets someone into her computer, could they access our CD account?
I just wonder if many people do get CD's online and feel secure about it.

I am not a security expert, but as a practical matter I think your accounts are online whether you access them that way or not. I have been banking online since 2000, and have accessed my accounts from all over the world without any problem. You should not do it if you are not comfortable though.

Within the last couple of years I opened a CD online. I filled out a form on their website, and then they had me print it, sign it, and mail it in with a check. You may be able to call the bank that interests you, ask for an application and do it by mail. If you call and ask the worst they can do is say no.

michael langman
09-11-2018, 7:24 PM
Thankyou Everyone. All this information sounds very positive. I run Malwarebytes on our computers and they seem to keep things very secure for us. They also offer virus protection with their premium plan.
I will check out Synchronybank George. That is the highest rate I have seen for a cd in a long time.

Paul forgive my ignorance, but what is a password manager? Is it a program on my computer?

michael langman
09-11-2018, 9:15 PM
Paul, I just read about password managers online. I will definitely be using one when get ready to set up my accounts. Thankyou for mentioning it in your post.

Paul F Franklin
09-11-2018, 9:20 PM
Yes, it's a program. Examples would be RoboForm and lastpass. There are many. Features vary, but they all keep an encrypted database of your passwords and can fill in the userid and password semi-automatically on web pages. You log in to the password manager and it takes it from there. Because you don't have to remember the passwords or type them in, there's no reason not to use unique and strong passwords for every different login/account. The program will also generate strong passwords for you using a mix of letters, numbers, special characters etc. Many of the programs offer a way to sync multiple computers and even your phone so you always have access to up to date passwords on all your devices.

Jim Becker
09-12-2018, 9:23 AM
Professor Dr. SWMBO uses LastPass and has for years.

Bill Dufour
09-12-2018, 9:33 AM
Depending on your age CD's are not a good investment. We all know Trump would be better off he he had invested his inheritance in index funds instead of trying to make money on his own. Several months ago Schawb had a special deal of set up an online account with no annual fees and no broker fees. So we did that. It is all online even at the office they just hand you a laptop already online to the correct website.
They set you up with a bank account then you can buy stocks, mutual funds or I am sure CD's.
Over the last 30 years the worst my mutual funds have done is 0% for the year. They average around 7-15% per year. A index fund will outperform ALL managed mutual funds in the last 60 years since mutual funds were invented.
The question is when do you want to take money out of the CD. If you are paying off any dept paying down principal is a better return then a CD at today's rates.
Bill D.

michael langman
09-12-2018, 10:33 AM
Good information on the password managers Paul and Jim. I will check out the ones you have mentioned. Thankyou.

Interesting about the index funds Bill. If we were younger I would be thinking like you, but my wife is going to be 73 this year. We are looking at cd's at this time in our lives.

Andrew Joiner
09-12-2018, 11:29 AM
I had your same concerns with online investing 25 years ago. I'm less trusting than most people, so I did a lot of research on security and still do.
The best part about CD's online security wise is the only way to get at the cash is to close the CD. The banks will only mail a check to the address you gave when opening the CD. Way more secure than credit or debit cards.
CD ladders are a good idea. Eventually you have no penalty access to your cash on a regular basis. I'd get the highest rate CD with the lowest early withdrawal penalty.
Often Credit Unions have the best rates. They are insured by NCUA very much like a banks FDIC iinsurance.
Get familiar with depositaccounts dot com rates survey. They are the best unbiased source for info. Many of the "bank account rates" websites put sponsored banks up first.
Do your own research, and good luck.

michael langman
09-12-2018, 7:56 PM
Some really good things I didn't know Andrew. About the only mailing to my address. That does make a lot of sense. I will check out deposit accounts. Much appreciated. Michael.

Bill Dufour
09-12-2018, 8:39 PM
Age 73, go with the CD not stocks. With the present president I think the market could tank at any time with Tarriffs etc. You might consider bonds which can be tax free income. CD interest will be taxable income if that matters to you.
It is very odd to reach an age where you have to consider how much longer will I and my wife live. I no longer consider lifetime guarantee to be any better then say a twenty year guarantee. I still have a lifetime guarantee Montgomery Wards socket that split.
Bill D.
PS:" US bond rate for two year bond is 2.752% no state or federal taxes, no risk.

three month bond 2.146%

Michael Weber
09-13-2018, 10:55 AM
This is a copy and paste of different financial instruments available interest rates on the Vanguard Mutual Fund website you may find useful. As Bill Dufour points out short term treasuries seem to be attractive. Okay that didn't copy over correctly. Move the line with the years over one column to the right to find the correct interest rate. Or go here https://personal.vanguard.com/us/FixedIncomeHome













Quick search (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=quic ksearch)
CDs (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=CD)
Treasuries (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=TRSY )
Agencies (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=AGCY )
Municipals (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=MUNI )
Corporates (https://www.tradewebretail.com/web/(S(f3d486681ce94c759075c5e0374c00f8))/Transfer.aspx?checkduplicateassertion=0#tabId=CORP )













As of 09/13/2018 10:34 a.m., ET https://www.tradewebretail.com/web/images/12_refresh.png


New Issue CDs
Yield


1 month
3 month
6 month
9 month
1 year
18 month
2 year
3 year
5 year
7 year
10 year


New Issue CDs
1.85%
2.00%
2.15%
2.20%
2.45%
2.55%
2.90%
3.10%
3.35%
3.40%
3.45%







Other securities
Yield


1 year
2 year
3 year
5 year
7 year
10 year
20 year
30 year


Treasuries
2.54%
2.75%
2.82%
2.87%
2.93%
2.96%
3.08%
3.11%


Agencies
2.59%
2.95%
3.06%
3.37%
3.63%
3.86%
4.21%
4.30%


Municipals (AAA)
1.86%
2.03%
2.14%
2.33%
2.69%
3.02%
3.77%
3.77%


Municipals (AA)
1.92%
2.07%
2.40%
2.71%
3.00%
3.29%
3.88%
4.00%


Municipals (A)
1.92%
2.24%
2.34%
2.74%
3.34%
3.49%
4.20%
4.13%


Municipals (BBB)
2.15%
2.91%
3.23%
3.71%
4.08%
4.30%
4.46%
4.27%


Corporates (AAA)
2.50%
2.69%
2.94%
3.14%
3.37%
3.52%
3.91%
3.92%


Corporates (AA)
2.74%
3.31%
3.39%
3.60%
3.86%
4.04%
4.26%
4.41%


Corporates (A)
2.81%
3.36%
3.55%
3.94%
4.30%
4.57%
5.25%
4.70%


Corporates (BBB)
3.04%
3.87%
4.22%
4.97%
6.58%
6.29%
7.20%
7.33%

michael langman
09-13-2018, 11:37 AM
Montgomery Wards is going back a few years Bill! And Treasury Bonds being interest free had slipped my mind.
I appreciate the chart Michael. Gives me some perspective on whats out there. Thanks Guys.

Jim Becker
09-13-2018, 12:45 PM
One of the advantages of the bond-based funds is that you have more ready access to the money if the need arrises whereas actual Certificates of Deposit have a lot more rules for that often include penalties for early withdrawal. The one year yield in that chart Bill provided isn't too shabby compared to many "safe" investments these days.

Nicholas Lawrence
09-13-2018, 1:42 PM
Age 73, go with the CD not stocks. With the present president I think the market could tank at any time with Tarriffs etc. You might consider bonds which can be tax free income. CD interest will be taxable income if that matters to you.


The market could crash at any time with any president, change of presidents, change of control of the house or senate, or change in policies by the federal reserve. Markets are too complex to be timed in a predictable way, as demonstrated by Paul Krugman predicting on election night the market would crash and never recover.

You certainly want to think about your time horizon. One other option, I have not seen mentioned is treasury inflation protected securities. They are variable yield, with a guaranteed rate over inflation.

If you are thinking about something other than an FDIC insured cd, and do not understand it, you should probably talk to a licensed financial advisor, rather than well meaning friends of uncertainqualification on the Internet. Vanguard, fidelity, similar companies will have people on staff who can offer advice. Taxes are important, but so are fees, including those incurred when you buy and sell.

Andrew Joiner
09-13-2018, 2:42 PM
Age 73, go with the CD not stocks. With the present president I think the market could tank at any time with Tarriffs etc. You might consider bonds which can be tax free income. CD interest will be taxable income if that matters to you.
It is very odd to reach an age where you have to consider how much longer will I and my wife live. I no longer consider lifetime guarantee to be any better then say a twenty year guarantee. I still have a lifetime guarantee Montgomery Wards socket that split.
Bill D.
PS:" US bond rate for two year bond is 2.752% no state or federal taxes, no risk.

three month bond 2.146%

Bill do you mean treasury bonds? Treasury Bonds are exempt from income taxation at the state and local level, but is fully taxable on your federal income tax return.

Many investment sites will look at average CD rates at US banks when comparing investments. That's why many people think CD's aren't so good. Depending on your state and tax bracket a CD ladder can beat Bonds. If you invest in the highest rate CD's available nationwide you can usually get higher rates than Bonds with a simple CD ladder.

michael langman
09-13-2018, 7:11 PM
I thought the interest rates looked pretty good too Jim.
After perusing the topic, " buying treasury bonds", I told my wife we should probably go talk to a financial adviser that can help us set up a bond account and hopefully put her savings to work helping us increase our income. Every little bit helps these days.

Bill Dufour
09-13-2018, 7:27 PM
I always thoughts government bonds were tax exempt. Maybe this is just from the jurisdiction that issues the bond. like state bonds for state taxes and federal bonds from federal taxes. Ask the person selling the bonds to you they will know for sure and laws may have changed about taxes with Trumps tax bill.
Bill

Dave Lehnert
09-13-2018, 11:13 PM
A lot of good info so far.
When looking for CD rates don't forget to check places like insurance co. State Farm has a 36 month 2.60 Apy. Around here you can just go to a local agent to open one.

michael langman
09-14-2018, 10:33 AM
Thanks Dave, we should have a State Farm in our area.
My wife just received a call from her credit union, and they said she had some wonderful news for her. They must have decided to up their rates.

Jim Becker
09-14-2018, 12:18 PM
Always remember to consider risk around the institution you buy from suddenly going away when buying things like "CD"s. Banks and Credit Unions generally have coverage, but not all other concerns do. The fine print matters in that respect...

Larry Frank
09-14-2018, 7:33 PM
I get my investment information from my financial advisor who has created a balanced portfolio that has done quite well and minimized risk. He has never recommended CDs. I guess I would rather get my information that way than a forum on woodworking. But, to each their own.

michael langman
09-14-2018, 7:57 PM
I'll be careful Jim. If our local credit union ups their rates my wife will probably go that route. I am going to still talk to a financial advisor about my savings though.

Ron Citerone
09-15-2018, 12:31 PM
Diversify, diversify, diversify.

Jim Andrew
09-16-2018, 9:51 PM
I have a money market account with Vanguard, you might check that out. I am reluctant to tie any money up at the moment, because the fed plans to raise rates again this year.

michael langman
09-17-2018, 12:02 PM
I learned about diversifying the hard way Ron. I lost a lot of my money in the tech stock crash quite awhile back.
Thanks for the tip Jim. With the inflation we are having, the rates should be going up, you would think.

Aaron Rosenthal
09-24-2018, 1:02 AM
I'm a Canuck, so a lot of the information you have gotten is not something I can comment upon.
I'm also 73, run my own stock portfolio and spend a lot (too much) time doing research.
The one thing I would advise you to do - find a good, fee based financial advisor. He/ she will look at everything and give you proper, independent financial advice. You'll pay for it, but at least you and your wife will have an independent specific plan.
Your life, your money.

Art Mann
09-24-2018, 1:06 PM
Financial advisers are like anything else. Some are worth paying a premium for. Others aren't worth listening to for free. The problem is there is no independent rating system to tell you which one you are dealing with. I have been an individual investor making my own decisions for over 30 years but about 5 years ago, I decided to hire a professional. He was part of a Nationally known brokerage firm and he came highly recommended from several friends. I gave him about half my portfolio to manage and I managed the other half myself. I was with him for less than three years. Suffice it to say that I am a much more savvy investor than he was.

Thomas L Carpenter
09-24-2018, 3:09 PM
I have a single CD with a local bank as an emergency fund. I've always felt that accessing it in an emergency would be a lot faster than going online and requesting it. The downside of course is taking a hit on the interest rate but I don't have it for making big bucks. Most of my retirement is with Fidelity and Vanguard and i wouldn't (don't) hesitate to handle finances online. I'm also 73.