What in the World is Going on

It has been very busy around here. I’m sorry that I haven’t posted in a while.

Big question. I wish I had big answers. Fed funds will most likely remain at the current level (0.00 to 0.25%) for the remainder of the year. CDs will probably continue to slide to levels around 1.5% to 2.00% for 1Y and 3.25% to 3.50% on longer-term CDs. Those are the levels we saw back in the lows of 2003 when Fed funds were at 1.00%.

Assuming the economy is beginning to make some recovery in 2010, the Fed could start to raise rates in early 2010 to Mid 2010. They tend to raise rates slower than they brought them down, so rates will probably remain relativley low through 2010.

The unknown is how much all of the bail-outs will affect higher inflation fears. Certainly, it would seem that at some point, the Piper is going to have to be paid. However, the Fed will be very leary of rates getting out of hand.

Housing probably won’t get much better this year. There are a lot loans that re-setting this year. Even though re-fi rates are down, many people still can’t re-fi because of the value of the home is way below what they purchased at. This will still leave many homeowners unable to pay their mortgages and more foreclosures. And of course, many more people have lost their jobs this year. 2010 will remain tough for housing.

The Gov’t is planning massive “bail-outs” that don’t amount to much more than pork heaven. I urge you to contact your representatives and tell them to take the pork out or be thrown out of office. This is just crazy.

I thought I would leave you with some positive thoughts.

The world bursts at the seams with people ready to tell you you’re not good enough. On occassion, some may be correct. But do not do their work for them. Seek any job: ask anyone out; pursue any goal. Don’t take it personally when they say “no” – they may not be smart enough to say “yes.” — Keith Olbermann (Broadcast journalist and host of MSNBC’s Countdown with Keith)

cd :O)

P.S. Here is a site with more best cd rates.

Merry Christmas and Happy New Year

Just wanted to wish you all a Merry Christmas. May your Christmas be filled with the Spirit of Christmas, family, and fun.

Thank you for spending time with us.

Looking forward to 2009 and all the possibilities that it holds.

Update 2/2/2009. It has been crazy busy around here, but I came across a site with some good solid posts on it. Give it a read, Private Banking

cd :O)
Chris Duncan

New Historic Lows

Today the 30-year treasury bond dropped to below 3% (2.95%) for the first time in history.

The Fed is also poised to lower the target rate for Fed Funds to 0.5%. Some think they might even go lower, but I think they want to leave room for another cut if the economy doesn’t start improving.

6-month CD rates will most likely fall to the 2.00% to 2.50% range. 1-year rates will probably be between 3.00% to 3.50%. The yield curve will probably be somewhat flat on the 2-Year to 4-Year, topping out around 3.70% to 3.80%. Finally the 5-year will probably slip to 4.25% to 4.50%.

One strategy that we have helped people with is investing in low penalty CDs. You may want to consider investing some funds in 5-year CDs, but look for 90-Day Early Withdrawal Penalties. You’ll pick-up some yield over the shorter-term CDs and if rates turn around in the next year or two, it won’t be that expensive to close the CD and move it to one with a better rate.

Hopefully, I’ll have a couple of more posts before the New Year. If not, have a Merry Christmas.

Countrywide Bank has slowed down their first mortage program, but are beginning to offer a Countrywide Reverse Mortgage program. I’m not sure how thrilled I am by that.

cd :O)

It’s Refer Your Corporate Friend Day — Get Paid $150

Update: 12/09/08 — This offer is still good. But rates went down a little since last week.

We’ve seen rates continue to fall this week. But one rate has remained high, and it doesn’t have a fee. However, there are a couple of catches. First, you have to be a Financial Institution such as a bank or credit union, or you have to be a corporation. The bank doesn’t accept personal funds.

So here is the deal. The rate for 3-years is 4.50%, the rate for 4-years is 4.80%, and the rate for 5-years is 5.05%. The bank requires $100,000. It is FDIC insured. I can’t give out the name on the blog, but the bank is very healthy. They have a 5-star rating on BankRate.com.

If you refer a bank, credit union, or corporate friend to us and they open up a $100,000 CD for one of the above terms, we’ll pay you $150.00. That’s right, we’ll pay you $150.00. If for some reason, they already have a CD with this bank, but they do a future trade with us, we will pay you when the future trade is completed.

I don’t know how long the rate will be good for, but I do know it is good for today.

Our number is 800-234-4605. We can also be reached using our contact page. As you can tell from the number of blog posts of late, I’ve been very busy, but I hate to see people miss out on a great rate.

This offer is good for 12/5/08. We’ll extend it if the bank keeps the rate up.

What Really Happened on Thanksgiving

Caroline Baum publishes an annual column on what really happened with the Pilgrims and Thanksgiving. I invite you to check it out.

Thanksgiving Story Resonates in Year of Crisis

Happy Thanksgiving!!! May you and yours be blessed.

cd :O)

Rates Have Been Coming Down

CD Rates on terms of 2-years or less have been trending down. For about a week after the last rate cut, there wasn’t much movement. However, as it looks like the Fed Funds will remain low for sometime and some have predicted it may even go to 0.5%, the CD Rates have been going down.

A couple of weeks ago we had a 1-year CD rate at 4.40% APY. Today the highest is 4.25%. On the 2-year, we had a 4.50% APY and today it is down to 4.45%. The 3-year and longer rates seem to be holding. The 3-year rate of 5.00% APY remains good as does the 5.25% at 5-years.

As we get closer to the next Fed Meeting, look for rates to come down further. The next meeting is December 16. As it is, the yield curve between the CD Rates and Fed Funds is quite steep.

BankVibe is a new site posting some of the highest CD Rates.

cd :O)

PS — Are you looking for some investment tips. Check-out Smart retirement investing tips for beginners.

Who Can Make the Better Decision

Apparently Fortune Magazine did an article on HENRYs. I have never even heard this term. It means High Earners, Not Righ Yet. One of my favorite bloggers has a good discussion going on. Head on over, check it out, and leave your point of view.

The dicussion centers around who should be making the decision about spreading your wealth. You or the Gov’t. Naturally, I believe I should.

HENRYs, are they getting it all wrong

You may find this Asset protection guide helpful.

cd :O)

Difference Between IRA CD and CD

The biggest difference between an IRA CD and non-IRA CD is the tax consequences. IRAs (Individual Retirement Accounts) can contain a variety of investments, such as mutual funds, bonds, realestate, and of course CDs.

Without going into lots of detail about IRAs themselves, they basically are an investment account that grows tax free. You aren’t taxed until you take funds out. Traditional IRAs are made from pre-tax contributions and you can’t access those funds until you are 59 1/2 or older without paying penalties. There are some exceptions, but I don’t want to spend too much time on that. Roth IRA contributions are made after-tax. The account grows tax free, but you can also being to withdraw fund prior to 59 1/2 without penalty. If you wait until after 59 1/2 you aren’t taxed.

So back to the difference when it comes to CDs. An IRA CD won’t have any tax consequences until you begin to make withdrawals. With a non-IRA CD, you pay regular income taxes on the interest that is earned, regardless of whether you receive it.

For example, let’s say you open a $100,000 IRA CD for 3-years and a non-IRA CD at 5.00% APY. Over 3-years both CDs will grow to about $115,762.00. However, you will only have to pay taxes on the non-IRA CD. If you are over 59 1/2, at the end of 3-years you can take $5000 out and only owe taxes on that amount. The remaining funds can be left in the CD for another term. With the non-IRA CD you pay taxes on the full $15,762.00 (and generally you pay taxes when the interest is earned, so you would pay taxes on about $5250 per year).

An important note, IRAs have yearly contribution limits. You can’t just one day decide to create a $100,000 IRA CD. Those funds would have to have been accumulating over the years. SEP and SIMPLE IRAs (used by self-employeed and small business owners) have a fairly high yearly contribution limit. Traditional and Roth IRAs were $5000 for 2008.

View IRA CD Rates

cd :O)

Fed Cuts Rate by 50 Basis Points

The FOMC cut the Fed Funds rate today by 0.50% (50 Basis Points). That puts Fed Funds at 1.00%. This follows an earlier cut of the same in the beginning of October.

It will be interesting to see how this affects CD rates. The last cut mainly had an effect on the 90-Day and less CD Terms. 1-year and longer CD Rates remained the same. We expect a similar reaction.

The fact is many banks need the liquidity and competition will continue to keep the rates fairly high compared to Fed Funds. 1-year and longer rates may drop about .25%.

cd :O)

10-Day Give

I wanted to feature this in the newsletter, but I honestly don’t know when I’m going to be able to get that done. However, I still want to get the information out there.

In these scary times, sometimes it is helpful to take our eyes off ourselves, and look towards helping others. That is the premise of the 10-Day Give. It was started at a blog that I frequent.

Give it some thought and consider joining. We probably can’t directly affect the current crisis, but we can do small things that can have a ripple effect.

Go to it.

10-Day Give

cd :O)