Tuesday, January 24, 2023
In an earlier post, I discuss the fact I was shopping for a new certificate of deposit (CD).
I wanted a 5 year CD and noticed at the time, two of my banks Synchrony and American Express were both offering the term lengths I wanted at 4.30% and 4.25% respectively.
Since then, I have been waiting for those rates to go up. In mid December (2022) just after I posted the entry, the Fed raised interest rates by 50 basis points, however my banks held at the yield rates previously offered.
I thought maybe by the first of January my banks would offer new rates. No, both held with the same rates. Today is the 24th of January and to date- all the reports I have received, suggest at the end of the month the Fed will again raise interest rates by 25 basis points.
Though I am not counting on rate increases from either bank for the 5 year CD- by the first of February, I am hoping. That explained, in recent weeks I have moved/transferred funds from other accounts to be ready to open the new CD on the first of next month.
Note from the above illustration, I decided to use American Express rather than Synchrony which currently has a lower yield rate than the other bank. Why? I already have two 5 year CDs with Synchrony, with each having more capital than the funding amount (~$15,000) of the new CD.
Not counting the new JP Morgan Chase Visa, American Express is my most recent bank and used for high yield savings. I opened the HYSA account with AmEx on February 2, 2022 with an initial deposit of $2500.
Mint recommended the savings account with American Express and my research indicates their rates are very competitive in several areas. I really did not want to transfer funds from AmEx to fund a CD someplace else. In my case, though I have several banks, only Synchrony offered a competitive rate on the 5 year CD to that being offered by AmEx.