U.S. 2-year Treasury note at 4.5% - would you buy or look for CD?

[patricia1990]

I am trying to make a decision. I just read that the Fed is going to slow interest rate hikes.

 

[resjudicata]

@patricia1990 Will you find a 2 yr CD paying as much? Also don't forget that the 2 yr is free of state income and local taxes so it's real rate is a little higher.

 

[patricia1990]

@resjudicata good point about the tax, thank you

 

[nehemiah4ahaya]

@resjudicata CD yes. i just dumped into a 5% cd for 22 months with an upgrade after 9 months to dump in another 50% of many aind incrase it ti 5.25%

I have another lump of money in a 7 months 5% CD so its ready to go into the 22months one when it opens up for adding in more

Taxes are a very good point, luckily for me no state income tax here so its come outs the same

 

[melissa517]

@nehemiah4ahaya Which bank?

 

[nehemiah4ahaya]

@melissa517 Skyone federal credit unions for the 22th month

Andrews federal credit union for the 7th month

 

[universalist]

@nehemiah4ahaya What are the FOMs to join those CUs?

 

[bobbiep]

@patricia1990 Slow doesn’t mean stop. Don’t lock yourself in for that long.

 

[whoflung]

@patricia1990 I can get a two-year brokered CD for 4.9% right now, and I have no state or local income tax, so I wouldn't get the T-note, personally.

 

[lovinjesus4ever]

@patricia1990 You can get a 1yr treasury around the same - that's what I would do

 

[kgerard]

@patricia1990 You might also consider a shorter term T Bill; a one year T Bill is yielding more than 4.5% for shorter time period.

 

[johnakamark]

@patricia1990 Get an I-bond for 6.89% and redeem in a year (you lose 3 months interest if held less than five). No, I wouldn’t get a 2 year bond over an Ibond for savings, at best you’re hoping that a reduction in interest rate will cause bond price to rise so you can make a quick penny, but that’s not personal finance, it’s betting on the bond market.

 

[robineccles]

@patricia1990 I have no state income tax in my state so I often opt for a CD if I can find one that pays monthly. That being said many CDs are callable so if you want to lock in that yield until maturity then a treasury may be more suitable. I'm just glad we have choices in fixed income now.

 

[momof4js]

@patricia1990 Build a CD ladder…will get close to that rate and is more liquid

 

[lina_jejushop]

@patricia1990 BIL is an ETF that tracks short term treasuries if you don’t want the commitment of a 2 year note. I don’t think it’s paying quite the same rate though so it’s less yield for the convenience.

 

[stevenj]

@patricia1990 There’s essentially no difference so which ever has the higher rate for the term

 

[anisa]

@patricia1990 Another drawback of CDs is many are callable. I would never consider those.