CD Rates & Treasury Auction Update

July 11, 2023

The U.S. Treasury has a number of auctions scheduled over the next several days. Below is a table of the upcoming auctions for Bills, Notes, Bonds, and TIPS.

Treasury Inflation-Protected Securities (TIPS) real yields have moved higher this year. Five-year TIPS have a real yield of 2.1% and ten-year TIPS have a real yield of 1.75%. We view both of these maturities as attractive for purchase. You can read this summary that explains how TIPS provide you with inflation protection. Treasury auctions can be purchased directly using TreasuryDirect.gov or at most major brokerages.

Treasury yields continue to look attractive to us compared to CD rates, especially when you consider that treasuries are exempt from state and local income taxes. Conservative investors can build a laddered portfolio of treasuries with maturities ranging from 1-month to 2-years generating a total portfolio yield around 5.5%. Additionally, investors can earn 5.04% on their cash reserves in the Vanguard Federal Money Market Fund (Symbol: VMFXX). Short-term Treasury and CD rates are likely to move higher if the Fed follows through on its projection for at least two more rate hikes between now and December. For now, FedWatch is pricing in one more rate hike this year.

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U.S. TREASURY YIELD CURVE — July 11th 2023

The UST yield curve remains deeply inverted with 10-year yields 1.50% lower than 3-month T-bills.

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Below are some of the highest CD rates (annual percentage yield - APY) available nationwide, sorted by maturities from three months to five years. You can click here to check if a bank is FDIC insured. In addition, you can click on the institution name in the CD list below to go directly to the bank’s website for more information regarding CD purchase minimums, etc. We always recommend individual CD purchases are limited to within the $250,000 FDIC insurance limit.

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3-months:

• TotalDirectBank 5.16%

• WaFd Bank 5.00%

• UmbrellaBank 4.75%

6-months:

• TotalDirectBank 5.36%

• Popular Direct 5.30%

• Bank5 Connect 5.30%

12-months:

• Santander 5.50%

• First Internet Bank 5.48%

• Popular Direct 5.35%

18-months:

• First Internet Bank 5.07%

• Popular Direct 5.05%

• Sallie Mae Bank 5.00%

2-years:

• First Internet Bank 4.85%

• Merrick Bank 4.80%

• PopularDirect 4.75%

3-years:

• PopularDirect 4.75%

• First Internet Bank 4.75%

• First National Bank of America 4.60%

4-years:

• First National Bank of America 4.65%

• First Internet Bank 4.54%

• BMO Alto 4.50%

5-years:

• First National Bank of America 4.65%

• First Internet Bank 4.59%

• PopularDirect 4.55%