People are afraid to commit to CDs — but the time to lock in high interest rates is running out

by | Jan 19, 2024 | Stock Market

Financial adviser Jeremy Keil has become an expert in chasing yield over the past two years – first Series I bonds, then Treasury bills and other fixed-income products. In the past year, he proudly got his clients to move more than $10 million in cash from big banks where it was earning practically nothing and helped them make more than $400,000 in extra interest income. 

But now, with all economic indicators pointing to a looming drop in interest rates, they are dragging their feet about locking into long-term rates at 5%. Some are still hoping to get even higher rates down the road. Some don’t want to move out of high-yield savings accounts or money-markets accounts that are finally earning good interest, even though those will be among the first rates to drop if interest rates turn downward.  “I can’t get anyone to lock in rates at 2 or 3 or 4 years,” says Keil, who is based in Milwaukee. His argument is that 5% is a good rate that we haven’t seen in years, and the bond market is indicating that it’ll be lower in six months or so. “The bond market is smarter than you and me,” he says.  Investors often miss the best …

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[mwai_chat context=”Let’s have a discussion about this article:nnFinancial adviser Jeremy Keil has become an expert in chasing yield over the past two years – first Series I bonds, then Treasury bills and other fixed-income products. In the past year, he proudly got his clients to move more than $10 million in cash from big banks where it was earning practically nothing and helped them make more than $400,000 in extra interest income. 

But now, with all economic indicators pointing to a looming drop in interest rates, they are dragging their feet about locking into long-term rates at 5%. Some are still hoping to get even higher rates down the road. Some don’t want to move out of high-yield savings accounts or money-markets accounts that are finally earning good interest, even though those will be among the first rates to drop if interest rates turn downward.  “I can’t get anyone to lock in rates at 2 or 3 or 4 years,” says Keil, who is based in Milwaukee. His argument is that 5% is a good rate that we haven’t seen in years, and the bond market is indicating that it’ll be lower in six months or so. “The bond market is smarter than you and me,” he says.  Investors often miss the best …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]

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