Unlike a bank CD, the coupon payments are not reinvested in a brokered CD. There's also not an early withdrawal option, instead you'd have to sell the CD. Since they are not that liquid, I would only buy a CD with the intention and ability to hold to maturity.
Thank you! I wish I had realized this before I transferred the money over, though the credit unions with comparable rates seem to have pretty negative reviews / involve a lot of hassle. I guess I have a 4.25% add on CD that I can transfer the coupon payments into if rates continue falling over the next 5 years.
1. coupons are paid as cash into your account. You have to manually reinvest them, and you will get whatever interest rate is available for the maturity and instrument you choose.
Thanks! I actually found a slightly better standard one - would there be a downside to picking it over the new issue? (Sorry if it's a basic question, this is my first time exploring the secondary market).Note that you can see ask prices with lower minimum quantity by clicking on "depth of book".
The one you show is a STRIP. I believe those are somewhat less liquid than regular treasuries. You can compare the bid/ask spreads to see. This only really matters if you might want to sell before maturity.
Statistics: Posted by taxck33 — Fri May 24, 2024 6:33 pm — Replies 13 — Views 1263