Any good advice on CDs?

First: unfortunately this migration and fixed income market weren’t a good timing for me. I’m relatively new to this board. I have been parking some money in short term (3-12 month CDs) and I don’t know municipals vs treasuries vs CDs as well as I’d like. I know some are tax advantages, but I’m just looking to beat bank interest rates.

If anyone can provide advice, a link to a topic in the new boards, or a link to a topic in the old boards, it would be appreciated.

Second, to Discourse: the “this topic maybe be similar to…” results are just atrocious. if it is feature flagged, disable it, it is worse than nothing. I don’t know if the model evolves, but it requires more internal training, don’t make your users deal with that. If you you are going to, at least make it less obtrusive.

Not CD’s many bank preferred’s offer much higher rates compared to CD’s.

Are there any you’d suggest right now?

CDs have the guaranteed return of capital up to the per bank (etc) which is important for how I’m using them, but I’ve noticed some healthy yields in common stocks. I don’t know enough about preferreds, yet.

For parking short term?

Secondary market CDs are available from Fidelity’s bond section at a higher interest rate than the identical CDs at the bank. Why? Who knows?

Fidelity also has short-term secondary market Treasuries, mortgage-backed bonds and TIPS. Many of these bonds have high minimum purchases on the list but if you click on “depth of book” there are often multiple offers of the same bond with slightly lower interest rates but low minimum purchase quantity.

Do not mistake preferred stocks for true fixed income securities. A fixed income security has a specific maturity date which a stock does not.

Bond funds also do not have a specific maturity. The Net Asset Value (NAV) of a bond fund will drop if interest rates rise. So will a bond, but you can hold the bond to maturity and get back full principal so you won’t lose money.

Please read Investopedia to learn about these investments. Please do not invest in any instrument that you don’t fully understand.



Thanks Wendy! I buy new issue CDs via Fidelity, I know exactly where you mean on their site. I had not explored the secondary market, though, I really appreciate that.

I’ve been investing a while, but I stopped self-managing most of it. I know stocks outperform bonds over the long haul, but it’s been tough for me to make sense of current circumstances. My sense is that regrettably there will be a buying opportunity in the equity markets “soon”, but I don’t like getting 0% on cash in the meantime when almost 4% is available on 3 month CDs. Also, it’s been a while since I’ve seen these kind of fixed rates, and thinking maybe I should (or should be ready to ) do some longer term allocation changes. That’s where I really feel the lack of depth of how to allocate a longer term fixed-income position - types of instruments, maturities, rates, et al. :person_shrugging:

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Just adding on Wendy’s, there are small bank CD’s often come at higher interest rates and they have somewhat odd maturity like 7 months or 11 months. Or sometimes small bond issues, like CIti’s 26 maturity is available at 5.5% yield to maturity and if they get called on first call (which I doubt) then you can even get 7.2% because the bond is trading below par. Then you have the usual suspects like GE, GM capital corporations, credit card companies like Amex, discover etc.

Not all AAA are secure, I typically avoid capital corporations, and go with bank’s; For a long time I was able to get slightly higher rates on Indian banks’ and Korean banks. These are for their branches in US, and they dont’ have big branch network in US and often lend to corporates for export/ import. There are many places where you can get slightly higher yield, but everything there is a risk. understand your risk tolerance, and always chose a solid bank over higher yield. Return of capital is far more important than return on the capital.


A “healthy” yield in a common stock can often be wiped out if the stock’s price drops for a day or two…or more.

Never mistake the dividend yield of a stock for the coupon of a bond. Stocks have no maturity and high risk of price fluctuations (far more than the dividend). Bonds have a specific maturity and will return full principal if held to maturity. (Assuming the bond issuer doesn’t default.)



CDs are safest in that they are FDIC insured. Higher yield often means higher risk. Investment grade bonds are reasonably safe. A diversified portfolio spreads the risk.

Some prefered stocks are cumulative. Skipped payments must be made up later.


I agree don’t buy stocks just based on dividend yield. Make sure you have other reasons to buy the stock. OTOH, dividend can keep growing, unlike bond coupon. There are few REIT’s that I have purchased awhile ago, and the effective yield (i.e., on my cost basis) are now 10%+. I bought LOW during 2009 for $19ish, while I have sold it, in one of the accounts of the family member where we never sold, now the effective yield is 20%. So there is no simple and easy answer.

One of the biggest risks of preferred is, when the common goes private, the company can suspend dividend on the preferred and trap the preferred owners, even if they are cumulative. Prefered’s need better investor protection, current language, terms don’t offer sufficient protection.

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I don’t know about Fido, but Schwab pays 3.3% 7-day yield on cash in its sweep money market fund and 3.0% in its sweep Treasury fund.

From my Fidelity Statement dated 10-31-2022

– 7-day yield: 3.08%


I don’t have the minimum for FZDXX ($200K?) but my brother does, as they’ve been funneling cash from dividends into FZDXX for the past couple of years. With about 200K in this MMF, he said they were making a whopping $2 per month when interest rates were close to zero. For Oct that had jumped up $580 and for Nov, he expects it to be around $630. What a difference a few months can make.