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Originally Posted by TwistedChief
Curious. What rate are you getting on those bank CDs? And how does that compare with US Treasury yields?
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I started doing my CD laddering at around 4.8 percent. The last one I bought was 5.4 percent for a 2-year CD. I'm not famiilar with the banks offering them, but the brokerage is saying that they're FDIC-insured. See the first photo below toward the right side. This is a search that I just did for 2-year CDs.
I keep looking at Treasuries, but I don't know enough about them. The second photo is what I see when I do a search. I used 2-year Treasuries to be consistent across both pictures.
I don't understand what the variables are. I tried looking them up, and the key to me seemed like the "Yield to Worst", which was explained as the worst-case scenario yield. But that implies that there are situations where I can do better than that. And the Coupon seems important because I read that that's the nominal rate, but they're all over the board and I don't know what that means. Why would I be expecting a 4.679+ return off of a bond that has a 1.125 percent nominal rate? I'm sure I'm misunderstanding something.
What I see is that the CD rates are higher and I understand them, so that's what I've been buying. Can you explain why Treasuries should be considered when looking at the two pictures below? Thanks in advance.