Interesting, that the local bank where we are placing Frau’s ira cd ladder, has some special problems.
They have some lame offering schedule (i.e., 3, 6, 12, 24, 36, 48, and 60 month terms).
[Obviously my feed back from the last visit fell on deaf ears. What a surprise. I’m shocked! A la Casablanca. A bank not listening. Maybe that’s my next career opportunity.]
Note: there is no 9 month offering. And the underlying interest rate is flat between 24 and 36.
Then, they have 9, 11, 13, and other “special offerings”.
So, it is very interesting to construct, or fill in, a ladder.
So I was king, or at least running the bank, and you came in and asked for a ladder. I’d ask you what would make you happy. You want the 4 quarters over 5 years to all have an equal amount. POOF! That’s what I would offer. If you wanted them to all come due on the 13th of the month. Poof! That’s what I’d do. If you wanted them printed on pink paper. poof! (yeah it gets old!) That’s what I’d do.
I’d also rationalize my rates to give every longer duration a time premium preference. That’s no two time periods alike. (Hey, they are making big bucks off cds.) And, I’d offer automagic roll over. You just give me your money and I’ll take care of everything for you. AND, I’ll give you the best interest rate I can afford to pay.
And, if your account goes over the FDIC insurance cap, I’ll set up the overflow with my competitor down the street.
You just come to me and all your concerns will be addressed.
Reinke Faces Life 