As you all know, I'm a big fan of ING Direct. Before I get into details, I'll point out to everyone that they just bumped their savings rate up from 4.00% to 4.15% today, so..."Yay!" My fandom notwithstanding, they sure have a way of cheesing me off with their CD rates.
Since it's been obvious for over a year now that the Fed was going to keep raising rates, it's been rather counter-productive to put money into any long-term CDs until one is reasonably certain that we've reached the peak of the rate-raising spree. And now, all of the signs seem to indicate that we're close to that end.
Back on April 14, ING bumped the rates on all CDs over 1 year duration up to 5.00%. However, yesterday, they apparently bumped everything over a 2 year down to 4.75%. (They did push the 12 month rate up to 5.25%, so I just dropped some money into one of those.) I get the impression that the CD-rate-setting department periodically goes out and gets loaded, and sets the rates at giddy highs, then realizes what they did a few days later and fixes things.
The conventional wisdom suggests that the Fed will raise rates another quarter point in May and then hold tight after that. Presumably, ING will bring the long-term CDs up to 5.00% at that point. I was hoping the end result would be an over 5% 5-year CD, which would be pretty freaking compelling. Hell, a guaranteed, FDIC-insured, "your account will NOT lose value" 5+% return is hard not to love.
And frankly, a straight 5% under those conditions ain't too bad, either. But still....grrr.
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