Question about CDs

1,502 Views | 7 Replies | Last: 2 yr ago by Baby Billy
LMCane
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1:28p, 8/28/23
CD GOLDMAN SACHS BK USA
As of 08/28/2023 02:08 PM ET

BID PRICE
99.547

YIELD TO WORST
5.839%

MATURITY DATE
1/26/2024

COUPON
4.800%

Yield to maturity
5.84%
Yield to call

does this mean that on January 26 I will get back the entire investment plus 4.8% interest...

or up to 5.84% interest?


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permabull
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1:57p, 8/28/23
AG
You will earn 4.8% and the rest is made up by the fact you are buying the CD for under face value but it will mature at full value which is how they come up with the 5.8%
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OldArmyCT
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4:27p, 8/28/23
AG
You will earn 4.85% for the rest of the year, not 4.85% on a year. Plus I think CD's are paid on 30 day months, not daily. So my Aggie math tells me you'll get about $1616 on a $100K CD in addition to the full $100k when it matures. But GS should have. calculator that discloses all of that.
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permabull
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In reply to OldArmyCT • 5:02p, 8/28/23
AG
And the 100k in CDs would cost 99.547k so you would make an additional $453 on top of the 5 months of interest.
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LMCane
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11:44a, 8/29/23
great- thanks!

I think the best strategy is to keep buying on the front end of the yield curve for CD and Treasuries.

keep rolling them over every 6 months.
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LMCane
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In reply to permabull • 11:44a, 8/29/23
permabull said:
And the 100k in CDs would cost 99.547k so you would make an additional $453 on top of the 5 months of interest.
just a clarification-

I already purchased these back in the spring.
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TexAggie5432
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1:00p, 8/29/23
You can buy CDs and bonds at a discount or a premium. That had to be factored in along with the coupon to determine your overall yield. That's what the yield to worst or yield to maturity shows.
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Baby Billy
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2:35p, 8/29/23
AG
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