CD Interest After Acceptance

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sport
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CD Interest After Acceptance

Post by sport »

I recently bought a 2 year brokered CD at 2.90% at Vanguard with a maturity of 6/03/24. The money has left my settlement fund. However, if I understand correctly, the CD does not start to earn interest until 6/03/22. Does this mean the bank has my money for about 2 weeks without paying me any interest for that time? When I bought the CD, the confirmation stated the money would leave my settlement fund on 6/01/22, however, they did the transaction sooner. It seems that if they are not going to pay interest until the advertised settlement date, they should not be able to take the money until that time. Have I been cheated?
Gill
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Re: CD Interest After Acceptance

Post by Gill »

I don’t think you’ve been cheated but it appears you didn’t understand the terms of the security you purchased.
Gill
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sport
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Re: CD Interest After Acceptance

Post by sport »

Well, the web site said the money would leave the settlement fund on 6/1. However, it is already gone and I am not earning any interest on it. No interest at Vanguard and none from the bank. How can that be correct?
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TheTimeLord
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Re: CD Interest After Acceptance

Post by TheTimeLord »

I know the way this works at Fidelity is you haven't bought anything, you have put in an order to purchase the CD on 6/3. As I understand it, the money is still yours until the order executes but it is unavailable for trades since it is already committed to the CD purchase. Check your order status.
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sport
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Re: CD Interest After Acceptance

Post by sport »

TheTimeLord wrote: Fri May 20, 2022 8:11 pm I know the way this works at Fidelity is you haven't bought anything, you have put in an order to purchase the CD on 6/3. As I understand it, the money is still yours until the order executes but it is unavailable for trades since it is already committed to the CD purchase. Check your order status.
It works the same way at Vanguard. However, they executed the order earlier than they said they would.
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TheTimeLord
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Re: CD Interest After Acceptance

Post by TheTimeLord »

sport wrote: Fri May 20, 2022 8:54 pm
TheTimeLord wrote: Fri May 20, 2022 8:11 pm I know the way this works at Fidelity is you haven't bought anything, you have put in an order to purchase the CD on 6/3. As I understand it, the money is still yours until the order executes but it is unavailable for trades since it is already committed to the CD purchase. Check your order status.
It works the same way at Vanguard. However, they executed the order earlier than they said they would.
What I was suggesting is you might possibly be looking at your balance available for trade instead of the actual cash balance.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]
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sport
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Re: CD Interest After Acceptance

Post by sport »

TheTimeLord wrote: Fri May 20, 2022 9:16 pm
sport wrote: Fri May 20, 2022 8:54 pm
TheTimeLord wrote: Fri May 20, 2022 8:11 pm I know the way this works at Fidelity is you haven't bought anything, you have put in an order to purchase the CD on 6/3. As I understand it, the money is still yours until the order executes but it is unavailable for trades since it is already committed to the CD purchase. Check your order status.
It works the same way at Vanguard. However, they executed the order earlier than they said they would.
What I was suggesting is you might possibly be looking at your balance available for trade instead of the actual cash balance.
Nope. The settlement fund shows a very small balance. My total account balance has been reduced (temporarily) by the amount of the CD because they have not yet set a value on the CD.
lstone19
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Re: CD Interest After Acceptance

Post by lstone19 »

sport wrote: Fri May 20, 2022 10:02 pm
TheTimeLord wrote: Fri May 20, 2022 9:16 pm
sport wrote: Fri May 20, 2022 8:54 pm
TheTimeLord wrote: Fri May 20, 2022 8:11 pm I know the way this works at Fidelity is you haven't bought anything, you have put in an order to purchase the CD on 6/3. As I understand it, the money is still yours until the order executes but it is unavailable for trades since it is already committed to the CD purchase. Check your order status.
It works the same way at Vanguard. However, they executed the order earlier than they said they would.
What I was suggesting is you might possibly be looking at your balance available for trade instead of the actual cash balance.
Nope. The settlement fund shows a very small balance. My total account balance has been reduced (temporarily) by the amount of the CD because they have not yet set a value on the CD.
Might just be the way Vanguard shows it as the whole concept of settlement periods is confusing to many investors. When I've bought new-issue CDs or auction Treasuries at Fidelity (which execute a few days before they settle), my trading balance is reduced but it still shows in the settlement fund. Right now, I have an executed order for $X T-Bills that executed Thursday but does not settle until Tuesday. The $X is still in the settlement fund, Positions also shows the T-Bills, and it shows Pending Activity of minus $X.
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HueyLD
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Re: CD Interest After Acceptance

Post by HueyLD »

sport wrote: Fri May 20, 2022 5:33 pm I recently bought a 2 year brokered CD at 2.90% at Vanguard with a maturity of 6/03/24. The money has left my settlement fund. However, if I understand correctly, the CD does not start to earn interest until 6/03/22. Does this mean the bank has my money for about 2 weeks without paying me any interest for that time? When I bought the CD, the confirmation stated the money would leave my settlement fund on 6/01/22, however, they did the transaction sooner. It seems that if they are not going to pay interest until the advertised settlement date, they should not be able to take the money until that time. Have I been cheated?
I think it may be a good idea to call Vanguard, the source.
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