Podcast Episode - Keeping Your Money Safe and Sound Right Now

Bankruptcy, CDs, Investing, Saving

March 16, 2023

Listen to Podcast Episode:

On this special episode, Suze outlines the ramifications of three US Banks closing and it’s impact on interest rates.

Podcast Transcript:


Suze: March 16th, 2023. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen. I know you're wondering, but where's KT's voice? Your very special favorite person, isn't she?


Suze: We're not here today with her. And why is that? That is because so much has happened since last Thursday. It's not even funny and I want to talk to you about all the changes that are absolutely taking place that what? That directly affect all of you.


Suze: So let's begin. The very first thing I want to say to all of you is, if you have money in any bank or any credit union and you're within the F D I C or the N C U A for credit union insurance guidelines, you have absolutely nothing to worry about. You are fine and a little bit later, I will once again explain


Suze: how F D I C and N C U A insurance happens to work, just to make sure that you all really, really understand it.


Suze: But what happened with the closure


Suze: of three banks here in the United States as well as Credit Suisse really having trouble overseas.


Suze: Now, the feds are totally confused as to, will they continue to raise interest rates on Wednesday or will they not


Suze: Because interest rates were going up, that was one of the problems of what happened with S V B Silicon Valley Bank, which I explained in last Sunday's podcast. So now the feds are in a very precarious situation.


Suze: Do they continue to raise interest rates which would maybe possibly make other banks have problems or do they continue to fight inflation, because even though the inflation numbers came in a little bit less, they came in hardly anything less in comparison truthfully to just a month or two ago. So are they going to choose to fight inflation and continue to do that


Suze: Or are they going to take a pause here


Suze: and really keep everything safe and sound given what has happened?


Suze: Because everything is so confusing that way, you have seen if you're looking at it, the interest rates on three month, six month, one year and so forth treasuries, absolutely plummet. They have gone down a lot.


Suze: And so therefore just a week ago when you could have gotten over 5.1 or 5.2% on a six-month treasury. Now, all you're getting is like 4.62%.


Suze: On a three month treasury as we speak. You're getting 4.708%. And on a one year treasury, currently, you're getting 4.167% those rates are down significantly.


Suze: So, therefore, the strategy of what we've had in place has also seriously changed.


Suze: If none of this had happened with the banks, then staying short term in our maturities. Three and six month certificates or three and six month treasuries was absolutely the way to go


Suze: because we knew that the feds were going to continue to raise rates. We knew that interest rates on short term things would be going up


Suze: and eventually we would switch to long term.


Suze: Well, we now have to put a pin in that strategy and now I want you to go out a little bit longer term. So to that end, I had a very long talk with Dennis Devine of Alliant Credit Union.


Suze: And because it is really important that all of your money is absolutely safe and sound.


Suze: It has been decided that we will be lowering interest rates, Alliant Credit Union starting today, will be lowering the interest rate on the three month certificate of deposit to 4.50%


Suze: And 4.75% on the six-month certificate of deposit. However,


Suze: because I want you to go out a little longer term right now,


Suze: Alliant Credit Union via Dennis Devine agreed that they would do a one year certificate of deposit for 5%.


Suze: I just want you to think about that for a second. 5% for a one-year certificate of deposit


Suze: vs 4.167% currently right around there for a one year treasury.


Suze: So that is a big deal.


Suze: That's number one, number two,


Suze: I have wanted them and you know, that you weren't able to do this before, I had wanted you to be able to buy short term certificates of deposit within a retirement account as well as if you wanted to long term.


Suze: And I wanted you to be able to have a retirement account that was just for safe money. Not, were you invested in the stock market? Not where you were able to buy anything except safe, safe money, like a certificate of deposit, period.


Suze: Well, now starting today, if you want, you can open up a Roth IRA, you can open up a traditional IRA. You can do an IRA rollover if you want, you can do a Roth IRA rollover if you want.


Suze: And if you want to follow my advice, you could also do the one year certificate of deposit within that retirement account.


Suze: Again, remember for those of you who want your money protected. For those of you who want to know that there is insurance backing your money so that nothing could happen to it.


Suze: Then this is the retirement account that I want you to use period for safe money.


Suze: Now, while it is true, I've been telling all of you


Suze: that if you have C D s that are outside of a retirement account and you live in a high income tax state, you personally, a week ago would have been better off doing treasuries. Within a retirement account.


Suze: it makes no difference whatsoever what state you live in because of the tax structures of retirement accounts, especially Roth retirement accounts, which are absolutely tax free if you just follow the guidelines on it.


Suze: Therefore, for those of you who are out there and you don't want to be partaking in the stock market, which is absolutely horrific. But we said it was going to be horrific.


Suze: We said there really would be no place for you to run or hide


Suze: and it is coming to pass right now. Now, I think it is possible that maybe you'll see it go up next week or two. But as I've said in previous podcasts, I do not think that this is the bottom yet. I told you that I wanted to see certain things happen and they haven't happened yet.


Suze: So let's say that you are out there


Suze: and you have money that's in a retirement account somewhere else. Or you want to open up a retirement account and you just want that money safe and sound.


Suze: And I think you will find it very difficult to beat a one-year certificate of deposit at 5%.


Suze: So I encourage all of you


Suze: that you should really take Alliant Credit Union up on that offer


Suze: Now, just a week or two ago when we came out with the original certificates of deposit at great interest rates. Obviously, that didn't last long. Why? Because of what was happening with banks and interest rates. As of last weekend, many of you were lucky enough to get in to those rates. So you're doing great.


Suze: I don't know how long these rates that I just announced today are going to last because if more banks happen to go into failure, if things happen that way...


Suze: Well, they may have to lower these rates. But if you take advantage of these offers right now, you know, you will be getting 5% for one year.


Suze: Now, one of the reasons that I chose Alliant Credit Union to be my partner for these past three years, for all of you is because I'm able to work with them like this and bring to you what I think you really need.


Suze: And I think we need to alter what we were doing from short term treasuries or short term C D s to now, one year,


Suze: But a one year CD at 5% is very, very difficult to pass up for safe money, especially if you are in a retirement account.


Suze: So if you happen to have retirement accounts, places that are elsewhere


Suze: and you just want it safe and sound


Suze: and you want to know that the institution is safe and sound and I can tell you that Alliant Credit Union is safe and sound,


Suze: then you should absolutely take them up on this offer. Let me be clear. I do not make one penny if you take them up on this offer or not.


Suze: Alliant Credit Union simply sponsors my podcast. What you do with them after that is between you and Alliant Credit Union, but I'm always looking out for you. And so is Dennis Devine the CEO of Alliant Credit Union. So here are your instructions - very simple.


Suze: If you are already a member of Alliant Credit Union,


Suze: and you would like to open up an IRA or a Roth I R A and take advantage of the one year certificate of deposit, for instance, then go to My Alliant dot com and you will see right there all the instructions that you need to know if you want help with it. Remember, we have a helpline just for Women and Money podcast listeners. All of you write this down,


Suze: it's Suze S U Z E help at Alliant Credit Union dot com. So if you're already a member of Alliant Credit Union and you want to, and you should want to take advantage of the one year certificate of deposit at 5% within a retirement account, go there and it will tell you exactly what you need to do


Suze: if you are not a member of Alliant Credit Union and you want to open up a certificate of deposit within an I R A. You also go to My Alliant dot com and follow the directions there. You will open up an account, you will choose what type of retirement account you want. And then what we have done


Suze: is we have made it that you will talk to somebody just to make sure that you are doing exactly what you want to do.


Suze: If you are not a member of Alliant Credit Union or even if you are a member of Alliant Credit Union, and you want to take advantage of the three month, this six month, but hopefully the one year certificate at 5% and you don't want to do a retirement account,


Suze: then you would go to My Alliant A L L I A N T dot com slash Ultimate and then you will do it right there. So there are two different sets of instructions if you want to be part of the retirement plans or if you just want the C D outside of a retirement plan


Suze: Again, you can replay this podcast for those directions and when you go there, you will find exactly what you need, Once again, just so we're clear


Suze: the new interest rates on the three month C D is 4.5% A P Y as of today, March 16th, the six month is 4.75% A P Y and the one year is 5%. I am telling all of you I really think you should go at this point in time for the one year at 5%.


Suze: For those of you who got T bills before or shorter term certificates. You're fine.


Suze: Now we have diversification because nobody knows where interest rates are going to go. But this will cover us at this period of time. I briefly want to touch on NCUA insurance which is for credit unions as well as F D I C insurance, which is for banks. Just so you understand exactly how it works


Suze: when you are in an individual


Suze: and you open up an account and you buy a certificate of deposit, whether it's at a credit union or a bank and you do not list any beneficiaries on it,


Suze: Then you automatically have $250,000 of insurance in both cases.


Suze: If you decide to list a beneficiary who is to get that money if you were to die.


Suze: And you only list one beneficiary,


Suze: You then still only have $250,000 of insurance. If however you list two beneficiaries. Now you have $500,000 of insurance. If you list three beneficiaries, you have $750,000 of insurance and it keeps going up depending on how many beneficiaries you happen to list.


Suze: Obviously, if you open up a retirement account,


Suze: you cannot open up a retirement account in any other name other than your own. An I R A stands for individual retirement account. So you can't own it in joint with somebody else, you can't own it as a business, you can't own it as a trust. So it's your individual retirement account


Suze: And you are insured, let's just say you open up an IRA whether it's a Roth or traditional, traditional means its pretax, with Alliant Credit Union. And you happen to not name a beneficiary. You have up to $250,000 of insurance. You name one beneficiary, you still only have $250,000 of insurance. For every beneficiary you name after that,


Suze: it's 250 for 1, 500 for 2, 750 for 3, 1 million for four and so forth. If you make the trust that you have as the beneficiary of a retirement account or a regular CD account doesn't matter.


Suze: You also have insurance in that same way up to a maximum of five beneficiaries that you have named in your trust. If you have more than five beneficiaries, then you need to talk to your financial institution about that.


Suze: That is how insurance works. Now, obviously, outside of a retirement account,


Suze: I told you how it works as you're an individual. So you could at a bank or credit union have an individual account, your spouse could have an individual account as well,


Suze: and you each would have 250,000 and then $250,000 on every beneficiary. Remember you do not get 250,000 on yourself and another 250,000 on just one beneficiary.


Suze: If you have one beneficiary, it's just on the beneficiaries. Got that everybody? So you each could do that. One could have an individual account, the other could have an individual account. You can open up a joint account and still do that. You could open up a trust account and still do that. There's all different ways to get a whole bunch of insurance


Suze: by different categories. But again, for individual retirement accounts, it's just in your individual name. So you have to know exactly that you've named the right beneficiaries to cover you for the insurance that you want.


Suze: That is a very quick synopsis as to how F D I C insurance for banks, NCUA insurance for credit unions happen to work.


Suze: So if again, you have money within the insurance limits of whether it's a bank or a credit union, you are not to panic, you are not to change anything. You are 100% fine.


Suze: But if you want to take advantage of that 5%, 1 year yield


Suze: on a one year certificate of deposit with Alliant Credit Union inside a retirement account or outside, this is the time to do it because I do not know how long this will last and it takes time for money to transfer, especially if you have money sitting somewhere and now you want to transfer it your IRA to Alliant Credit Union. And I actually suggest you do so if you want to do that, it takes time.


Suze: And there are people that wanted to take advantage of the 5%, for instance, six-month certificate of deposit that were transferring funds from somewhere else. If you're money hasn't already transferred, then you're not going to get to participate in that 5%. For the six month. Your new rate will be 4.75%. So therefore, for those of you who now are still transferring money


Suze: and you wanted the 5% 6 month rate. I am advising all of you when your money transfers do the one year 5% rate. Got that everybody? So please just don't sit on this because again, who knows what's gonna happen? Who knows what the feds are gonna do? Who knows how many other banks may fail


Suze: and anything can happen. But this is our game plan for now.


Suze: Sunday will be Sheila Bair chairman of the FDIC during 2008 when over 400 banks closed, you are going to want to hear what she has to say because again, nope,


Suze: nobody knows better than Sheila Bair. I promise you that. Not even me, believe it or not. You might want to catch me on CNN tomorrow night at six o'clock East coast time. I'm on with Wolf Blitzer. I actually love him and I've been all over the place. My phone has been ringing off the hook with, what do I think? What do I think we should do? These are crazy times. So therefore,


Suze: let's put a little bit of financial peace in our life and put our money somewhere where it's safe, sound and insured at one of the highest interest rates that you can get anywhere. So as you know, I end every podcast


Suze: with KT or without KT by saying the following: today, say it with me today, wherever I go, I will create a more peaceful, let's pray that's true. A more peaceful, joyful and loving world. Now you stay unstoppable.

Take advantage of the Ultimate Certificates with Alliant Credit Union at: bit.ly/3kwMcjR

Get Suze’s special offers for podcast listeners at suzeorman.com/offer

Join Suze’s Women & Money Community for FREE and ASK SUZE your questions which may just end up on her podcast!

To ask Suze a question, download by following one of these links:

CLICK HERE FOR APPLE: https://apple.co/2KcAHbH

CLICK HERE FOR GOOGLE PLAY: https://bit.ly/3curfMI

Suze Orman Blog and Podcast Episodes

Suze Recommends

Suze Orman Blog and Podcast Episodes


Even Big Retirement Savers Are at Risk

Read Now

Suze Orman Blog and Podcast Episodes

Home Ownership

Podcast Episode - Ask KT & Suze Anything: How Do I Choose a Financial Planner?

Read Now

Suze Orman Blog and Podcast Episodes


Your Ultimate Savings Opportunity Starts Now

Read Now