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I'm trying to understand CDs by comparing the two:

NAME CLOSING PRICE CLOSING YIELD CURRENT BID YIELD CURRENT BID PRICE CURRENT ASK YIELD CURRENT ASK PRICE
Mountain Commerce Bank 99.68 5.694% 99.3400 5.152% 99.7180
Goldman Sachs Bank 97.56 5.525% 97.3690 5.169% 97.6830

I'm unsure which of those two examples would be a "better" deal and why? Which columns are more important than others?

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    One thing that is missing from the table is the date the CD matures. May 29, 2023 at 12:29
  • Let's assume they both mature at the same time, in a year?
    – Danijel
    May 29, 2023 at 15:07
  • Your data isn't good. The ask bid and ask fields are reversed, though that's irrelevant since I assume that you're a buyer. There's no Ask Yield nor is there a maturity date. If these are secondary issues, is there a commission and/or accrued interest? Or are these actual prices? Generally, the lowest cost is the best but any answer would be a guess. May 29, 2023 at 20:11
  • Data isn't good? The data is the main trade screen from IB brokers - they picked it!
    – Danijel
    May 30, 2023 at 11:40
  • Price should be ~100, yield is in percentage, so your price and yield are reversed on the bid/ask.
    – D Stanley
    May 30, 2023 at 13:34

1 Answer 1

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All else (maturity, risk of default) being equal, the CD with the highest yield would give you the highest return from an investment standpoint (there can be very subtle differences in terms of interest rate risk, but if you hold them to maturity those risks go away). Since the CDs have very different prices, I'm assuming that they pay different interest rates (which you don't show). It's not obvious which is better when comparing CDs of different interest rates and prices, which is why they also publish yield.

Note that bid is only relevant when you are selling and ask is relevant when you're buying, so if you're looking at buying a CD the "Ask Yield" would be the most relevant figure to use (closing is irrelevant for trading since you can't assume that you can buy at the same price that it closed at).

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