YIELD SHOPPER - OCTOBER 2026

John Robinson |
Categories
Bond Investing
Bond Yields
There is much to unpack in this issue of Yield Shopper.  First, and foremost, to borrow a refrain from "The Notorious" Conor McGregor, "I would like to take this time to apologize to ... absolutely no one," for keeping so much client money in money market funds at the beginning of this year. 
 
As I explained at the time, stashing the proceeds from maturing bonds and CDs in money market funds was not out of attraction to the 3.5% yields.  Instead, money market funds served as a placeholder so that funds would be available to invest when CD and treasuries when rates moved higher. It was worth the wait. 
 
 With CDs now ranging between 4.5% for 1-year and 5.05% at 5 years, rates are nearly back to the November 2022 peak. I am now comfortable laddering maturities out as long as five years, though I would still like to weight the ladders on the shorter maturities because I believe rates may continue to march higher... perhaps much higher.
 
As you can see in the table below, I have highlighted current yields on CDs and Treausry Zeros. With respect to the yields on treasuries, compare them to the yields at online banks featured on Bankrate.com and Nerd Wallet.  Clients some times ask if the rates that are available at Schwab (or Fidelity and Vanguard) are competitive with the highest rates advertised by online banks.  Not only are the yields generally competitive, sometimes they are even higher.
 
As for treasury Zeros, pleas read my latest article, "Laddering with Treasury STRIPS"
 

Source:  Charles Schwab fixed income trading desk. 10/2/2026

*The Taxable Equivalent Municipal AAA Yield is calculated from the Municipal AAA Yield, and assumes a 35% federal tax rate. This does not reflect the effects of any state or local taxes, which, if applicable, may increase the taxable equivalent yield. For questions about calculating your individual rate, see your tax advisor. The following formula is used: Taxable Equivalent Municipal Yield = (Municipal AAA Yield) / (1.00 - 0.35).

In reviewing the yields in the table above, investors should keep in mind that the interest paid on treasury securities and certain government agencies (e.g. Federal Home Loan Bank , Federal Farm Credit Bank, and Tennessee Valley Authority) is exempt from state income tax.  Interest from most (but not all) municipal bonds is exempt from federal income tax. Federally tax exempt municipal bonds issued within your residence state (or issued by U.S. territories such as Guam and Puerto Rico) are generally exempt from state income tax as well. Interest paid Certificates of Deposit, Corporate Bonds, and annuity contracts is subject to federal and state income tax. In comparing yields between these securities it may be necessary to calculate the tax-equivalent yield. 

Taxable Equivalent Yield Calculator (Source: Fidelity)

All yields below are reported as to 10/2/2026

Money Market Funds

Fund Name & Symbol

7-Day Yield

Link to Fact Sheet & Prospectus

Schwab Prime Money Market Fund (SWVXX)

3.71%%

Fact Sheet & Prospectus

Schwab U.S. Treasury  Money Fund (SNSXX)

3.52%

Fact Sheet & Prospectus

Schwab U.S. Treasury Money Fund (Ultra Shares) SUTXX

3.67%

Fact Sheet & Prospectus

Fidelity Prime Money Market Fund (SPRXX)

3.56%

Fact Sheet & Prospectus

Fidelity Treasury Only Money Fund (FDLXX)

3.48%

Fact Sheet & Prospectus

Vanguard Cash Reserves Fed MMF (VMRXX)

3.80%

Fact Sheet & Prospectus

Vanguard Treasury Money Fund (VUSXX)

3.80%

Fact Sheet & Prospectus

Cash & Cash-Like ETFs

Issuer

APY

Link to Fact Sheet & Prospectus

Vanguard  0-3 Month T-Bill ETF (VBIL)

3.63%

Fact Sheet & Prospectus

iShares 0-3 Month Treasury ETF (SGOV)

3.69%

Fact Sheet & Prospectus

SPDR 1-3 Month T-Bill  ETF (BIL)

4.01%

Fact Sheet and Prospectus

Schwab Short Term U.S. Treas ETF (SCHO)

4.64%

Fact Sheet and Prospectus

High Yield Savings Account Rates (Source: Bankrate.com and NerdWallet.com)

Bank

APY

CIT Bank

4.25%

Happen Bank

4.20%

VIO Bank 

4.01%

Bread Financial

4.00%

Sample Online Bank CD Rates (Source: Bankrate.com)

Bank

6 month

12 month

2 Year

5 year

E*Trade

4.20%

 

 

 

E*Trade

 

4.40%

 

 

Happen Bank

 

 

4.40%

 

Synchrony Bank

 

 

 

4.50%

 

Readers of my commentary know that I do not ever recommend bond mutual funds or ETFs (aside from money market ETFs).  I have written many articles on this topic, which are included below.  This position is also shared by retirement researcher and financial  planning industry thought leader Wade Pfau, PhD, CFA.  Links to Wade’s commentary on this topic are as follows

3 Ways to Incorporate Bonds Into Your Retirement Strategy (Retirement Researcher)

Why Bond Funds Don’t Belong in Retirement Portfolios (Wade Pfau, Advisor Perspectives)

Laddering with Individual Bonds (Retirement Researcher)

 

JOHN ROBINSON’S RUNNING COMMENTARY ON FIXED INCOME INVESTMENTS FROM THE FPH BLOG

Laddering with Treasury STRIPS (10/2/2026)

How Not to Invest in Bonds (8/31/2026)

Short-Term Laddered Bond ETFs vs. Short Term Bond Funds (9/25/2025)

Cash ETFs:  The New “New Thing” in the Search for Yield and Safety? (9/25/2025)

Government Money Market Funds Are Not All The Same (2/9/2025)

Why I Always Say “Friends Don’t Let Friends Buy Bond Funds (4/1/2025)

Not So Hot TIPS (11/1/2024)

Keeping Score – A Running Record of My Interest Rate and Fixed Income Guidance Since 2020 (6/5/2024)

Where to Fish for the Best Fixed Income Yields Today (3/4/2024)

Interest Rates on CDs Plummeted in November. How to Invest Now (12/3/2023)

How to Invest When the Yield Curve is Inverted (9/8/2023)

It's Time to Start Laddering Certificates of Deposit Again (5/21/2023)

Is Your Cash Working as Hard as it Should Be? 2/16/2023

How to Invest in Bonds and CDs Now that Interest Rates Have Risen 12/10/2022

Where to Stash Cash Now 9/29/2022

I was Right About Interest Rates 9/29/2022

The Time to Buy Series I Savings Bonds is NOW! 4/18/2022

Why Friends Don’t Let Friends Buy Bond Funds (3/1/2022)

Saying that the Bull Market in Bonds is Over is NOT Market Timing 12/10/2021

Negative Returns Ain’t Much of a Living (8/9/2021)

Looking for Yield in All the Wrong Places (5/25/2021)

 

John H. Robinson is the founder of Financial Planning Hawaii and Fee-Only Planning Hawaii and a co-founder of retirement simulation software, Nest Egg Guru.

Financial Planning Hawaii is an SEC-Registered Investment Adviser (RIA).  Registration as an investment adviser does not imply any level of skill or training. For verification of Financial Planning Hawaii's regulatory status, all website visitors are encouraged to visit the SEC Investor Advisor Public Disclosure website.  The site allows you to search by firm name and by adviser name. It provides detailed information about the firm's business model and each investment adviser representative's professional experience, educational background, and disclosure history.

Financial Planning Hawaii's 2026 SEC Form ADV  |   Financial Planning Hawaii's 2026 Customer Relationship Summary