Day: September 2, 2024

(Bloomberg) — Hong Kong’s property downturn is taking a growing toll on New World Development Co., the firm owned by the billionaire Cheng family.

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The company said late on Friday it expects to post a loss of as much as HK$20 billion ($2.6 billion) for the financial year ended in June — its first annual loss in two decades. Its share price plunged 13% on Monday to the lowest level since 1986, when Bloomberg started tracking the data.

New World has been grappling with higher debt levels than its peers — adding pressure on 44-year-old Chief Executive Officer Adrian Cheng, the third generation to oversee the business, to turn things around.

The developer cited asset impairment, losses on investments and higher interest rates for the decline. A revaluation of the group’s investment and development properties including a goodwill assessment will lead to a non-cash loss of HK$8.5 billion to HK$9.5 billion, the company said. Meanwhile, core operating profit is expected to drop as much as 23%.

New World’s 5.25% perpetual dollar bond fell 3.2 cents to 83.6 cents on the dollar Monday, the largest drop in a day since September 2023, according to Bloomberg-compiled prices.

The sizable asset writedowns “could raise its leverage ratio and hurt the developer’s deleveraging plan,” said Patrick Wong, a real estate analyst at Bloomberg Intelligence. “This could also raise investors’ concerns about potential risk of further valuation decline of its investment properties particularly Hong Kong office buildings.”

The company said in an email that the writedown was a proactive move to position the company “for the upcoming interest rate cut cycle where the overall property market is expected to rebound.”

The developer has been under scrutiny in recent years over its high level of borrowings. Net debt to equity was 82.7% as of the end of last year, compared with 41.4% at rival Henderson Land Development Co. and 21.2% at Sun Hung Kai Properties Ltd., according to BI.

New World’s writedown reflects a broader problem among developers. Hong Kong’s residential prices have plummeted to an eight-year low. Office and retail sectors remain weak, reducing rental income and hence the value of developers’ investment properties.

The city’s most prestigious office towers have seen value decline significantly in the past few years. CK Asset Holdings Ltd.’s landmark Cheung Kong Center, for instance, lost one-third of its rental value over the four years ending in 2023.

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The lackluster residential market also limits New World’s potential income from selling apartments. It’s putting pressure on developers to discount their projects in order to lure buyers. New World priced a new project in the middle-class neighborhood of Kai Tak In July at the cheapest level for the district since 2016.

New World’s situation is “severe” and the company needs to sell assets, according to Sam Wong, an equity analyst at Jefferies LLC. “They also have to consider whether they have to be more realistic” in terms of pricing, he added.

Despite the headwinds, Cheng has been ramping up efforts to improve the firm’s financial situation. The company recently completed more than HK$16 billion in loan arrangements and debt repayments in July and August, including early refinancing of some loans due in 2025. The company said in the email that it has completed more than HK$50 billion of debt arrangements and repayments this year.

New World is also offloading lower-tier assets to raise cash, and said in February it was planning to dispose HK$8 billion of non-core assets for the fiscal year ended in June 2024.

New World’s profit warning coincided with executive appointments on the same night at the Chengs’ private investment vehicle, putting the family’s succession plan back into the spotlight. The clan announced that one of Adrian’s brothers had been appointed as co-CEO at Chow Tai Fook Enterprises Ltd., taking charge of the North Asia region for the family’s deep-pocketed investment firm. That means four of the siblings now each effectively controls a key part of the family business.

–With assistance from Shirley Zhao, Lorretta Chen and Shikhar Balwani.

(Updates with share, bond price change and an analyst quote.)

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©2024 Bloomberg L.P.

Today’s savings account interest rates are some of the highest we’ve seen in more than a decade due to several rate hikes by the Federal Reserve. Even so, savings interest rates vary widely by bank, so it’s important to be sure you’re getting the best rate possible when shopping around for a savings account. The following is a breakdown of savings interest rates today and where to find the best offers.

Overview of savings interest rates today

The national average savings account rate stands at 0.46%, according to the FDIC. This might not seem like much, but consider that just two years ago, it was just 0.07%, reflecting a sharp rise in a short period of time.

This is largely due to monetary policy decisions by the Fed, which began raising its benchmark rate in March 2022 to combat skyrocketing inflation. Since then, the Fed increased rates 11 times, though it paused further rate hikes in 2024. Experts believe the Fed will eventually begin to lower its target rate in September, which means deposit account rates, including savings interest rates, will likely begin to fall.

Although the national average savings interest rate is fairly low compared to other types of accounts (such as CDs) and investments, the best savings rates on the market today are much higher. In fact, some of the top accounts are currently offering upwards of 5% APY.

Poppy Bank, for instance, is currently offering the highest savings account rate today at 5.50% APY for its Premier Online savings account. The minimum opening deposit is $1,000 and this rate is guaranteed for three months.

Betterment also offers an account with 5.50% APY. However, this is a cash management account for brokerage customers and not a traditional savings account. There is no minimum opening deposit required.

Since these rates may not be around much longer, consider opening a high-yield savings account now to take advantage of today’s high rates.

Here is a look at some of the best savings rates available today from our verified partners:

Related: 10 best high-yield savings accounts today>>

How much interest can I earn with a savings account?

The amount of interest you can earn from a savings account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (savings account interest typically compounds daily).

Say you put $1,000 in a savings account at the average interest rate of 0.45% with daily compounding. At the end of one year, your balance would grow to $1,004.51 — your initial $1,000 deposit, plus just $4.51 in interest.

Now let’s say you choose a high-yield savings account that offers 5% APY instead. In this case, your balance would grow to $1,051.27 over the same period, which includes $51.27 in interest.

The more you deposit in a savings account, the more you stand to earn. If we took our same example of a high-yield savings account at 5% APY, but deposit $10,000, your total balance after one year would be $10,512.67, meaning you’d earn $512.67 in interest. ​​

Read more: What is a good savings account rate?

(Bloomberg) — Global equities began September on the back foot as investors prepared for what’s typically considered the most challenging month for stocks.

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Europe’s Stoxx 600 fell 0.2% from Friday’s record high, with the automotive and consumer goods sectors particularly affected. This downturn followed data showing a fourth consecutive month of contraction in Chinese manufacturing activity, alongside a deepening slump in the country’s residential property market.

Similarly, mining giants such as Rio Tinto Plc and BHP Group Ltd. saw declines after iron ore prices dropped. In London, Rightmove Plc surged more than 20% after Rupert Murdoch’s REA Group Ltd. said it’s exploring a possible cash and share offer.

US equity futures softened after the S&P 500 came close to an all-time high on Friday. The dollar was steady, while cash Treasuries were closed for the US Labor Day holiday.

September has been a notably poor month for stocks over the past four years, while the dollar typically outperforms, according to data compiled by Bloomberg. Wall Street’s fear gauge – the Cboe Volatility Index, or VIX – has risen each September since 2021.

The trend may continue, especially with the upcoming US jobs report on Friday, serving as a guide to how quick, or slow, the Federal Reserve will cut rates and as the US election campaign gets into full swing. Traders are pricing the US easing cycle will begin this month, with a roughly one-in-four chance of a 50 basis-point cut, according to data compiled by Bloomberg.

“I think the market is pretty well versed with what it thinks is going to happen — there will be some kind of cut,” Fiona Boal, global head of equities at S&P Dow Jones Indices, told Bloomberg Television. “As we move through autumn, we will see the VIX move more to thinking about the markets, thinking about political issues.”

Two days before Friday’s report, the government will issue figures on July job vacancies. The number of open positions, a measure of labor demand, is seen easing to a three-month low of 8.1 million — just above a more than three-year low.

The equity-market rally may stall even if the Federal Reserve starts its rate-cutting cycle, according to JPMorgan Chase & Co. strategists.

Any policy easing would be in response to slowing growth, while the seasonal trend for September would be another impediment, the team led by Mislav Matejka wrote in a note.

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“We are not out of the woods yet,” Matejka said, reiterating his preference for defensive sectors against the backdrop of a pullback in bond yields. “Sentiment and positioning indicators look far from attractive, political and geopolitical uncertainty is elevated, and seasonals are more challenging.”

Elsewhere, German Chancellor Olaf Scholz’s ruling coalition was punished in two regional elections on Sunday, with the far right clinching its first triumph in a state ballot since World War II. Still, political parties moved to block the Alternative for Germany from power in the eastern states of Thuringia and Saxony.

China Woes

In Asian markets, multiple rounds of stimulus have failed to revive growth in China, where a prolonged property market slump is curbing domestic demand in the world’s second-largest economy.

“I think there’s a huge problem — by now everybody recognizes that,” Hao Ong, chief economist at Grow Investment Group, told Bloomberg’s David Ingles and Yvonne Man in an interview. “The government needs to do substantially more.”

In commodities, oil steadied as traders weigh a planned production increase from OPEC+ next month against currently lower output in Libya, while staying mindful of economic headwinds in China.

Key events this week:

• US markets closed for Labor Day holiday, Monday

• South Korea CPI, Tuesday

• Switzerland GDP, CPI, Tuesday

• South Africa GDP, Tuesday

• US construction spending, ISM Manufacturing index, Tuesday

• Mexico unemployment, Tuesday

• Brazil GDP, Tuesday

• Chile rate decision, Tuesday

• Australia GDP, Wednesday

• China Caixin services PMI, Wednesday

• Bloomberg CEO Forum in Jakarta, Wednesday

• Eurozone HCOB services PMI, PPI, Wednesday

• Poland rate decision, Wednesday

• Fed’s Beige Book, Wednesday

• Canada rate decision, Wednesday

• South Korea GDP, Thursday

• Malaysia rate decision, Thursday

• Philippines CPI, Thursday

• Taiwan CPI, Thursday

• Thailand CPI, Thursday

• Eurozone retail sales, Thursday

• Germany factory orders, Thursday

• US initial jobless claims, ADP employment, ISM services index, Thursday

• Eurozone GDP, Friday

• US nonfarm payrolls, Friday

• Canada unemployment, Friday

• Chile CPI, Friday

• Colombia CPI, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.1% as of 8:08 a.m. New York time

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average fell 0.1%

• The Stoxx Europe 600 fell 0.2%

• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.1063

• The British pound was little changed at $1.3135

• The Japanese yen fell 0.5% to 146.96 per dollar

Cryptocurrencies

• Bitcoin rose 0.1% to $58,486.53

• Ether rose 0.7% to $2,520.17

Bonds

• The yield on 10-year Treasuries was little changed at 3.90%

• Germany’s 10-year yield advanced three basis points to 2.33%

• Britain’s 10-year yield advanced four basis points to 4.05%

Commodities

• West Texas Intermediate crude fell 0.1% to $73.47 a barrel

• Spot gold fell 0.1% to $2,500.86 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Catherine Bosley and Sagarika Jaisinghani.

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©2024 Bloomberg L.P.

Economy

The relationship between the party affiliations of the U.S. presidents and economic growth has been a topic of extensive research and debate. Historically, some studies have suggested a correlation between the party in power and economic performance. For instance, data from the post-World War II era often shows that the U.S. economy has grown faster under Democratic presidents than Republican presidents. However, this correlation does not necessarily imply causation.

Kar Yong Ang, the Octa analyst, said: ‘Economic growth is a function of numerous variables, including global economic conditions, technological advancements, fiscal and monetary policies, and unforeseen events like natural disasters or pandemics. Therefore, attributing economic performance solely to the president’s party affiliation can be overly simplistic and potentially misleading.’

Indeed, the legislative branch also plays a crucial role in shaping economic policy. A president’s ability to implement their economic agenda often depends on the composition of Congress. For example, a president facing a divided government may struggle to pass significant economic reforms, regardless of party affiliation.

Still, there is widespread belief that Democratic administrations tend to focus more on fiscal stimulus and social welfare programs, which can boost consumer spending and economic growth in the short term. On the other hand, Republican administrations often emphasize tax cuts and deregulation, which can stimulate business investment and long-term economic growth.

The U.S. Key macro indicators under four presidents (2004–2024)

Source: Octa

At the same time, both bad and good events happen, regardless of who is in the White House. ‘Quite frankly, sometimes it’s just pure luck that defines Presidents’ track record on the economy. For example, Obama entered the White House when the U.S. economy was just about to start recovering following the great financial crisis of 2007–2008, whereas Trump may be said to be less fortunate as he faced the unprecedented Covid crisis during the final year of his presidency’, says Kar Yong Ang, Octa’s analyst. Overall, judging by historical macro indicators, there is no definite conclusion to make about which President is better for the economy.

U.S. Stocks

The U.S. stocks tend to experience increased volatility in the months leading up to an election. This is largely due to the uncertainty surrounding potential policy changes that could affect international trade, economic growth, and geopolitical stability. Therefore, market participants often engage in ‘wait-and-see’ behaviour, holding off on major investment decisions until the election outcome is clear. Historically, the stock market tends to perform better in the year following an election, particularly if the incumbent party wins, as this suggests policy continuity.

While elections can certainly stir immediate reactions, historical data reveals that their long-term impact on financial markets tends to be limited. Market performance over the medium to long term is more often influenced by broader economic parameters like inflation trends rather than who wins the election.

Dow Jones Industrial Average (DJIA) performance under four presidents (2004–2024)

Source: Octa

Historically, sectors like healthcare, energy, technology, and finance react differently to election results due to their sensitivity to legislative changes. The 2016 U.S. election serves as a notable example of markets reacting strongly to the election results, anticipating tax cuts and regulatory reforms that boosted market sentiment.

U.S. Dollar

Both domestic and international perceptions of the candidates’ economic policies influence the U.S. dollar’s performance during the election years. A candidate perceived as fiscally conservative might strengthen the dollar due to expectations of reduced government spending and lower inflation. Conversely, a candidate favouring expansive fiscal policies could lead to a weaker dollar due to concerns over increased debt.

Trade policies are another crucial factor. A candidate with a protectionist stance might introduce tariffs or renegotiate trade deals, which can affect the dollar’s value. Protectionist policies can lead to a stronger dollar in the short term due to reduced imports, but they might also result in retaliatory measures from trade partners, which could weaken the dollar in the long run.

Geopolitical stability and foreign relations are additional aspects that can affect the dollar during the election periods. A candidate perceived as more stable and predictable in foreign policy might boost the investors’ confidence, leading to a stronger dollar. On the other hand, a candidate whose policies are seen as potentially destabilizing could lead to a weaker dollar as investors seek alternative assets.

The U.S Dollar Index (DXY) performance under four presidents (2004–2024)

Source: Octa

Over the past 20 years, the U.S. Dollar Index (DXY) has performed better under Democratic Presidents and had negative returns under Republican leadership. However, as with the U.S. stock indices, it’s crucial not to oversimplify this trend. The U.S. dollar is a global reserve currency influenced by a myriad of factors beyond just presidential policies.

Gold

Gold, considered a safe-haven asset, typically sees increased demand during election periods marked by uncertainty. Historical data indicates that on a micro level, gold prices tend to rise in the months leading up to an election and may continue to do so if the election results are contested or lead to significant policy shifts.

However, Kar Yong Ang, an Octa analyst, notes: ‘If we look at the bigger picture, we see that gold price just generally tends to increase in the long-term and the ideological stance of an incumbent U.S. President has very little or no impact on its performance’. Indeed, the value of gold almost doubled during President Obama’s first term in office but experienced a 30% decline during his second term.

The U.S Dollar Index (DXY) performance under four residents (2004–2024)

Source: Octa

According to a study by the World Gold Council (WGC), gold typically performs slightly better in the six months leading up to a Republican president’s election and stays flat afterwards. On the other hand, it tends to underperform before a Democratic president’s election and performs just below its long-term average in the six months post-election period.^[1] However, WGC admits that these results are statistically insignificant and that gold is responding not to the party affiliation of an elected President but, more likely, to the expected effect of specific policies.

About Octa

Octa is an international broker that has been providing online trading services worldwide since 2011.

1. https://www.gold.org/goldhub/research/ballots-bullion-examining-us-elections-effect-gold ↑

This article was originally posted on FX Empire

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In a landscape where economic policy and market performance often intersect, a CNBC survey found that investors prefer former President Donald Trump’s potential impact on the stock market.

The poll, which surveyed 400 investors, traders, and money managers, found that 67% believe Trump would benefit stocks more.

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CNBC said the sentiment appears to be rooted in historical performance. During Trump’s four-year tenure, the S&P 500 surged 68%, while the Nasdaq saw a 137% climb. In contrast, under Biden’s administration thus far, the same indexes have gained 44% and 34%, respectively.

However, the investment community is divided on the market’s near-term trajectory. The survey found an even split among respondents; a third anticipate a drop, another third expect gains, while the remaining third see a rangebound market.

Trending:

That uncertainty reflects the factors influencing today’s economic landscape. While presidential policies can sway market sentiment, other elements often play a more important role. As Kristina Hooper, chief global market strategist at Invesco, told the New York Times, “Markets are politically agnostic. With good reason: it doesn’t matter.”

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The recent market rally has been largely attributed to investor enthusiasm surrounding artificial intelligence (AI) rather than political developments. CNBC noted that Microsoft emerged as the front-runner in the AI race, with 50% of survey respondents viewing it as best positioned to capitalize on the tech. Surprisingly, Nvidia did not make the top of that list.

The Federal Reserve’s monetary policy decisions continue to be a factor. Two-thirds of those polled expect the Fed to cut interest rates before year’s end (with many seeing a rate cut as soon as September), a move that could impact the market.

Interestingly, despite the clear preference for Trump regarding market performance, investors showed concerns about the current state of the major indexes. Eighty percent of respondents admitted feeling uneasy about the heavy concentration of tech stocks in the benchmarks.

Trending:

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Looking beyond equities, the survey highlighted India as the most attractive overseas market, followed by Japan and Europe. Corporate bonds emerged as the preferred investment vehicle in the absence of stocks.

As the 2024 election approaches, investors are reminded that while presidential rhetoric often ties market performance to administration policies, the reality is far more nuanced. Historical data shows that markets have generally trended upward regardless of which party occupies the White House.

Ultimately, as the survey results indicate, while investor sentiment may lean toward Trump for potential market gains, the road ahead for stocks appears as unpredictable as ever.

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The U.S. has a sweet tooth. Americans consume 34 teaspoons of sugar each day, according to the U.S. Department of Agriculture. That adds up to more than 100 pounds every year.

That much sugar consumption isn’t healthy. However, this sugar addiction is great for the bottom lines of companies focused on making sugary drinks, desserts, and snacks. They generate billions of dollars in profits each year. Many pay a large portion of their earnings to investors via dividend income.

Because of that, sugar stocks can be a great way to generate passive income. Coca-Cola (NYSE: KO), Hershey (NYSE: HSY), and Mondelez (NASDAQ: MDLZ) offer sweet dividends that can help satisfy any investor’s desire for passive income.

Add some pop to your passive income

Coca-Cola has an elite record of paying dividends. The beverage giant delivered its 62nd consecutive annual dividend increase in early 2024, raising its payout by 5.4% compared to the prior year’s level. That kept Coca-Cola in the elite group of Dividend Kings, companies with 50 or more years of consecutive dividend increases.

Coca-Cola paid $8 billion in dividends to its investors last year alone, boosting its total to $84.7 billion since January 2010. The beverage behemoth currently offers a dividend yield of around 2.7%. That’s more than double the S&P 500‘s dividend yield (recently around 1.3%).

The company is in a strong position to continue growing its dividend. Coca-Cola generates robust free cash flow ($9.2 billion expected in 2024 after covering capital expenditures) and has a cash-rich balance sheet ($17.4 billion of cash, equivalents, and short-term investments).

Meanwhile, the company expects its earnings to continue rising, driven by consumers’ sugar addiction and investments to grow its business. Its long-term target is to organically grow its revenue by 4% to 6% annually and deliver 7% to 9% earnings-per-share growth each year. That growing income stream should enable Coca-Cola to continue increasing its satisfying dividend.

A sweet income stream

Hershey has a long history of paying dividends. The chocolatier has increased its payout for 15 straight years, including giving investors a 15% raise earlier this year. Hershey currently offers a tasty dividend yield of 2.8%.

The iconic chocolate company owns top brands like its namesake, Reese’s, and KitKat. These brands generate billions of dollars in annual revenue and cash flow for the company. It has rung up more than $5 billion in sales during the first half of this year and nearly $1 billion in income.

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Hershey has been investing heavily in growing its business, including adding more salty snacks to its growing mix of sweets. These investments are helping grow the company’s earnings and cash flow. Its long-term target is to grow net sales by 2% to 4% per year and deliver 6% to 8% adjusted earnings-per-share growth. Meanwhile, Hershey hopes to increase its dividend in line with its earnings over the long term.

This dividend hits the spot

Mondelez has delivered dividend increases for the past dozen years. The global snacking giant gave its investors an 11% raise in June and delivered double-digit dividend-per-share growth in each of the last five years. It now yields around 2.6%.

The company has a knack for satisfying consumers’ desire for a snack. About 88% of consumers have a snack each day, with most of them (76%) loyal to specific brands. Mondelez owns many beloved brands, including Oreo, Milka, Cadbury, Ritz, Chips Ahoy!, and Clif. It’s the world’s leading cookie/biscuit seller and the second-largest chocolate company.

Mondelez aims to grow its revenue by 3% to 5% per year, putting it on track to deliver high single-digit earnings-per-share growth and strong free cash flow ($3+ billion annually). The company plans to use its free cash flow to make acquisitions, repurchase shares, and continue paying a growing dividend.

These sweet payouts should continue rising

For better or worse, sugar is a big part of the American diet. That’s enabling companies that produce sugary drinks, snacks, and treats to earn huge profits each year. They’re returning some of that money to investors via dividends. That makes them great options for investors seeking to satisfy their craving for more passive income.

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Today’s certificate of deposit (CD) interest rates are some of the highest we’ve seen in more than a decade thanks to several rate hikes by the Federal Reserve. Still, CD rates vary widely across financial institutions, so it’s important to ensure you’re getting the best rate possible when shopping around for a CD. The following is a breakdown of CD rates today and where to find the best offers.

Overview of CD rates today

Historically, longer-term CDs offered higher interest rates than shorter-term CDs. Generally, this is because banks would pay better rates to encourage savers to keep their money on deposit longer. However, in today’s economic climate, the opposite is true.

See our picks for the best CD accounts available today>>

As of September 1, 2024, CD rates remain competitive across the board. However, the highest CD rates can be found for shorter terms of around one year or less; the best rates stand at about 4% to 5% APY. The best CD rate today comes from Marcus by Goldman Sachs on its 1-year CD. Account holders can earn 4.70% APY with a minimum deposit of $500.

It’s certainly possible to find CDs with longer terms of two years or more that offer competitive rates, though they are closer to about 4% to 4.5% APY.

Here is a look at some of the best CD rates available today from our verified partners:

How much interest can I earn with a CD?

The amount of interest you can earn from a CD depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (CD interest typically compounds daily or monthly).

Say you invest $1,000 in a one-year CD at 1.85% APY (the current national average CD rate for a one-year term). At the end of that year, your balance would grow to $1,018.50 — your initial $1,000 deposit, plus $18.50 in interest.

Now let’s say you choose a one-year CD that offers 5% APY instead. In this case, your balance would grow to $1,051.16 over the same period, which includes $51.16 in interest.

The more you deposit in a CD, the more you stand to earn. If we took our same example of a one-year CD at 5% APY, but deposit $10,000, your total balance when the CD matures would be $10,511.62, meaning you’d earn $511.62 in interest. ​​

Read more: What is a good CD rate?

Types of CDs

When choosing a CD, the interest rate is usually top of mind. However, the rate isn’t the only factor you should consider. There are several types of CDs that offer different benefits, though you may need to accept a slightly lower interest rate in exchange for more flexibility. Here’s a look at some of the common types of CDs you can consider beyond traditional CDs:

• Bump-up CD: This type of CD allows you to request a higher interest rate if your bank’s rates go up during the account’s term. However, you’re usually allowed to “bump up” your rate just once.

• No-penalty CD: Also known as a liquid CD, type of CD gives you the option to withdraw your funds before maturity without paying a penalty.

• Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more), and often offer higher interest rate in return. In today’s CD rate environment, however, the difference between traditional and jumbo CD rates may not be much.

• Brokered CD: As the name suggests, these CDs are purchased through a brokerage rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and might not be FDIC-insured.