Interest Rates: What's An ADF Investor To Do?


Dear Fellow Investors and Friends, 

We have been hearing for a very long time that interest rates will be rising. As you know, rates are now on the move. The Fed Funds rate, which applies to funds that banks lend to and borrow from each other through the Federal Reserve, has been raised to a target level of 1%-1.25%. This is the rate we normally hear about when the “Fed” raises or lowers rates. The rate was lowered to 0%-.25% in December of 2008 in response to the financial crisis and stayed there until December of 2015 when it began its slow rise. Multiple rate increases are projected over the next few years. Changes in this rate do affect other rates, primarily in the short-term, but eventually in the longer-terms as well. Some rates change immediately like the Prime Rate.

A great many factors affect interest rates, and knowing which ones might have the greatest impact on any given day or period is impossible. Those factors include the Fed’s outlook and actions, geopolitical developments, inflation, the strength of the economy, multiple market factors, and emotions.  

Overall, we have yet to see significant movements in rates, and what we expect are slow, minimal increases over time. Only God knows the real answer.

As an ADF investor, what are some things to consider in this environment? Three possibilities might be:

  • Keep maturities short to wait and see where rates go before committing to longer terms. While you will probably end up with higher rates than are available for longer maturities right now, you will lose some income at lower-paying, short-term rates while you are waiting, especially if you have to wait a long time. ADF has tools to help you calculate different scenarios.

  • Invest now in longer-term maturities. You will be protected from possible up-and-down rate cycles and earn a better return, but you will have to wait a while to participate in any market rate increases. ADF offers Step-Up rate certificates to assist as rates rise.

  • “Ladder” your maturities over a comfortable period of three to five years. You build a ladder by investing equal amounts in a range of maturities. For example, you could place $1,000 in each of one- through five-year maturity certificates. At the end of year one, you invest the maturing amount in a five-year certificate. If rates have been rising, the reinvested amount will be at a rate higher than it was on the five-year certificate when you started. If rates go down, the opposite would be true, but you would still have money in the higher rate two-to-five year certificates.

ADF offers various products to help you save with stable, convenient vehicles for every age and situation, while providing both a financial return and a Kingdom Return on Investment (KROI). Call or email today and ask to speak with an Investment Services Representative if you would like more information.

Thank you for your ongoing investments in advancing the Kingdom. 

Please share your thoughts by contacting me at They are always welcome.

Lawrence L. McCooey, CPA, PFS, CGMA President

Lawrence L. McCooey, CPA, PFS, CGMA

Larry McCooey