New PenFed CD rates!
New PenFed CD rates!
Because of all you awesome Bogleheads, I learned about PenFed (and bought several 3-yr CDs at 2%). I also learned of the rumor on Deposit Accounts about possible 3% 5-yr CDs coming Dec. 1, so one minute after midnight, I checked:
Term Dividend Rate APY
6 Month 0.300% 0.30%
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
5-Year 3.000% 3.04%
7-Year 3.000% 3.04%
Woo-hoo!! Thanks again, Bogleheads!! You're the best!!
Term Dividend Rate APY
6 Month 0.300% 0.30%
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
5-Year 3.000% 3.04%
7-Year 3.000% 3.04%
Woo-hoo!! Thanks again, Bogleheads!! You're the best!!
Re: New PenFed CD rates!
Note the early withdrawal penalties:
Certificates with a term of 5 years or greater;
(applies only to certificates issued or rolled over on 3/15/11 or later)
If redeemed within 365 days of the issue date or any renewal date, all dividends will be forfeited.
If redeemed thereafter, but before the maturity date, dividends for the most recent 365 days will be forfeited.
Certificates with a term of 5 years or greater;
(applies only to certificates issued or rolled over on 3/15/11 or later)
If redeemed within 365 days of the issue date or any renewal date, all dividends will be forfeited.
If redeemed thereafter, but before the maturity date, dividends for the most recent 365 days will be forfeited.
Re: New PenFed CD rates!
Pretty decent 2 year rate. Might have to consider it.
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Re: New PenFed CD rates!
Their new 4 year rate offers a slightly better 2-yr return after penalties (1.67 vs 1.52)
Re: New PenFed CD rates!
The last time I bought a 5 year CD, it paid 13%. Admittedly, inflation was very high, but inflation came down over the next 5 years, so the 13% looked better and better. Ask yourself this: do you expect inflation to fall over the next 5 years? If so, your 3% might be a pretty good deal.
Re: New PenFed CD rates!
sscritic,
Early withdrawal penalties are 6 or 12 months interest.
Not snark: Do you have a better alternative for fixed income?
Other than perhaps I bonds, which can't be bought in quantity.
Hey, is there a better word than "fixed income" for cash, bonds, CDs, etc? TIPS and I Bonds don't seem fixed to me, except in real return.
Early withdrawal penalties are 6 or 12 months interest.
Not snark: Do you have a better alternative for fixed income?
Other than perhaps I bonds, which can't be bought in quantity.
Hey, is there a better word than "fixed income" for cash, bonds, CDs, etc? TIPS and I Bonds don't seem fixed to me, except in real return.
Re: New PenFed CD rates!
Not really. I just don't get excited and shout "Woo-hoo!!" when I discover the least worst of several bad choices.lazyday wrote:Do you have a better alternative for fixed income?
[worst, worster, and worstest were my choices here: I chose worst as the least worst grammatically]
Re: New PenFed CD rates!
good news- thanks for sharing.Happy2BeFree wrote:Because of all you awesome Bogleheads, I learned about PenFed (and bought several 3-yr CDs at 2%). I also learned of the rumor on Deposit Accounts about possible 3% 5-yr CDs coming Dec. 1, so one minute after midnight, I checked:
Term Dividend Rate APY
6 Month 0.300% 0.30%
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
5-Year 3.000% 3.04%
7-Year 3.000% 3.04%
Woo-hoo!! Thanks again, Bogleheads!! You're the best!!
RIP Mr. Bogle.
- stevewolfe
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Re: New PenFed CD rates!
Thanks for posting this. I personally *am* excited about this as I had a CD earning 2.6% mature a couple months ago and I dropped it in a 9 month no penalty CD hoping something better would come along and it just did... Dare I say 'woot'!
Re: New PenFed CD rates!
Can you do the 5 year CD in an IRA?
If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing? You could always open multiple CDs and rebalance out of them at a cost of 1 year interest.
If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing? You could always open multiple CDs and rebalance out of them at a cost of 1 year interest.
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Re: New PenFed CD rates!
My thoughts exactly. I have been liquidating most of my bond funds, which have paid about .30 this past year, in favor of the Penfed 2% 3-year CD, which has a 6-month interest penalty. I'm happy to have the higher rate, but my primary reason for the shift is that CDs just seem less risky right now than bond funds, due to concerns about easing and interest rate spikes. I'm a new diy investor and have concluded that I want the fixed income portion of my portfolio to be extremely low risk. CDs offer that--and at the same time their rates are better than bond funds. 2% is not going to make me rich, but I sleep better at night not worrying that 2% could turn into -2%. In a couple of years, I'll revisit.am wrote:Can you do the 5 year CD in an IRA?
If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing? You could always open multiple CDs and rebalance out of them at a cost of 1 year interest.
Re: New PenFed CD rates!
Yeah, I guess I felt that way when people were excited about less low TIPS yields.sscritic wrote:Not really. I just don't get excited and shout "Woo-hoo!!" when I discover the least worst of several bad choices.
Still, for those buying large CDs, it may be worthy of a "squee" or two.
Re: New PenFed CD rates!
If interest rates fall quickly, bonds rise in value. So bonds might provide some protection against events like 2007 or 1929.am wrote:(snip) , why would someone choose total bond over the CD
There's some threads or at least posts on CD vs bonds, but not sure how easy to find them.
My amateur opinion is that CDs with low early withdrawal penalties are much better today than taxable nominal bonds, for the individual investor.
EDIT: added "taxable"
thanks dratkinson
Last edited by lazyday on Sun Dec 01, 2013 10:54 am, edited 1 time in total.
- dratkinson
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- Location: Centennial CO
Re: New PenFed CD rates!
My data point.
Had the last of my 4% CDs mature this month and rolled them over into TE bonds. Not too worried about NAV fluctuation.
Double checked Vanguard today:
VWIUX (IT TE), 2.40% SEC yield, 3.00% TEY (25% fed avoided, 5% state paid, 20% combined avoided).
VWLUX (LT TE), 3.48% Sec yield, 4.35% TEY (20% bracket).
Edit. Corrected error noted by marcwd.
Had the last of my 4% CDs mature this month and rolled them over into TE bonds. Not too worried about NAV fluctuation.
Double checked Vanguard today:
VWIUX (IT TE), 2.40% SEC yield, 3.00% TEY (25% fed avoided, 5% state paid, 20% combined avoided).
VWLUX (LT TE), 3.48% Sec yield, 4.35% TEY (20% bracket).
Edit. Corrected error noted by marcwd.
Last edited by dratkinson on Mon Dec 02, 2013 8:54 pm, edited 1 time in total.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
Re: New PenFed CD rates!
Thanks, Ricola...note also that none of the penalties will eat into principal. I believe Kevin M has confirmed this in previous posts, and it's a really nice side benefit.Ricola wrote:Note the early withdrawal penalties:
Certificates with a term of 5 years or greater;
(applies only to certificates issued or rolled over on 3/15/11 or later)
If redeemed within 365 days of the issue date or any renewal date, all dividends will be forfeited.
If redeemed thereafter, but before the maturity date, dividends for the most recent 365 days will be forfeited.
Last edited by Happy2BeFree on Sun Dec 01, 2013 10:23 pm, edited 1 time in total.
Re: New PenFed CD rates!
Yes - if the details of any penalty for early wd are important - note that for most (but not all) CDs/certificates issued by banks and credit unions, the early wd penalty may eat into the original principal. Read the "fine print".
Re: New PenFed CD rates!
goodenoughinvestor wrote:My thoughts exactly. I have been liquidating most of my bond funds, which have paid about .30 this past year, in favor of the Penfed 2% 3-year CD, which has a 6-month interest penalty. I'm happy to have the higher rate, but my primary reason for the shift is that CDs just seem less risky right now than bond funds, due to concerns about easing and interest rate spikes. I'm a new diy investor and have concluded that I want the fixed income portion of my portfolio to be extremely low risk. CDs offer that--and at the same time their rates are better than bond funds. 2% is not going to make me rich, but I sleep better at night not worrying that 2% could turn into -2%. In a couple of years, I'll revisit.am wrote:Can you do the 5 year CD in an IRA?
If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing? You could always open multiple CDs and rebalance out of them at a cost of 1 year interest.
Yes, you can do IRA CDs as well (including inherited IRAs). I've been going back and forth between Total Bond and CD due to ease of rebalancing...but that 3% has surely tipped the scales!
Re: New PenFed CD rates!
am wrote:Can you do the 5 year CD in an IRA?
For reference:Happy2BeFree wrote:Yes, you can do IRA CDs as well (including inherited IRAs).
https://www.penfed.org/Traditional-IRA-Certificates/
https://www.penfed.org/Roth-IRA/
https://www.penfed.org/Opening-an-IRA-Account/ (opens pdf form)
Re: New PenFed CD rates!
6 Month 0.300% 0.30%goodenoughinvestor wrote:Their new 4 year rate offers a slightly better 2-yr return after penalties (1.67 vs 1.52)
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
For those planning to hold the CDs for 2 years, the effective rates are as follows:
- - Get a 2-year CD and keep it for 2 years, get 1.41% per year.
- Get a 3-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.01% and get 1.5 years of interest, or 3.03%, or 1.52% per year.
- Get a 4-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.11% and get 1.5 years of interest, or 3.33%, which is about 1.67% per year.
- - Get a 3-year CD and keep it for 3 years, get 2.02% per year.
- Get a 4-year CD and keep it for 3 years, lose 0.5 year of interest, which is 1.11% and get 2.5 years of interest, or 5.55%, which is about 1.85% per year.
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: New PenFed CD rates!
Thanks Victoria!VictoriaF wrote:6 Month 0.300% 0.30%goodenoughinvestor wrote:Their new 4 year rate offers a slightly better 2-yr return after penalties (1.67 vs 1.52)
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
For those planning to hold the CDs for 2 years, the effective rates are as follows:
For those planning to hold the CDs for 3 years, the effective rates are as follows:
- - Get a 2-year CD and keep it for 2 years, get 1.41% per year.
- Get a 3-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.01% and get 1.5 years of interest, or 3.03%, or 1.52% per year.
- Get a 4-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.11% and get 1.5 years of interest, or 3.33%, which is about 1.67% per year.
Thus, the 4-year CD wins for the 2-year and 4-year holding periods, and the 3-year CD wins for the 3-year holding period.
- - Get a 3-year CD and keep it for 3 years, get 2.02% per year.
- Get a 4-year CD and keep it for 3 years, lose 0.5 year of interest, which is 1.11% and get 2.5 years of interest, or 5.55%, which is about 1.85% per year.
Victoria
Re: New PenFed CD rates!
and where does the 5 yr place in this race?
Re: New PenFed CD rates!
5-year CDs incur 1-year penalties. They are slightly better than 4-year CDs for 4 years. I have not checked other holding durations.kaneohe wrote:and where does the 5 yr place in this race?
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: New PenFed CD rates!
Have you compared the short term investment grade bond fund (VFSUX) to CDs?am wrote:Can you do the 5 year CD in an IRA?
If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing? You could always open multiple CDs and rebalance out of them at a cost of 1 year interest.
Re: New PenFed CD rates!
Thanks!
Just picked up a 3 year to help fill in my existing CD ladder.
2.02% APR beats 0.02% in Money Market/Checking!
Just picked up a 3 year to help fill in my existing CD ladder.
2.02% APR beats 0.02% in Money Market/Checking!
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Re: New PenFed CD rates!
This doesn't seem right.dratkinson wrote:My data point.
Had the last of my 4% CDs mature this month and rolled them over into TE bonds. Not too worried about NAV fluctuation.
Double checked Vanguard today:
VWIUX (IT TE), 2.40% SEC yield, 3.20% TEY (25% bracket), give back 5% to state = 3.04% after tax.
VWLUX (LT TE), 3.48% Sec yield, 4.64% TEY (25% bracket), give back 5% to state = 4.41% after tax.
The state tax rate will be assessed on what you actually receive - that is, the SEC yield, not the Tax-Equivalent Yield.
The true "after tax" yields are:
VWIUX 2.4% - 5% (state tax) = 2.28%
VWLUX 3.48% - 5% (state tax) = 3.31%
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Re: New PenFed CD rates!
Because I can't buy these in my 401k.am wrote:If so, why would someone choose total bond over the CD for fixed income other than maybe having easier rebalancing?
Re: New PenFed CD rates!
Have not a clue, but the custodian-to-custodian IRA transfers forms are winging their way. I think I finally figured out how PenFed pushed back on "hot money". For after-tax, there's a limit on CDs, with a waiting period.
- stevewolfe
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- Joined: Fri Oct 10, 2008 7:07 pm
Re: New PenFed CD rates!
Can you elaborate on what you mean by this? Something in the CD agreement?john94549 wrote:I think I finally figured out how PenFed pushed back on "hot money". For after-tax, there's a limit on CDs, with a waiting period.
Re: New PenFed CD rates!
Stevestevewolfe wrote:Can you elaborate on what you mean by this? Something in the CD agreement?john94549 wrote:I think I finally figured out how PenFed pushed back on "hot money". For after-tax, there's a limit on CDs, with a waiting period.
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
- stevewolfe
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Re: New PenFed CD rates!
Thank you. They must be changing those parameters as it's been a year or so since I bought the last one there and they didn't have those restrictions in place. Thanks for the information.Bustoff wrote:Steve
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
Re: New PenFed CD rates!
I asked specifically about NON-IRA deposits over 25K a few weeks ago when I heard about their 4 year rate. I was told > $25K was allowed if the funds were wired or were first deposited into a savings account by a check sent certified mail and that restriction is lifted after one holds the account for 6mos.Bustoff wrote: Steve
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
However every time I asked a question the person I spoke to had to go ask someone else before relaying the info to me so I didn't have much confidence in him and would ask again before investing. I did open a savings account for $5 (which apparently is required no matter what), just incase I decide to go for a CD. Read here about the potential of higher interest in Dec and waited for that, but not thrilled about the early redemption rate on the 5 year.
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Re: New PenFed CD rates!
That's not what PenFed told me when I asked the same question. The response I got back (email pasted below) was that you cannot deposit more than $25,000 per day unless you've been a member for more than 6 months. So I've opened a new CD account with them on line (via ACH) each day for the past week! I've already received the signature page paperwork by snail mail for the first two CDs I opened this way.island wrote:Bustoff wrote: Steve
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
"There are daily limits on the amount you may transfer into PenFed Online via ACH
electronic transfer. The limits are based on the length of time your membership
has been established.
Deposit limits on memberships open 6 months or less:
Account Type Limit
Share $50.00
Checking/MMSA $50.00
Money Market Certificates $25,000.00
Deposit limits on memberships open MORE than 6 months:
Account Type Limit
Share $5,000
Checking / MMSA $5,000
Money Market Certificates No limit "
Re: New PenFed CD rates!
goodenoughinvestor wrote:That's not what PenFed told me when I asked the same question. The response I got back (email pasted below) was that you cannot deposit more than $25,000 per day unless you've been a member for more than 6 months. So I've opened a new CD account with them on line (via ACH) each day for the past week! I've already received the signature page paperwork by snail mail for the first two CDs I opened this way.island wrote:Bustoff wrote: Steve
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
"There are daily limits on the amount you may transfer into PenFed Online via ACH
electronic transfer. The limits are based on the length of time your membership
has been established.
Deposit limits on memberships open 6 months or less:
Account Type Limit
Share $50.00
Checking/MMSA $50.00
Money Market Certificates $25,000.00
Deposit limits on memberships open MORE than 6 months:
Account Type Limit
Share $5,000
Checking / MMSA $5,000
Money Market Certificates No limit "
Thanks for the additional info. Yeah that's why I said I'd check again before investing since info provide and experienced by others seems to vary.
Here's another thread on the subject. One poster, Chicago, said s/he opened an account with $5, then just mailed a check in excess of 25K for a CD and presumable it was accepted. http://www.bogleheads.org/forum/viewtop ... 4&start=50
Re: New PenFed CD rates!
I'm confused about this policy. I became a member of PenFed in early Nov. and opened two CDs online (using ACH transfers from a bank). Each was less than 25k, but together they exceeded 25k. A little over a week later, I bought another two CDs, which together did not exceed 25k. Today I bought two more CDs, again, combined, in excess of 25k. I didn't have any problems.
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Re: New PenFed CD rates!
Island: Sometimes it seems with financial institutions that you can get a different answer every time you call. (In my experience, Ameritrade is the worst offender.) In such cases, as the saying goes,"it's usually better to apologize than ask permission."
At first I was annoyed that PenFed was capping each CD at $25000 for new members. But then I realized this actually works well for me--I can dole out the savings in small increments as needed, rather than taking the penalty bite on a larger lump sum.
At first I was annoyed that PenFed was capping each CD at $25000 for new members. But then I realized this actually works well for me--I can dole out the savings in small increments as needed, rather than taking the penalty bite on a larger lump sum.
Re: New PenFed CD rates!
Thanks for sharing !goodenoughinvestor wrote:That's not what PenFed told me when I asked the same question. The response I got back (email pasted below) was that you cannot deposit more than $25,000 per day unless you've been a member for more than 6 months. So I've opened a new CD account with them on line (via ACH) each day for the past week! I've already received the signature page paperwork by snail mail for the first two CDs I opened this way.island wrote:Bustoff wrote: Steve
When I opened my account two weeks ago, PenFed advised the maximum deposit was $25,000 and no additional deposits allowed for 6 mo.'s.
That restriction did not apply to IRA transfers.
"There are daily limits on the amount you may transfer into PenFed Online via ACH
electronic transfer. The limits are based on the length of time your membership
has been established.
Deposit limits on memberships open 6 months or less:
Account Type Limit
Share $50.00
Checking/MMSA $50.00
Money Market Certificates $25,000.00
Deposit limits on memberships open MORE than 6 months:
Account Type Limit
Share $5,000
Checking / MMSA $5,000
Money Market Certificates No limit "
Sounds like I got bad information from the PenFed rep I was dealing with. After they told me about the limit, I expressed disappointment and asked them to confirm, but they insisted I had to wait 6 months.
That's even better having several CD's. In the event you need an early withdrawal you only need to break one CD.goodenoughinvestor wrote:So I've opened a new CD account with them on line (via ACH) each day for the past week! I've already received the signature page paperwork by snail mail for the first two CDs I opened this way.
So you're not adding more money to the existing CD but rather opening new and separate CD's ? All online without speaking to anyone ?
Do you have to open a new account for each CD?
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Re: New PenFed CD rates!
Yes! So far, so good. I did this online every day this past week except for Thanksgiving. By Friday I had received two separate mailings for the first two accounts--signature cards, basically, that came with (postage paid!) return envelopes.goodenoughinvestor wrote:So you're not adding more money to the existing CD but rather opening new and separate CD's ? All online without speaking to anyone ?
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Re: New PenFed CD rates!
Bustoff: To be clear, yes I opened a new account for each CD. I opened one a day, at the $25000 limit.
Re: New PenFed CD rates!
I hate to be the fly in the ointment or the monkey in the wrench, but assuming PenFed could change the terms of the early withdrawal penalties, does anyone know if they allow smaller multiple CD's rather than one large one?VictoriaF wrote:6 Month 0.300% 0.30%goodenoughinvestor wrote:Their new 4 year rate offers a slightly better 2-yr return after penalties (1.67 vs 1.52)
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
For those planning to hold the CDs for 2 years, the effective rates are as follows:
For those planning to hold the CDs for 3 years, the effective rates are as follows:
- - Get a 2-year CD and keep it for 2 years, get 1.41% per year.
- Get a 3-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.01% and get 1.5 years of interest, or 3.03%, or 1.52% per year.
- Get a 4-year CD and keep it for 2 years, lose 0.5 year of interest, which is 1.11% and get 1.5 years of interest, or 3.33%, which is about 1.67% per year.
Thus, the 4-year CD wins for the 2-year and 4-year holding periods, and the 3-year CD wins for the 3-year holding period.
- - Get a 3-year CD and keep it for 3 years, get 2.02% per year.
- Get a 4-year CD and keep it for 3 years, lose 0.5 year of interest, which is 1.11% and get 2.5 years of interest, or 5.55%, which is about 1.85% per year.
Victoria
Re: New PenFed CD rates!
Yes, you can open multiple smaller cd's. I think the minimum is $1K. I opened multiple $5K cd's today.
Re: New PenFed CD rates!
I became a new Pen Fed Member three weeks ago and sent a check for over 25K, had it deposited in the new savings account, printed the CD application online, filled it out with my spouse and mailed it to PenFed and purchased a 3 year 2% CD. Today I cancelled the 3 year CD and transferred the funds to a new 5 year 3% CD. Well over 25K and no issues.
Re: New PenFed CD rates!
Hi Chicago 60. I remember you posted that in the other thread and was hoping you'd be back to confirm they accepted it.Chicago60 wrote:I became a new Pen Fed Member three weeks ago and sent a check for over 25K, had it deposited in the new savings account, printed the CD application online, filled it out with my spouse and mailed it to PenFed and purchased a 3 year 2% CD. Today I cancelled the 3 year CD and transferred the funds to a new 5 year 3% CD. Well over 25K and no issues.
Another discrepancy...Husband called to clarify eligibility. BIL is a government worker that falls under an approved category for joining. Was told not good enough has to be a direct relative or house mate. Seems arbitrary. I put his name in anyway and it accepted the application no problem.
Re: New PenFed CD rates!
All credit unions have "membership eligibility" requirements. Some are very expansive, while others are quite restrictive - all depends on the state or federal charter of that credit union. PenFed has (or at least used to have) a "back door" to membership (join some association), but I think the federal regulators may be closing that back door. Not sure.island wrote:Hi Chicago 60. I remember you posted that in the other thread and was hoping you'd be back to confirm they accepted it.Chicago60 wrote:I became a new Pen Fed Member three weeks ago and sent a check for over 25K, had it deposited in the new savings account, printed the CD application online, filled it out with my spouse and mailed it to PenFed and purchased a 3 year 2% CD. Today I cancelled the 3 year CD and transferred the funds to a new 5 year 3% CD. Well over 25K and no issues.
Another discrepancy...Husband called to clarify eligibility. BIL is a government worker that falls under an approved category for joining. Was told not good enough has to be a direct relative or house mate. Seems arbitrary. I put his name in anyway and it accepted the application no problem.
All federal credit unions (today) include "immediate family" and "household members" of those in the field of membership to join. Once someone is a member, that expands to that member's immediate family and household. "Immediate family" can live anywhere and specifically names the relationships: spouse, siblings, parents, children, grandchildren (I think).
Sometimes the exact relationships may not be either understood or enforced by the account reps. I believe that a brother-in-law (in the field of membership) - not in the same household would not qualify you. BUT - assuming the BIL is married to your sister - sister is eligible (as spouse) . So, sister becomes a credit union member (spouse of eligible person). Then, her siblings become eligible as "immediate family". In theory, even a very, very small credit union with a very limited membership eligibility could, over time, include nearly every man, woman and child in the US - if folks started joining and signed up all eligible family and household.
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Re: New PenFed CD rates!
Penfed allows you to join if you make a one-time donation to one of the two veteran's non-profit organizations they have listed on their website. I think the cost is $20 or $25. So, basically, anyone can join.
Re: New PenFed CD rates!
PenFed seems to require opening new accounts by phone now:goodenoughinvestor wrote:Bustoff: To be clear, yes I opened a new account for each CD. I opened one a day, at the $25000 limit.
"Please call us at 800-247-xxxx and one of our Member Service Representatives will be happy to take your application request over the phone."
Are you calling and creating a new account each time?
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Re: New PenFed CD rates!
no--I did it all online. First I joined by clicking on the "join Penfed" tab. Once I had opened a "regular share" account (by paying $5 and joining one of the non-profit veteran-support orgs) I used my user name and password to enter the site. Then I clicked on the "open account/certificate" tab and followed the directions. Note: I wasn't creating IRA accounts--maybe the process is different for those.surfer1 wrote:PenFed seems to require opening new accounts by phone now:goodenoughinvestor wrote:Bustoff: To be clear, yes I opened a new account for each CD. I opened one a day, at the $25000 limit.
"Please call us at 800-247-xxxx and one of our Member Service Representatives will be happy to take your application request over the phone."
Are you calling and creating a new account each time?
Re: New PenFed CD rates!
So the rumor we heard a week or two ago turned out to be true! I have been preparing for this during the last week, and started acting today.
Kevin
- Opened new $115K 3% 5-year CD for my partner with cash we consolidated last week. Did this online in a few minutes.
- Emailed signed note telling them to do an early withdrawal of the $100K 2% 3-year CD my partner recently opened, and reinvest it in the 3% 5-year CD. Rep verified by phone that they could do this all in one step with the written instructions (was pleasantly surprised at the short phone wait time, but rep did say they are getting a large volume of these requests, so it could be four days or so until it's done).
- Opened new $80K 5-year 3% CD for myself online with cash I had been raising for other purposes.
- To raise cash for short-term needs, called Ally and did early withdrawal from two 5-year 2% CDs (EWP 60 days of interest) worth about $15K. Easy; nothing in writing required, and funds are to be available in 1-2 days. (Rep could not believe it when I told her about the 3% CD.)
- To raise cash for short/intermediate-term needs, and possibly more into another 3% CD, will do early withdrawal of about $50K from a Barclays 5-year 1.85% CD with an EWP of 90 days of interest on Monday.
- Am considering doing early withdrawals of some of my Ally 2.4% 5-year CDs (EWP 60 days of interest), but they mature in about two years, so they are really 2.4% 2-year CDs. On $100K (less penalty) that's only about $800 more in pre-tax interest after two years with the PenFed 3% CD, and would earn about $2K less if I broke the PenFed CD after two years. I guess I'm leaning against this. Inputs?
- I cannot take much advantage of this great deal in an IRA because I already will be close to NCUA insurance limit when my PenFed 5-year IRA CD matures in two years. Since that CD is earning 2.75% with an EWP of 180 days of interest, and two years would be just about the break-even point for this move, it's not worth breaking it to reinvest at 3% with an EWP of 365 days of interest. My PenFed 7-year IRA CD is earning 3.49%, so no thought needed on that one yet.
- I haven't yet seriously considered selling any of my tax-exempt bond funds yet to buy more of the 3% CDs, but will be thinking about it.
- Have been selling stocks to raise cash, get back to target allocation, and simplify portfolio, and probably will sell more since I'm still a bit above target and would like to put more into these 3% CDs.
Kevin
If I make a calculation error, #Cruncher probably will let me know.
Re: New PenFed CD rates!
Ah, I see. So just to be clear, you click "Join Penfed" just one time, to get a share account. After that, you open a new CD every day using the same login, by clicking "open account/certificate" tab each day? Or are you actually clicking "Join Pedfed" every day, opening up a separate share account each time?goodenoughinvestor wrote:no--I did it all online. First I joined by clicking on the "join Penfed" tab. Once I had opened a "regular share" account (by paying $5 and joining one of the non-profit veteran-support orgs) I used my user name and password to enter the site. Then I clicked on the "open account/certificate" tab and followed the directions. Note: I wasn't creating IRA accounts--maybe the process is different for those.
Re: New PenFed CD rates!
It is my understanding that the "no EWP" on partial withdrawals applies to IRA CDs.
That said, I also have my IRA custodian-to-custodian transfer in the mail. Can't beat the 5-year rate these days.
That said, I also have my IRA custodian-to-custodian transfer in the mail. Can't beat the 5-year rate these days.
Re: New PenFed CD rates!
I'm already a member. Do they require anything at all in writing from you/me? Or is it 100% online? I'm traveling overseas and if they send me mail it'll be difficult to get.goodenoughinvestor wrote:no--I did it all online. First I joined by clicking on the "join Penfed" tab. Once I had opened a "regular share" account (by paying $5 and joining one of the non-profit veteran-support orgs) I used my user name and password to enter the site. Then I clicked on the "open account/certificate" tab and followed the directions. Note: I wasn't creating IRA accounts--maybe the process is different for those.surfer1 wrote:PenFed seems to require opening new accounts by phone now:goodenoughinvestor wrote:Bustoff: To be clear, yes I opened a new account for each CD. I opened one a day, at the $25000 limit.
"Please call us at 800-247-xxxx and one of our Member Service Representatives will be happy to take your application request over the phone."
Are you calling and creating a new account each time?
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