Penfed 10 yr 5% IRA CD's- break CD's early?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
Rowdie
Posts: 16
Joined: Sat Sep 17, 2016 10:48 am
Location: Missouri Ozarks

Penfed 10 yr 5% IRA CD's- break CD's early?

Post by Rowdie » Thu Feb 07, 2019 5:09 pm

Eight years ago Penfed had a CD special and some of us were able to get 5% 10yr IRA CD's.

I just called Penfed and would forfeit 1 yr interest to break them now.

Plan to put the money in Total Bond Fund at Vanguard. All my other money is at Vanguard (except checking). Getting inheritance next month to add to taxable. Working on AA.

Should I be patient and transfer in Jan 2021 when they come due or bite the bullet and get it done? Opinions please :happy

grok87
Posts: 8920
Joined: Tue Feb 27, 2007 9:00 pm

Re: Penfed 10 yr 5% IRA CD's- break CD's early?

Post by grok87 » Thu Feb 07, 2019 5:20 pm

Rowdie wrote:
Thu Feb 07, 2019 5:09 pm
Eight years ago Penfed had a CD special and some of us were able to get 5% 10yr IRA CD's.

I just called Penfed and would forfeit 1 yr interest to break them now.

Plan to put the money in Total Bond Fund at Vanguard. All my other money is at Vanguard (except checking). Getting inheritance next month to add to taxable. Working on AA.

Should I be patient and transfer in Jan 2021 when they come due or bite the bullet and get it done? Opinions please :happy
Total bond fund is yielding around 3.1%. Why would you want to give up 5% yield and pay a penalty to boot?
RIP Mr. Bogle.

Topic Author
Rowdie
Posts: 16
Joined: Sat Sep 17, 2016 10:48 am
Location: Missouri Ozarks

Re: Penfed 10 yr 5% IRA CD's- break CD's early?

Post by Rowdie » Thu Feb 07, 2019 5:25 pm

Merely to get all funds in place while I'm adding inheritance money. That is only reason.

User avatar
Darth Xanadu
Posts: 721
Joined: Sat Jan 27, 2018 1:47 am
Location: Middle Earth

Re: Penfed 10 yr 5% IRA CD's- break CD's early?

Post by Darth Xanadu » Thu Feb 07, 2019 5:40 pm

I think my short answer is, no, let it be and enjoy that 5% for the next couple years.

However, I do think scale matters here, so it might depend on how much we're talking about. If it's Less than $1k in forfeited interest I could see, maybe, spending that money to "buy" some simplicity. But even then, probably not.
"A courageous teacher, failure is."

dcw213
Posts: 161
Joined: Sun Dec 16, 2012 3:04 pm

Re: Penfed 10 yr 5% IRA CD's- break CD's early?

Post by dcw213 » Thu Feb 07, 2019 7:05 pm

I'd say that nearly all on this forum would be lining up to buy a 5% CD with a 2 year duration today. Don't see why you would give this up.

Topic Author
Rowdie
Posts: 16
Joined: Sat Sep 17, 2016 10:48 am
Location: Missouri Ozarks

Re: Penfed 10 yr 5% IRA CD's- break CD's early?

Post by Rowdie » Thu Feb 07, 2019 7:48 pm

Thank you for the replies, Bogleheads have such good common sense. I'll keep them until 2021! :happy

Post Reply