My Credit Union doesn't charge early withdrawal penalty on Roth CDs

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CULater
Posts: 400
Joined: Sun Nov 13, 2016 10:59 am

My Credit Union doesn't charge early withdrawal penalty on Roth CDs

Post by CULater » Thu Oct 05, 2017 10:34 am

I just checked for the second time with my local credit union and confirmed that they do not assess any early withdrawal penalty on CDs in a Roth account for depositors over age 59 1/2. I keep blinking and wondering. I thought every financial institution always charged early withdrawal fees of some sort on CDs. But I was told that I can withdraw the entire amount, principal plus accumulated earnings, at any time with no fees. Just reaching out to see if anyone else with a Roth CD at a credit union or other financial institution has been told this also. I don't understand how they can do it, since it means I virtually have a liquid cash account that earns 2.5% if this is true.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

sailaway
Posts: 43
Joined: Fri May 12, 2017 1:11 pm

Re: My Credit Union doesn't charge early withdrawal penalty on Roth CDs

Post by sailaway » Thu Oct 05, 2017 10:42 am

Ally was recently offering this on their regular CDs.

If you choose this route, make sure to check each time you rollover your CDs.

rkhusky
Posts: 4313
Joined: Thu Aug 18, 2011 8:09 pm

Re: My Credit Union doesn't charge early withdrawal penalty on Roth CDs

Post by rkhusky » Thu Oct 05, 2017 10:43 am

CULater wrote:
Thu Oct 05, 2017 10:34 am
I don't understand how they can do it, since it means I virtually have a liquid cash account that earns 2.5% if this is true.
Sounds like a good deal, but not quite a cash account, since you can't do partial withdrawals.

CULater
Posts: 400
Joined: Sun Nov 13, 2016 10:59 am

Re: My Credit Union doesn't charge early withdrawal penalty on Roth CDs

Post by CULater » Thu Oct 05, 2017 10:54 am

rkhusky wrote:
Thu Oct 05, 2017 10:43 am
CULater wrote:
Thu Oct 05, 2017 10:34 am
I don't understand how they can do it, since it means I virtually have a liquid cash account that earns 2.5% if this is true.
Sounds like a good deal, but not quite a cash account, since you can't do partial withdrawals.
Apparently, I can withdraw any amount without penalty. Not quite a cash account because the only way I can put more money in is to roll over or convert from other IRA accounts and use those funds to purchase new CDs at the credit union at prevailing rates. I am thinking seriously about doing that.
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

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