Best CD rates thread

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MikeG62
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Re: Best CD rates thread

Post by MikeG62 » Tue Nov 12, 2019 8:42 am

indexfundfan wrote:
Tue Nov 12, 2019 7:59 am
MikeG62 wrote:
Tue Nov 12, 2019 7:46 am
nickb wrote:
Mon Nov 11, 2019 8:22 pm
I just received an email from PSECU

...We will also honor prior rates for 24-month certificates and 36-month certificates if you call us before November 30 to open a certificate.
So does this mean any existing customer can open another 24 or 36 month CD if calling before Nov 30th?

That's the way I am interpreting it, but wondering if there is any other interpretation?
It does say it is for "new membership applications".
That applies to the prior sentence.

We will honor current rates for 24-month certificate and 36-month certificate requests for new membership applications submitted before November 9 at 5 p.m. We will also honor prior rates for 24-month certificates and 36-month certificates if you call us before November 30 to open a certificate.


The use of the word "also" would appear to disconnect the extension to Nov 30th from new members only. Otherwise why add this sentence at all as the first sentence already opens the door for new members? Is it just to allow new membership applications in the pipe until month end to add the CD's?

Edited to add:

Just spoke to Michele in the certificates department who said the extension to Nov 30th applies to all members. The reason this is relevant to me at all is that I opened my existing CD's on Oct 7th. So by opening new 24 and 36 month CD's on Nov 30th (instead of carrying through with add-on's I have already scheduled) I am effectively extending the term of the rate lock by the better part of two months.
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Julieta7
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Re: Best CD rates thread

Post by Julieta7 » Tue Nov 12, 2019 12:27 pm

nalor511 wrote:
Mon Nov 11, 2019 1:40 pm
quisp65 wrote:
Mon Nov 11, 2019 4:57 am
Never called these guys up to see if there would be anyway to get an account. But they are 3.37% 120 month with I believe a 90 day EWP. Would be nice to have 4 $50K CDs that I could cancel when needed. I'd take a few day vacation to Denver for that. I have nothing to invest now though.

https://www.depositaccounts.com/banks/e ... html#rates
I doubt the penalty on the 120mo is only 90 days, and there's no further info on the webpage about how to open it or what the penalty is. It says under penalty, "3MO+", whatever that plus indicates. Unless someone gets the truth-in-savings disclosure which should list the penalty. It says contact a branch. The webpage also looks like about 2002.
We live in Colorado and called this morning and the 90 day penalty is valid for the 120 mo CD. We are going there this morning to open an account.

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indexfundfan
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Re: Best CD rates thread

Post by indexfundfan » Tue Nov 12, 2019 12:49 pm

Julieta7 wrote:
Tue Nov 12, 2019 12:27 pm
nalor511 wrote:
Mon Nov 11, 2019 1:40 pm
quisp65 wrote:
Mon Nov 11, 2019 4:57 am
Never called these guys up to see if there would be anyway to get an account. But they are 3.37% 120 month with I believe a 90 day EWP. Would be nice to have 4 $50K CDs that I could cancel when needed. I'd take a few day vacation to Denver for that. I have nothing to invest now though.

https://www.depositaccounts.com/banks/e ... html#rates
I doubt the penalty on the 120mo is only 90 days, and there's no further info on the webpage about how to open it or what the penalty is. It says under penalty, "3MO+", whatever that plus indicates. Unless someone gets the truth-in-savings disclosure which should list the penalty. It says contact a branch. The webpage also looks like about 2002.
We live in Colorado and called this morning and the 90 day penalty is valid for the 120 mo CD. We are going there this morning to open an account.
If the EWP is 90 days, that's a very good deal. At the 2-year mark, if you make an early withdrawal, the APY is 2.97%. See the calculator below

https://www.depositaccounts.com/tools/e ... enalties=3

And if the rates stay low, you get to keep the 3.37% rate for 10 years.
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4th and Inches
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Re: Best CD rates thread

Post by 4th and Inches » Tue Nov 12, 2019 1:14 pm

indexfundfan wrote:
Tue Nov 12, 2019 12:49 pm
Julieta7 wrote:
Tue Nov 12, 2019 12:27 pm
nalor511 wrote:
Mon Nov 11, 2019 1:40 pm
quisp65 wrote:
Mon Nov 11, 2019 4:57 am
Never called these guys up to see if there would be anyway to get an account. But they are 3.37% 120 month with I believe a 90 day EWP. Would be nice to have 4 $50K CDs that I could cancel when needed. I'd take a few day vacation to Denver for that. I have nothing to invest now though.

https://www.depositaccounts.com/banks/e ... html#rates
I doubt the penalty on the 120mo is only 90 days, and there's no further info on the webpage about how to open it or what the penalty is. It says under penalty, "3MO+", whatever that plus indicates. Unless someone gets the truth-in-savings disclosure which should list the penalty. It says contact a branch. The webpage also looks like about 2002.
We live in Colorado and called this morning and the 90 day penalty is valid for the 120 mo CD. We are going there this morning to open an account.
If the EWP is 90 days, that's a very good deal. At the 2-year mark, if you make an early withdrawal, the APY is 2.97%. See the calculator below

https://www.depositaccounts.com/tools/e ... enalties=3

And if the rates stay low, you get to keep the 3.37% rate for 10 years.
Julieta7 or if anybody else opens an account please report back what your experience is. Any information on how long this offer will be in effect?

csmath
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Re: Best CD rates thread

Post by csmath » Tue Nov 12, 2019 1:50 pm

Julieta7 wrote:
Tue Nov 12, 2019 12:27 pm
nalor511 wrote:
Mon Nov 11, 2019 1:40 pm
quisp65 wrote:
Mon Nov 11, 2019 4:57 am
Never called these guys up to see if there would be anyway to get an account. But they are 3.37% 120 month with I believe a 90 day EWP. Would be nice to have 4 $50K CDs that I could cancel when needed. I'd take a few day vacation to Denver for that. I have nothing to invest now though.

https://www.depositaccounts.com/banks/e ... html#rates
I doubt the penalty on the 120mo is only 90 days, and there's no further info on the webpage about how to open it or what the penalty is. It says under penalty, "3MO+", whatever that plus indicates. Unless someone gets the truth-in-savings disclosure which should list the penalty. It says contact a branch. The webpage also looks like about 2002.
We live in Colorado and called this morning and the 90 day penalty is valid for the 120 mo CD. We are going there this morning to open an account.
Is this only available to Colorado residents?

Julieta7
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Re: Best CD rates thread

Post by Julieta7 » Tue Nov 12, 2019 1:55 pm

I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.

nalor511
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Re: Best CD rates thread

Post by nalor511 » Tue Nov 12, 2019 2:15 pm

Julieta7 wrote:
Tue Nov 12, 2019 1:55 pm
I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.
Thank you for getting the info! That's not how CDs usually work, usually you can take out the interest at no penalty, and the penalty is on the principal if withdrawn early. You're right it's not a deal, thanks again for getting that info.

Julieta7
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Re: Best CD rates thread

Post by Julieta7 » Tue Nov 12, 2019 2:18 pm

nalor511 wrote:
Tue Nov 12, 2019 2:15 pm
Julieta7 wrote:
Tue Nov 12, 2019 1:55 pm
I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.
Thank you for getting the info! That's not how CDs usually work, usually you can take out the interest at no penalty, and the penalty is on the principal if withdrawn early. You're right it's not a deal, thanks again for getting that info.
The rep I spoke with said those 10 year CDs lend out the money for that time frame and so it is not in their interest to refund the CD early.

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indexfundfan
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Re: Best CD rates thread

Post by indexfundfan » Tue Nov 12, 2019 2:24 pm

Julieta7 wrote:
Tue Nov 12, 2019 1:55 pm
I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.
Thanks for clarifying. At least you caught this confusing detail. Someone else might have signed on the dotted line, without knowing the difference.
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4th and Inches
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Re: Best CD rates thread

Post by 4th and Inches » Tue Nov 12, 2019 2:30 pm

nalor511 wrote:
Tue Nov 12, 2019 2:15 pm
Julieta7 wrote:
Tue Nov 12, 2019 1:55 pm
I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.
Thank you for getting the info! That's not how CDs usually work, usually you can take out the interest at no penalty, and the penalty is on the principal if withdrawn early. You're right it's not a deal, thanks again for getting that info.
Whoa! I won't be doing that CD. Too good to be true.

pyld76
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Re: Best CD rates thread

Post by pyld76 » Tue Nov 12, 2019 2:35 pm

MikeG62 wrote:
Mon Nov 11, 2019 12:29 pm
pyld76 wrote:
Mon Nov 11, 2019 10:28 am

For those of us who have been members there for awhile, there are a number of recent reasons to question PSECU.
Would you care to color that comment with more specifics?
Sure.

They had an IT upgrade where they took old mainframe systems and replatform/refactored to something born this century. It wasn't smooth.

As mentioned, they are doing things like this CD deal rather than simply returning earnings (directly) to members.

I'm glad they are making folks whole who made the effort. I was far more appreciative when they shoveled the extra directly back to the existing membership, because it isn't as if they were going broke or dying doing so.

JM2
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Re: Best CD rates thread

Post by JM2 » Tue Nov 12, 2019 2:41 pm

Following up on this thread

I opened an account late last week and the rates dropped over the weekend before I was able to get funds to them.

I spoke to a rep on the phone this morning who confirmed they are honoring the old rates for accounts opened on 11/9 or prior until the end of November.

I was able to set up my 24 month CD @ 3% this morning (has to be done with a rep on the phone for the old rates).

Very happy with my PSECU customer service interactions, hold time was minimal which was impressive after a bank holiday. The online application was glitchy IMO and could use some upgrading.

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Kevin M
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Re: Best CD rates thread

Post by Kevin M » Tue Nov 12, 2019 2:54 pm

nalor511 wrote:
Tue Nov 12, 2019 2:15 pm
Julieta7 wrote:
Tue Nov 12, 2019 1:55 pm
I have more information about the CD in Colorado. We went in person to talk with them and the fine print is this:

If you choose to withdraw early from the 120 month CD you may ONLY withdraw the interest accrued. There will be a 90 day EWP on the interest you withdraw.

The caveat is that the principal must remain in the CD for 120 months.

So, this offer is "too good to be true".

Call them and ask for information if you are interested in 120 months. We are not going forward with this CD.
Thank you for getting the info! That's not how CDs usually work, usually you can take out the interest at no penalty, and the penalty is on the principal if withdrawn early.<snip>
Exactly. I've never heard of an "early withdrawal" option working like that--it's not really an early withdrawal option at all.
nalor511 wrote:
Tue Nov 12, 2019 2:15 pm
You're right it's not a deal, thanks again for getting that info.
Definitely not the deal we perceived it to be at first, but considering that the 10y Treasury yield is only 1.94%, A 10y CD at 3.37% provides a yield premium of 143 basis points, which is quite good. Of course the CD is unusually illiquid, so I'd put a big discount on the yield premium, as much of it should be considered an illiquidity premium.

I would not go for this even if I could, but someone who is concerned about reinvestment risk if yields remain low for a long time might consider it.

Kevin
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international001
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Re: Best CD rates thread

Post by international001 » Tue Nov 12, 2019 4:42 pm

pyld76 wrote:
Mon Nov 11, 2019 10:28 am
international001 wrote:
Mon Nov 11, 2019 8:35 am
travlinman561 wrote:
Sat Nov 09, 2019 7:55 pm
Saw on depositaccounts and psecu website new rates:

RATE CHANGE... new PSECU CD rates effective 5pm Eastern Time 11/9/19. 2yr @ 2.00% APY, 3yr @2.25% APY, 4yr @ 2.40% APY, 5yr @ 2.55% APY

I guess I will be sending my ira funds back to vanguard.
I don't understand. Didn't they say they would hold them till Nov 30th? How can you trust a bank that lies?
On what medium did they say those rates would be available until November 30th? It isn’t their website, which unambiguously states that “rates and information are subject to change at any time.” That language was there far prior to this rate and during the entirety of the time they offered it.

If a CSR told you they’d honor the rate for you and they don’t? It’s a question of trust. I haven’t seen a soul say that. What -has- been said is that someone on the internet claims a CSR told them that they thought the rates would run to 30-November. If you can point out where an actual representative of the CU said that, I’d love to see it. If they told you something different on the phone and didn’t honor that verbal commitment, I’d love to hear it.

Or, “cite the lie.” Some guy on the internet claiming X does not count.

For those of us who have been members there for awhile, there are a number of recent reasons to question PSECU. That there are folks on the internet unhappy about not being able to exploit a single product from a CU they weren’t already a member of doesn’t rise to that threshold.
I was told so when I talk to a representative. Of course, it may have been an unoffical statement. Still, I won't trust them again and wait to see things in writing.

huai
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Re: Best CD rates thread

Post by huai » Tue Nov 12, 2019 5:24 pm

What do you think better @ PSECU - the 24 or the 36 month CD? (Assumign they will honor old rate)

MikeG62
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Re: Best CD rates thread

Post by MikeG62 » Tue Nov 12, 2019 6:17 pm

huai wrote:
Tue Nov 12, 2019 5:24 pm
What do you think better @ PSECU - the 24 or the 36 month CD? (Assumign they will honor old rate)
The 36-month assuming you are ok tying up the funds for an additional 12 months.

Do/did you have an application in process or an account open as of Nov 9th?
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Julieta7
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Re: Best CD rates thread

Post by Julieta7 » Tue Nov 12, 2019 6:43 pm

Here is the fine print from the Equitable Savings & Loan Association 120 Month CD:


"TRANSACTION LIMITATIONS
Deposits to the account are not permitted.

Interest credited to the account during any term may be withdrawn at any time during such term without penalty. If the account is renewed at the same interest rate, earnings during the preceding term, as well as the current term, may be withdrawn at any time without penalty during the renewal term. If the renewal term interest rate is different, only earnings for the renewal term may be withdrawn at any time without penalty during such term.

"Withdrawals of principal before maturity may be permitted but the following early withdrawal penalties may be imposed.

PENALTY CLAUSE
In the event of any withdrawal of principal from the account prior to a maturity date, the accountholder shall forfeit an amount equal to 3 months of interest whether earned or not, on the amount withdrawn regardless of the length of time the funds withdrawn has remained in the account. The penalty is computed at the nominal (simple interest) rate being paid on the account. If the withdrawal subject to penalty occurs after 3 months from the opening date or last renewal date, whichever is the most recent, an additional penalty will be charged. This additional penalty will be equal to the earnings accrued to the date of withdrawal (less 3 months) minus earnings to the date of withdrawal (less 3 months) at the then current rate of the Regular Passbook (or similar) savings account.
Any withdrawal which reduces the account balance below the Minimum Balance Requirement, or any change in the term or Rate of Earnings, shall be considered as a withdrawal of the entire account balance and shall be subject to the penalty prescribed herein.

The penalty will not be imposed for withdrawal of principal following the death or adjudication of incompetence of any accountholder."

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Re: Best CD rates thread

Post by lazyday » Tue Nov 12, 2019 7:26 pm

Julieta7 wrote:
Tue Nov 12, 2019 6:43 pm
This additional penalty will be equal to the earnings accrued to the date of withdrawal (less 3 months) minus earnings to the date of withdrawal (less 3 months) at the then current rate of the Regular Passbook (or similar) savings account.
That’s odd. If interest rates rise so that the savings account rate is more than 3.37, then you can withdraw with only a 3 mo penalty, and the bank has to pay someone else a high rate to replace you. If interest rates fall, you would have to pay a high penalty to withdraw early, though the bank could replace you cheaply.

Only if rates stay the same does the penalty make sense to me. You lose the extra interest from using a CD instead of a savings account.

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Re: Best CD rates thread

Post by Kevin M » Tue Nov 12, 2019 8:54 pm

Julieta7 wrote:
Tue Nov 12, 2019 6:43 pm
Here is the fine print from the Equitable Savings & Loan Association 120 Month CD:

<snip>
Interest credited to the account during any term may be withdrawn at any time during such term without penalty.
OK, but that's not what you said the rep at the local branch told you. You said the rep told you that the EWP was charged on the interest withdrawn.
If the account is renewed at the same interest rate, earnings during the preceding term, as well as the current term, may be withdrawn at any time without penalty during the renewal term. If the renewal term interest rate is different, only earnings for the renewal term may be withdrawn at any time without penalty during such term.
This one is kind of weird, but not really relevant now if we're talking about opening up a new CD.
"Withdrawals of principal before maturity may be permitted but the following early withdrawal penalties may be imposed.
Again, not what you told us the local branch rep said, which was that no withdrawals of principal are allowed at all.
In the event of any withdrawal of principal from the account prior to a maturity date, the accountholder shall forfeit an amount equal to 3 months of interest whether earned or not, on the amount withdrawn regardless of the length of time the funds withdrawn has remained in the account.
OK, so far so good--this is typical.
If the withdrawal subject to penalty occurs after 3 months from the opening date or last renewal date, whichever is the most recent, an additional penalty will be charged. This additional penalty will be equal to the earnings accrued to the date of withdrawal (less 3 months) minus earnings to the date of withdrawal (less 3 months) at the then current rate of the Regular Passbook (or similar) savings account.
And this pretty much contradicts the previous statement, except for a narrow window after opening (or renewing) the CD, and is a very bizarre EWP. It's completely unknowable in advance. If this S&L has a history of very low savings account rates, then the penalty is likely to be draconian.
Any withdrawal which reduces the account balance below the Minimum Balance Requirement, or any change in the term or Rate of Earnings, shall be considered as a withdrawal of the entire account balance and shall be subject to the penalty prescribed herein.
What is the minimum balance requirement (MBR), and what's the point of this clause unless there is no penalty if a withdrawal does not reduce the account balance below the MBR?
The penalty will not be imposed for withdrawal of principal following the death or adjudication of incompetence of any accountholder."
This is pretty typical.

This is one of the most poorly written and confusing early withdrawal disclosures I've ever read. I'm still not sure I understand it exactly, but if I am understanding it, I would never buy this CD unless I simply planned to hold it to maturity, which is my approach with brokered CDs (due to high bid/ask spreads).

Kevin
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HEDGEFUNDIE
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Re: Best CD rates thread

Post by HEDGEFUNDIE » Tue Nov 12, 2019 9:13 pm

For CA residents, a 5-month 5% APY CD, $25k max

https://www.ccu.com/personal/accounts/certificates

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Kevin M
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Re: Best CD rates thread

Post by Kevin M » Tue Nov 12, 2019 9:25 pm

HEDGEFUNDIE wrote:
Tue Nov 12, 2019 9:13 pm
For CA residents, a 5-month 5% APY CD, $25k max

https://www.ccu.com/personal/accounts/certificates
Looks like field of membership is more restrictive than just CA. When I start the join process, for eligibility I see "I live or work in San Diego, Riverside, or Orange county, or ...", "I live in California and I am a(n)" (employee or member of one of 11 schools or organizations, none of which will work for most people), or, "A family member is a California Credit Union or North Island Credit Union Member".

Did I miss something (it happens)?

Kevin
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Re: Best CD rates thread

Post by HEDGEFUNDIE » Tue Nov 12, 2019 9:27 pm

Kevin M wrote:
Tue Nov 12, 2019 9:25 pm
HEDGEFUNDIE wrote:
Tue Nov 12, 2019 9:13 pm
For CA residents, a 5-month 5% APY CD, $25k max

https://www.ccu.com/personal/accounts/certificates
Looks like field of membership is more restrictive than just CA. When I start the join process, for eligibility I see "I live or work in San Diego, Riverside, or Orange county, or ...", "I live in California and I am a(n)" (employee or member of one of 11 schools or organizations, none of which will work for most people), or, "A family member is a California Credit Union or North Island Credit Union Member".

Did I miss something (it happens)?

Kevin
“I live in California and I am an...”
“Alumni Association Member”

I assume that anyone chasing CD deals is a member of (or can easily join) one of their schools’ alumni associations.

nalor511
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Re: Best CD rates thread

Post by nalor511 » Tue Nov 12, 2019 10:31 pm

Max additional return over the PSECU 3.35% interest rate on 25000 for 5 months at 5% at CCU is $171, hardly worth the hoops joining CCU for that, IMO

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Re: Best CD rates thread

Post by HEDGEFUNDIE » Tue Nov 12, 2019 10:37 pm

nalor511 wrote:
Tue Nov 12, 2019 10:31 pm
Max additional return over the PSECU 3.35% interest rate on 25000 for 5 months at 5% at CCU is $171, hardly worth the hoops joining CCU for that, IMO
1. PSECU deal is dead
2. Literally no hoops required for CCU. There is no verification of alumni association membership nor PTA membership.

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Re: Best CD rates thread

Post by Julieta7 » Wed Nov 13, 2019 10:03 am

Kevin M wrote:
Tue Nov 12, 2019 8:54 pm
Julieta7 wrote:
Tue Nov 12, 2019 6:43 pm
Here is the fine print from the Equitable Savings & Loan Association 120 Month CD:

<snip>
Interest credited to the account during any term may be withdrawn at any time during such term without penalty.
OK, but that's not what you said the rep at the local branch told you. You said the rep told you that the EWP was charged on the interest withdrawn.
If the account is renewed at the same interest rate, earnings during the preceding term, as well as the current term, may be withdrawn at any time without penalty during the renewal term. If the renewal term interest rate is different, only earnings for the renewal term may be withdrawn at any time without penalty during such term.
This one is kind of weird, but not really relevant now if we're talking about opening up a new CD.
"Withdrawals of principal before maturity may be permitted but the following early withdrawal penalties may be imposed.
Again, not what you told us the local branch rep said, which was that no withdrawals of principal are allowed at all.
In the event of any withdrawal of principal from the account prior to a maturity date, the accountholder shall forfeit an amount equal to 3 months of interest whether earned or not, on the amount withdrawn regardless of the length of time the funds withdrawn has remained in the account.
OK, so far so good--this is typical.
If the withdrawal subject to penalty occurs after 3 months from the opening date or last renewal date, whichever is the most recent, an additional penalty will be charged. This additional penalty will be equal to the earnings accrued to the date of withdrawal (less 3 months) minus earnings to the date of withdrawal (less 3 months) at the then current rate of the Regular Passbook (or similar) savings account.
And this pretty much contradicts the previous statement, except for a narrow window after opening (or renewing) the CD, and is a very bizarre EWP. It's completely unknowable in advance. If this S&L has a history of very low savings account rates, then the penalty is likely to be draconian.
Any withdrawal which reduces the account balance below the Minimum Balance Requirement, or any change in the term or Rate of Earnings, shall be considered as a withdrawal of the entire account balance and shall be subject to the penalty prescribed herein.
What is the minimum balance requirement (MBR), and what's the point of this clause unless there is no penalty if a withdrawal does not reduce the account balance below the MBR?
The penalty will not be imposed for withdrawal of principal following the death or adjudication of incompetence of any accountholder."
This is pretty typical.

This is one of the most poorly written and confusing early withdrawal disclosures I've ever read. I'm still not sure I understand it exactly, but if I am understanding it, I would never buy this CD unless I simply planned to hold it to maturity, which is my approach with brokered CDs (due to high bid/ask spreads).

Kevin
Kevin, your comments are spot on! The rep said she did not understand the terms and was confused, too! All I am trying to do here is provide the comments from the CU rep and the terms as written. I agree with you, I would never buy this CD unless I planned to hold it to maturity.

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Re: Best CD rates thread

Post by Kevin M » Wed Nov 13, 2019 2:37 pm

HEDGEFUNDIE wrote:
Tue Nov 12, 2019 10:37 pm
nalor511 wrote:
Tue Nov 12, 2019 10:31 pm
Max additional return over the PSECU 3.35% interest rate on 25000 for 5 months at 5% at CCU is $171, hardly worth the hoops joining CCU for that, IMO
1. PSECU deal is dead
2. Literally no hoops required for CCU. There is no verification of alumni association membership nor PTA membership.
Thanks for letting us know that it's easy for anyone to join.

For me the premium would be 5% for five months relative to a 2.5% savings account (guaranteed through Jan 2021). I estimate a pre-tax premium of about $260, and after-tax premium of about $169.

On second thought, based on the letter that some have received, the PSECU deal is not dead for current members until after Nov 30, and I'm thinking about selling some shares of intermediate-term and/or long-term CA tax-exempt bond fund to put into another 3-year CD (much more than $25K). My TEY for the intermediate-term fund, duration = 4.8 years, is 2.23% and for the long-term fund, duration = 6.1 years, it's 2.75%. So to the extent I want to reduce term risk and credit risk, the 3-year CD at 3.25% is attractive. The CD has some liquidity risk, but the early withdrawal penalty (EWP) of 180 days of interest caps the downside at about 1.63% (=3.25% / 2).

Still, here we're talking about a limited amount, $25K max, for five months vs. potentially much larger amount for two or three years, so not directly comparable. So if I were to pursue the 5-month CD deal, I'd think of it as an addition to the 5-month rung of my individual fixed-income ladder, for which I currently have about $25K maturing in 4.6-5.6 months.

Another consideration for those of us using the add-on feature for our existing PSECU CDs is that we want cash available to fund the monthly additions, which in my case are $10K into each of two CDs (2-year and 3-year). So I need to consider that in locking up $25K for five months.

Kevin
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Re: Best CD rates thread

Post by Utvolfan1 » Wed Nov 13, 2019 5:52 pm

Just wanted to confirm that PSECU will honor last month’s CD rates as per the email I posted from them. Your account had to be established by November 9th. You do have to talk to them over the phone. I successfully purchased a three year CD at the 3.25 APY.

I just want to recognize their excellent customer service. They didn’t have to extend the rates, but they did. Also, the customer service reps were extremely pleasant over the phone. It’s a pleasure to get good service these days.

Best Regards to all.

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Re: Best CD rates thread

Post by Lloydo » Wed Nov 13, 2019 6:13 pm

My IRA transfer from Vanguard (all handled via fax without notary) was received today and the account was set up honoring the 3.2% rate.

L

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Re: Best CD rates thread

Post by RetireBy55 » Wed Nov 13, 2019 6:45 pm

Utvolfan1 wrote:
Wed Nov 13, 2019 5:52 pm
Just wanted to confirm that PSECU will honor last month’s CD rates as per the email I posted from them. Your account had to be established by November 9th. You do have to talk to them over the phone. I successfully purchased a three year CD at the 3.25 APY.

I just want to recognize their excellent customer service. They didn’t have to extend the rates, but they did. Also, the customer service reps were extremely pleasant over the phone. It’s a pleasure to get good service these days.

Best Regards to all.
Same here..I successfully opened a 3-year, 3.2% APR Certificate yesterday and you do need to call in. It initially opens at the lower(2.3%?) rate, and the "back office" needs to then update it to the promo / higher rate.

Kudos to PSECU for doing the right thing and honoring the promo rates. We all know "rates can change at any time" in general, but I did have several PSECU reps tell me over the past week or so that the rates were 'guaranteed' until 11/30 which was surprising as most every CU will always give the standard disclaimer about rates being subject to change anytime you ask..(I really did panic a bit Friday night when I saw the rates drop after conversations with PSECU reps earlier in the week who assured me things would be good until 11/30..yikes!)

I wouldn't be surprised if they did intend to have the promo rates available until 11/30 and then were totally slammed by new applications and had a huge influx of cash..but then again, that'd be fairly easy to anticipate in this rate environment also..

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Re: Best CD rates thread

Post by mortfree » Wed Nov 13, 2019 6:50 pm

As a long time PSECU member I just hope they are doing the right thing by expanding memberships to a broader base, recent CD promo offers, etc. and that it won’t be the death of them.

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Re: Best CD rates thread

Post by Kevin M » Wed Nov 13, 2019 7:56 pm

Utvolfan1 wrote:
Wed Nov 13, 2019 5:52 pm
Just wanted to confirm that PSECU will honor last month’s CD rates as per the email I posted from them. Your account had to be established by November 9th.
That's not what the letter that folks have shared says, which is, "We will honor current rates for 24-month certificate and 36-month certificate requests for new membership applications submitted before November 9 at 5 p.m."

My friend has been told multiple times that he will get the promo rate. His application was submitted by the deadline, but his account has not been opened yet.

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Re: Best CD rates thread

Post by Kevin M » Wed Nov 13, 2019 8:38 pm

Kevin M wrote:
Wed Nov 13, 2019 2:37 pm
HEDGEFUNDIE wrote:
Tue Nov 12, 2019 10:37 pm
nalor511 wrote:
Tue Nov 12, 2019 10:31 pm
Max additional return over the PSECU 3.35% interest rate on 25000 for 5 months at 5% at CCU is $171, hardly worth the hoops joining CCU for that, IMO
1. PSECU deal is dead
2. Literally no hoops required for CCU. There is no verification of alumni association membership nor PTA membership.
Thanks for letting us know that it's easy for anyone to join.

For me the premium would be 5% for five months relative to a 2.5% savings account (guaranteed through Jan 2021). I estimate a pre-tax premium of about $260, and after-tax premium of about $169.
<snip>
Another way to frame it is to think of it as a reward checking account (RCA), with a typical balance cap but without the monthly hoops, that lowers it's rate to an unacceptable level after five months.

Currently I have an RCA at Heritage Bank that earns 3.33% on up to $25K. If I found one that earned 5% on up to $25K, I'd probably open the account and start using it instead of my current RCA. Then if they dropped the rate below 3.33%, I'd switch back to Heritage Bank RCA.

The key differences here are that we know that the rate will drop after five months (with RCAs you never know), but on the plus side there are no monthly hoops.

If there truly are no hoops to join, it should take less than 30 minutes to open the account and transfer the money in. Maybe add on another 30 minutes to do whatever it takes to be able to quickly transfer the money back out. Not bad for about $260 (about $170 after tax). Of course one remaining downside is having yet another account to track and manage, so a little additional time for that as well.

Has anyone grabbed one of these CDs yet? Any issues? Is it quick and easy to fund the CD?

Kevin
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Re: Best CD rates thread

Post by pyld76 » Thu Nov 14, 2019 8:41 pm

international001 wrote:
Tue Nov 12, 2019 4:42 pm
pyld76 wrote:
Mon Nov 11, 2019 10:28 am
international001 wrote:
Mon Nov 11, 2019 8:35 am
travlinman561 wrote:
Sat Nov 09, 2019 7:55 pm
Saw on depositaccounts and psecu website new rates:

RATE CHANGE... new PSECU CD rates effective 5pm Eastern Time 11/9/19. 2yr @ 2.00% APY, 3yr @2.25% APY, 4yr @ 2.40% APY, 5yr @ 2.55% APY

I guess I will be sending my ira funds back to vanguard.
I don't understand. Didn't they say they would hold them till Nov 30th? How can you trust a bank that lies?
On what medium did they say those rates would be available until November 30th? It isn’t their website, which unambiguously states that “rates and information are subject to change at any time.” That language was there far prior to this rate and during the entirety of the time they offered it.

If a CSR told you they’d honor the rate for you and they don’t? It’s a question of trust. I haven’t seen a soul say that. What -has- been said is that someone on the internet claims a CSR told them that they thought the rates would run to 30-November. If you can point out where an actual representative of the CU said that, I’d love to see it. If they told you something different on the phone and didn’t honor that verbal commitment, I’d love to hear it.

Or, “cite the lie.” Some guy on the internet claiming X does not count.

For those of us who have been members there for awhile, there are a number of recent reasons to question PSECU. That there are folks on the internet unhappy about not being able to exploit a single product from a CU they weren’t already a member of doesn’t rise to that threshold.
I was told so when I talk to a representative. Of course, it may have been an unoffical statement. Still, I won't trust them again and wait to see things in writing.
So, they honored it, right?

I’m wagering if they throw a deal like this again you’ll find sudden faith. Presumably,you’ll also be a member, so getting the deal will be several factors of magnitude less dramatic.

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Re: Best CD rates thread

Post by HEDGEFUNDIE » Thu Nov 14, 2019 8:50 pm

Kevin M wrote:
Wed Nov 13, 2019 8:38 pm
Kevin M wrote:
Wed Nov 13, 2019 2:37 pm
HEDGEFUNDIE wrote:
Tue Nov 12, 2019 10:37 pm
nalor511 wrote:
Tue Nov 12, 2019 10:31 pm
Max additional return over the PSECU 3.35% interest rate on 25000 for 5 months at 5% at CCU is $171, hardly worth the hoops joining CCU for that, IMO
1. PSECU deal is dead
2. Literally no hoops required for CCU. There is no verification of alumni association membership nor PTA membership.
Thanks for letting us know that it's easy for anyone to join.

For me the premium would be 5% for five months relative to a 2.5% savings account (guaranteed through Jan 2021). I estimate a pre-tax premium of about $260, and after-tax premium of about $169.
<snip>
Another way to frame it is to think of it as a reward checking account (RCA), with a typical balance cap but without the monthly hoops, that lowers it's rate to an unacceptable level after five months.

Currently I have an RCA at Heritage Bank that earns 3.33% on up to $25K. If I found one that earned 5% on up to $25K, I'd probably open the account and start using it instead of my current RCA. Then if they dropped the rate below 3.33%, I'd switch back to Heritage Bank RCA.

The key differences here are that we know that the rate will drop after five months (with RCAs you never know), but on the plus side there are no monthly hoops.

If there truly are no hoops to join, it should take less than 30 minutes to open the account and transfer the money in. Maybe add on another 30 minutes to do whatever it takes to be able to quickly transfer the money back out. Not bad for about $260 (about $170 after tax). Of course one remaining downside is having yet another account to track and manage, so a little additional time for that as well.

Has anyone grabbed one of these CDs yet? Any issues? Is it quick and easy to fund the CD?

Kevin
I will be funding one next week.

In the meantime, I also have an RCA with Orion FCU paying 4% APY up to $30k

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Re: Best CD rates thread

Post by Ricchan » Thu Nov 14, 2019 11:24 pm

HEDGEFUNDIE wrote:
Thu Nov 14, 2019 8:50 pm
In the meantime, I also have an RCA with Orion FCU paying 4% APY up to $30k
What's the easiest way you've found to fulfill the 8 signature-based card transactions requirement? Can it be automated, and can all 8 be performed on the same day?

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Re: Best CD rates thread

Post by HEDGEFUNDIE » Thu Nov 14, 2019 11:34 pm

Ricchan wrote:
Thu Nov 14, 2019 11:24 pm
HEDGEFUNDIE wrote:
Thu Nov 14, 2019 8:50 pm
In the meantime, I also have an RCA with Orion FCU paying 4% APY up to $30k
What's the easiest way you've found to fulfill the 8 signature-based card transactions requirement? Can it be automated, and can all 8 be performed on the same day?
The old fashioned way. I generally spend at least 8 times on small purchases in stores.

If I needed filler transactions I just buy small household goods on amazon or make small online donations that I would have made anyway.

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Re: Best CD rates thread

Post by international001 » Thu Nov 14, 2019 11:49 pm

pyld76 wrote:
Thu Nov 14, 2019 8:41 pm

So, they honored it, right?

I’m wagering if they throw a deal like this again you’ll find sudden faith. Presumably,you’ll also be a member, so getting the deal will be several factors of magnitude less dramatic.
I was told the promotional rates would be good till the end of November

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Re: Best CD rates thread

Post by SlowMovingInvestor » Fri Nov 15, 2019 8:34 am

international001 wrote:
Thu Nov 14, 2019 11:49 pm
pyld76 wrote:
Thu Nov 14, 2019 8:41 pm

So, they honored it, right?

I’m wagering if they throw a deal like this again you’ll find sudden faith. Presumably,you’ll also be a member, so getting the deal will be several factors of magnitude less dramatic.
I was told the promotional rates would be good till the end of November
That may have been their original intent, but it seems like they were overwhelmed by a barrage of money. They made no formal commitment, and obviously the health of the institution and the needs of it's current members should take precedence over 'hot money' that'll likely flow out once the CDs end.

Personally, I think PSECU has conducted itself very well.

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Re: Best CD rates thread

Post by indexfundfan » Fri Nov 15, 2019 8:57 am

SlowMovingInvestor wrote:
Fri Nov 15, 2019 8:34 am
international001 wrote:
Thu Nov 14, 2019 11:49 pm
pyld76 wrote:
Thu Nov 14, 2019 8:41 pm

So, they honored it, right?

I’m wagering if they throw a deal like this again you’ll find sudden faith. Presumably,you’ll also be a member, so getting the deal will be several factors of magnitude less dramatic.
I was told the promotional rates would be good till the end of November
That may have been their original intent, but it seems like they were overwhelmed by a barrage of money. They made no formal commitment, and obviously the health of the institution and the needs of it's current members should take precedence over 'hot money' that'll likely flow out once the CDs end.

Personally, I think PSECU has conducted itself very well.
Their quoted rates are also accompanied by "Rates and information are subject to change at any time".
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Re: Best CD rates thread

Post by Samaitch » Fri Nov 15, 2019 1:33 pm

I spoke to psecu this morning. They will honor the old rates so long as you transfer the money before the end of the month. They told me to call them to purchase the CD. I'm working on it right now.

BTW what's the best way to get funds out of psecu? I don't see an online wire option.

Thanks

Sam H

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Re: Best CD rates thread

Post by Kevin M » Fri Nov 15, 2019 3:49 pm

Samaitch wrote:
Fri Nov 15, 2019 1:33 pm
I spoke to psecu this morning. They will honor the old rates so long as you transfer the money before the end of the month. They told me to call them to purchase the CD. I'm working on it right now.

BTW what's the best way to get funds out of psecu? I don't see an online wire option.

Thanks

Sam H
As with most credit unions, the transfer limits for transfers initiated at PSECU are quite low, so you'll want to connect PSECU as an external account at your bank or brokerage with high ACH limits.

Set the CD to deposit proceeds into savings or checking at maturity, then initiate an ACH transfer from your bank or brokerage to pull the money out of PSECU.

Kevin
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Re: Best CD rates thread

Post by Samaitch » Sat Nov 16, 2019 2:50 am

Thanks Kevin. CDs are set to roll into Checking. I'm in process of linking to Schwab. And oh the 36 mo CD purchase with 3.25% is in. With monthly add-on. Pretty smooth.

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Re: Best CD rates thread

Post by tigreblanco » Sat Nov 16, 2019 8:39 am

Samaitch wrote:
Fri Nov 15, 2019 1:33 pm
I spoke to psecu this morning. They will honor the old rates so long as you transfer the money before the end of the month. They told me to call them to purchase the CD. I'm working on it right now.

BTW what's the best way to get funds out of psecu? I don't see an online wire option.

Thanks

Sam H
Confirming this. If anyone initiated the account application process on or before 11/9, PSECU will honor the CD rates posted on that day. I received an email from PSECU to that affect earlier this week. Account set-up is challenging, but doable. Getting wire moneys into PSECU will likely take another few days.

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Re: Best CD rates thread

Post by RetireBy55 » Sun Nov 17, 2019 10:49 am

Samaitch wrote:
Fri Nov 15, 2019 1:33 pm
BTW what's the best way to get funds out of psecu? I don't see an online wire option.
I asked PSECU about getting $$ back out just this week. They do have the ability to send outgoing wires, for a $10 fee - which I find reasonable compared to many others (eg: Ally at 2X that).

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Re: Best CD rates thread

Post by Kevin M » Sun Nov 17, 2019 2:08 pm

RetireBy55 wrote:
Sun Nov 17, 2019 10:49 am
Samaitch wrote:
Fri Nov 15, 2019 1:33 pm
BTW what's the best way to get funds out of psecu? I don't see an online wire option.
I asked PSECU about getting $$ back out just this week. They do have the ability to send outgoing wires, for a $10 fee - which I find reasonable compared to many others (eg: Ally at 2X that).
Good to know. This could make sense if you lose more than $10 of interest during an ACH transfer initiated from an external account.

Note that if you withdraw money from PSECU by buying shares of a money market fund at Vanguard, specifying your PSECU account as the source, you probably will start earning interest on the fund before the money comes out of your PSECU account, so this might be cheaper than a wire. You probably could safely buy the MM fund shares the day before the CD matures, start earning interest the next trading day (T+1), and the money would come out of PSECU on T+2 or T+3.

Kevin
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Re: Best CD rates thread

Post by indexfundfan » Sun Nov 17, 2019 2:28 pm

Kevin M wrote:
Sun Nov 17, 2019 2:08 pm

Note that if you withdraw money from PSECU by buying shares of a money market fund at Vanguard, specifying your PSECU account as the source, you probably will start earning interest on the fund before the money comes out of your PSECU account, so this might be cheaper than a wire. You probably could safely buy the MM fund shares the day before the CD matures, start earning interest the next trading day (T+1), and the money would come out of PSECU on T+2 or T+3.

Kevin
Wouldn't work. Vanguard MMFs start earning interest the day after the trade date, which is also the day the money is deducted from the bank account.
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Re: Best CD rates thread

Post by the way » Sun Nov 17, 2019 3:45 pm

Kevin M wrote:
Tue Nov 12, 2019 8:54 pm
This additional penalty will be equal to the earnings accrued to the date of withdrawal (less 3 months) minus earnings to the date of withdrawal (less 3 months) at the then current rate of the Regular Passbook (or similar) savings account.
And this pretty much contradicts the previous statement, except for a narrow window after opening (or renewing) the CD, and is a very bizarre EWP. It's completely unknowable in advance. If this S&L has a history of very low savings account rates, then the penalty is likely to be draconian.
But if the rate climbs to say 5%, their poor wording works in your favor - i.e. the penalty becomes negative!

Example: You buy now and collect the 3.37% for 10 years. The savings rate slowly climbs and a month before maturity it is at 5%. You do an early withdrawal and they have to pay you the difference (minus the 3 months) effectively giving you a 10 year 5% CD! :mrgreen:

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Re: Best CD rates thread

Post by Kevin M » Sun Nov 17, 2019 4:27 pm

indexfundfan wrote:
Sun Nov 17, 2019 2:28 pm
Kevin M wrote:
Sun Nov 17, 2019 2:08 pm

Note that if you withdraw money from PSECU by buying shares of a money market fund at Vanguard, specifying your PSECU account as the source, you probably will start earning interest on the fund before the money comes out of your PSECU account, so this might be cheaper than a wire. You probably could safely buy the MM fund shares the day before the CD matures, start earning interest the next trading day (T+1), and the money would come out of PSECU on T+2 or T+3.

Kevin
Wouldn't work. Vanguard MMFs start earning interest the day after the trade date, which is also the day the money is deducted from the bank account.
You're saying that the money comes out of the bank/CU account on T+1. If so, it would still eliminate any days of lost interest if you place the trade the day before the CD matures, but I guess there is the possibility that the withdrawal hits the PSECU account before the CD proceeds hit it.

I think at least sometimes the money doesn't come out of the bank/CU account until T+2. I haven't tested a buy at Vanguard with the money coming from PSECU yet.

Kevin
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Re: Best CD rates thread

Post by indexfundfan » Sun Nov 17, 2019 4:57 pm

Kevin M wrote:
Sun Nov 17, 2019 4:27 pm
indexfundfan wrote:
Sun Nov 17, 2019 2:28 pm
Kevin M wrote:
Sun Nov 17, 2019 2:08 pm

Note that if you withdraw money from PSECU by buying shares of a money market fund at Vanguard, specifying your PSECU account as the source, you probably will start earning interest on the fund before the money comes out of your PSECU account, so this might be cheaper than a wire. You probably could safely buy the MM fund shares the day before the CD matures, start earning interest the next trading day (T+1), and the money would come out of PSECU on T+2 or T+3.

Kevin
Wouldn't work. Vanguard MMFs start earning interest the day after the trade date, which is also the day the money is deducted from the bank account.
You're saying that the money comes out of the bank/CU account on T+1. If so, it would still eliminate any days of lost interest if you place the trade the day before the CD matures, but I guess there is the possibility that the withdrawal hits the PSECU account before the CD proceeds hit it.

I think at least sometimes the money doesn't come out of the bank/CU account until T+2. I haven't tested a buy at Vanguard with the money coming from PSECU yet.

Kevin
If you purchase a Vanguard fund from Vanguard using a bank as a funding source, my experience is that the ACH deduction happens on day T+1, consistently.

It is not clear at this point when the money from a matured CD at PSECU will be credited to the checking/savings account.
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Re: Best CD rates thread

Post by SlowMovingInvestor » Sun Nov 17, 2019 5:14 pm

Kevin M wrote:
Mon Nov 11, 2019 7:14 pm
SlowMovingInvestor wrote:
Mon Nov 11, 2019 6:52 pm
I mentioned this before, but let me do so again

https://www.salliemae.com/banking/certi ... -learnmore

Any comment on the 2.35% 1 year rate at Sallie Mae ? Sounds pretty good to me, better than Capital One's 2.20% CD.
It is competitive--shows up in 3rd place on DA for 1-year CDs for my "region". If I expand to any state, there are many CDs at higher rates, so a good idea to comb through those to see if any are available to you. Note that the PSECU CDs were not shown as nationally available for some time after they became so.

For comparison, 1y Treasury yield is 1.58%, so CD yields is 77 basis points higher--not bad, but not spectacular. Looks like a brokered CD is in the 1.65% ballpark, the 2.35% CD is a good deal compared to that too.

Of no interest to me, due to my local bank 2.5% savings account guaranteed through Jan 2021, my 3.5% add-on 5-year CD that still has lots of room for additional deposits, and my 3.00% and 3.25% PSECU CDs that I'll be adding to monthly, but for those who don't have such alternatives, it's worth considering.

Kevin
And just like that, Sallie Mae's 2.35% is gone, down to 2.1% . It seems like it was in place barely a week :(

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