NFCU Certificate Rates Drop Again

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tomd37
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NFCU Certificate Rates Drop Again

Post by tomd37 »

In my view Navy Federal CU has been a leader in CD rates. However they too are slowly reducing their certificate APY rates. I noticed today that they recently reduced their one-year APY from 0.90% to 0.80%. The other two financial institutions where I had one-year CDs were Live Oak Bank and Synchrony Bank, both of whom have reduced their one-year APY to 0.60%. Live Oak Bank right now has the best (for me) high-yield savings rate at 0.70% APY. I prefer not to go outside these three financial institutions.
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David Jay
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Re: NFCU Certificate Rates Drop Again

Post by David Jay »

And we are not done with the trend...
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sport
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Re: NFCU Certificate Rates Drop Again

Post by sport »

Unless you need the cash in one year, why not consider 2 or 3 year CDs instead of the 1 year maturity? The rates should be a little higher and there is little indication that rates will be rising any time soon.
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tomd37
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Re: NFCU Certificate Rates Drop Again

Post by tomd37 »

Sport - I've been using the recent maturing certificates to fill up two add-on up to $75K NFCU 17-month certificates offered in January at 2.25% APY. They are full now so I am down to 0.80% if I want to keep my ladder going. May go to investing more in our taxable investment account in the total stock market index fund (VTSAX) as these remaining certificates mature.
Tom D.
sport
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Re: NFCU Certificate Rates Drop Again

Post by sport »

tomd37 wrote: Sat Oct 10, 2020 4:42 pm May go to investing more in our taxable investment account in the total stock market index fund (VTSAX) as these remaining certificates mature.
Tom,
This would defeat the purpose of holding CDs in the first place. With the market setting new highs, it does not seem to be the right time to make your allocation riskier. IMO, it would make more sense to disrupt your ladder and take advantage of the higher rates (such as they are) for a little longer term on the CDs as they mature. You probably would not be very happy if you tried to avoid a low interest rate, put the money in VTSAX, and then have it lose 20% or so.
MikeG62
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Re: NFCU Certificate Rates Drop Again

Post by MikeG62 »

tomd37 wrote: Sat Oct 10, 2020 1:23 pm In my view Navy Federal CU has been a leader in CD rates. However they too are slowly reducing their certificate APY rates. I noticed today that they recently reduced their one-year APY from 0.90% to 0.80%. The other two financial institutions where I had one-year CDs were Live Oak Bank and Synchrony Bank, both of whom have reduced their one-year APY to 0.60%. Live Oak Bank right now has the best (for me) high-yield savings rate at 0.70% APY. I prefer not to go outside these three financial institutions.
Since you are at NFCU you must either be military or retired military (or honorable discharge) or have an immediate family member who is. Assuming that is right, you may want to consider Barksdale Federal CU.

https://www.bfcu.org/home/deposit-rates#cert-rates

Sadly, their CD rates have dropped just the other day, but yields better than NFCU. Incremental yield may (or may not) be worth the bother. Depends on how much you'd be investing.
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Fishing50
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Re: NFCU Certificate Rates Drop Again

Post by Fishing50 »

sport wrote: Sat Oct 10, 2020 5:24 pm
tomd37 wrote: Sat Oct 10, 2020 4:42 pm May go to investing more in our taxable investment account in the total stock market index fund (VTSAX) as these remaining certificates mature.
Tom,
This would defeat the purpose of holding CDs in the first place. With the market setting new highs, it does not seem to be the right time to make your allocation riskier. IMO, it would make more sense to disrupt your ladder and take advantage of the higher rates (such as they are) for a little longer term on the CDs as they mature. You probably would not be very happy if you tried to avoid a low interest rate, put the money in VTSAX, and then have it lose 20% or so.
Tom- Maybe you have enough in CDs.
More VTSAX is ok, some tax loss harvesting probably isn’t a life changing event.
Over 80yrs old you have access to your entire portfolio.
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2yrs from military pension. 80 equites / 20 bonds for life, ZERO emergency fund, 100% taxable in equities (dividends in cash), 33% taxable, 30% Roth, 37% tax deferred. | Gone Fishing At 52yrs old!
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tomd37
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Re: NFCU Certificate Rates Drop Again

Post by tomd37 »

We are in the fortunate position where our QCDs/RMDs and other income is in excess of our annual budgetary needs and we built a ladder of CDs to cover any unexpected needs that might arise. Now that ladder amount results in a too high amount and I feel an additional investment in VTSAX is warranted for the future along with continued Roth conversions up to the first IRMAA level. We are invested in a 40/60 stock/bond allocation of two funds (VTSAX and VBILX) and will probably remain there. I feel we are adequately covered with our long-term care insurance should that need arise so that takes some possible pressure off in the future. Thanks to all for the comments thus far.
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VictoriaF
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Re: NFCU Certificate Rates Drop Again

Post by VictoriaF »

When I visited an NFCU branch to deposit some checks, the customer service representative suggested that there will be good rates in the beginning of the year. Obviously, this is not certain, but I am saving my cash until January-February.

Victoria
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tomd37
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Re: NFCU Certificate Rates Drop Again

Post by tomd37 »

Thanks for the heads-up Victoria. It was January or February of this year that NFCU offered an special add-on up to $75,000, 2.25% APY 17-month certificate. I opened one for both myself and my wife and have been adding to them (now maxed out) as my 12-month ladder of certificates matured. :moneybag Have been with NFCU since 1961.
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Re: NFCU Certificate Rates Drop Again

Post by UpperNwGuy »

VictoriaF wrote: Mon Oct 12, 2020 10:21 am When I visited an NFCU branch to deposit some checks, the customer service representative suggested that there will be good rates in the beginning of the year. Obviously, this is not certain, but I am saving my cash until January-February.
You could park that cash in PenFed's high yield savings between now and January-February.
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VictoriaF
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Re: NFCU Certificate Rates Drop Again

Post by VictoriaF »

UpperNwGuy wrote: Mon Oct 12, 2020 11:41 am
VictoriaF wrote: Mon Oct 12, 2020 10:21 am When I visited an NFCU branch to deposit some checks, the customer service representative suggested that there will be good rates in the beginning of the year. Obviously, this is not certain, but I am saving my cash until January-February.
You could park that cash in PenFed's high yield savings between now and January-February.
I have been ignoring PenFed's savings rate and now checked them out. As of today, PenFed is paying 0.6%, which is the same as my Ally savings account. In the future I'll be comparing them. Thank you for the idea,

Victoria
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MikeG62
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Re: NFCU Certificate Rates Drop Again

Post by MikeG62 »

VictoriaF wrote: Mon Oct 12, 2020 10:21 am When I visited an NFCU branch to deposit some checks, the customer service representative suggested that there will be good rates in the beginning of the year. Obviously, this is not certain, but I am saving my cash until January-February.

Victoria
That would be great if it happens. Thanks for posting this. I'll be sure to keep my eyes open for any rate changes at NFCU. I have two CD's with them (one taxable and one tax deferred/IRA). Very easy to work with. A real quality organization.
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Dude2
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Re: NFCU Certificate Rates Drop Again

Post by Dude2 »

^^^ Yes, I know that for two years in a row they have offered great deals at the beginning of the year. I think this is a means to try to capture people's Roth/TIRA money.
Great deal 2019 was 3.68% for 40 mo and cash incentive to open new TIRA or Roth (couple of hundred I believe).
Great deal 2020 was 2.96 for 37 mo, etc.

Hopefully great deal 2021 will be ? in the high 1's? It would still be a good deal even though it keeps seeming less and less so.

The beauty for the ones from 2019 and 2020 was that you could keep adding to them up to $150k each.

Also, members with Direct Deposit into their accounts are eligible for the Special Easy Start Certificate (although maximum only $3k). This usually pays their best rate. I'm keeping that in my TIRA with them and just rolling into a new one every year.
Henceforth I’ll bear Affliction till it do cry out itself, “Enough, enough,” and die.
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