1st United Credit Union 3% 3 year CD

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
Posts: 2916
Joined: Tue Jun 05, 2007 7:34 pm
Location: New York, NY

1st United Credit Union 3% 3 year CD

Post by Rob5TCP » Fri Oct 06, 2017 9:21 pm

This ends tomorrow - and you must be in one of the California counties that 1st United operates in.
Story at depositaccounts.com

https://www.depositaccounts.com/banks/1 ... cu/offers/

User avatar
Posts: 2916
Joined: Tue Jun 05, 2007 7:34 pm
Location: New York, NY

Re: 1st United Credit Union 3% 3 year CD

Post by Rob5TCP » Fri Oct 06, 2017 10:15 pm

This ends by 1PM tomorrow.

Posts: 6
Joined: Sun Apr 24, 2016 10:24 pm

Re: 1st United Credit Union 3% 3 year CD

Post by oofoo2000 » Tue Oct 10, 2017 9:11 pm

Thanks for the heads up! I managed to open an account at the last minute. This is definitely a great deal!

User avatar
Posts: 3953
Joined: Thu Jul 26, 2007 6:23 pm
Location: Centennial CO

Re: 1st United Credit Union 3% 3 year CD

Post by dratkinson » Wed Oct 11, 2017 7:25 pm

BH 1st United Credit Union 3% 3 year CD

I use to play games with my first-year EF money: chasing rates and CC/account opening bonuses. I no longer believe it to be worthwhile. Why? Now it's too much work to avoid the hurdles. And uncle sugar and his nephews at state earned windfalls from this "second job", but never even sent me a "Thank you" card.

For me, a taxable CD 3% APY becomes 2.1% = (3% - (3% x (.25 + .05))) after tax (25% fed, 5% state).

So a few years back, during the process of simplifying my life (a result of forum topic on "simplifying our lives in advance of cognitive decline"), I looked into the possibility that the tax code could be used to reward my work, instead of punishing my work. Muni funds seemed to be the place to start looking.

After a few months of due diligence, I found a suitable single-state muni fund that turned its 2.5% SEC yield into 3.57% (= 2.5% / (1 - (.25 + .05))) after the fed/state tax benefits. (That was in 2015. The SEC yield should be a little higher now.)

Now, when I feel the urge to play games, I just buy more single-state muni fund instead.

Livesoft's idea. I have also embraced livesoft's advice to increase tax efficiency by minimizing our Sch B part I income. The money from playing games---chasing rates and CC/account-opening-bonuses---is taxed here.

I now keep 1yr of living expense (1st-tier EFs) in low-interest checking (<$10/yr in interest), savings (<$10/yr in interest), and TE mmkt; 3yrs in VWIUX (IT national muni: last tier of my formal EFs, home projects, new car, dry powder fund); and everything else in my other tax-efficient 3-fund investments.

Avoiding games with my first-year EFs does result in a cost-of-doing-business to keep my financial life simple. On $20K/yr of living expense, 2.1% after-tax is only $420 (= $20K x 2.1%).

I can give up $420 a year to keep my financial life simple. Especially since every new dollar above that (first-year living expense) is earning the market rate on my AA.

I could go back to playing games with my first-year EF money. My workload would go up. My taxes would go up. My after-tax return on that money would be less than what I'm getting with my single-state muni fund. Naah.

(Added) LT national muni fund. All is not lost if you can't find a single-state muni fund. Before I did, I was using VWLTX/VWLUX (LT national muni) for my retirement bonds in taxable and to scratch the itch to reach for additional yield. Why? With 3yrs of living expenses in VWIUX (IT national muni), I was reasonably certain I would not need to withdraw money from the LT muni fund, so my games-playing money could go there.

Disclosure. I did start my muni investing with the BH-recommended VMLTX (limited-term national muni) as the last tier of my formal EFs, and the BH-recommended VWITX as my retirement bonds in taxable. (But I continued to have the urge to reach for additional yield.)

But as my muni investments grew and I became certain I had more than enough to cover most emergencies, I mentally converted VWITX/VWIUX to be the last tier of my formal EFs, and opened VWLTX (funded by selling VMLTX) as my preferred retirement bonds and play-money target. (I was much happier with this arrangement.)

Finding an acceptable single-state muni was just gravy. (Knock wood.)

(Added) Time. Just starting out and with little invested, what do you do with your time if you are not playing games with your first-year EF money?

"An investment in knowledge pays the best interest." --Benjamin Franklin

--Keep your first year of living expenses simple, to provide more free time and keep your financial life simple.
--Use your increased free time to improve your human capital---ability to earn.
--Use your increased human capital to increase your pay.
--Use your increased pay to more quickly get beyond "...just starting out and with little invested".

(Added) P.S. All of this presupposes you are in the 25%+ fed tax bracket so can reap the tax benefit of muni funds. If not, then see "(Added) Time".

Use your additional free time from keeping your financial life simple, to increase your ability to earn enough to move into higher tax brackets.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

Post Reply