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PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:12 am
by Colorado13
Thanks to Bogleheads, five years ago I invested in some 3% PenFed CDs. These are maturing in the next few days, so I want to say thanks to the Forum because without you, I wouldn't have known about this great rate.

I know that many of us purchased these PenFed CDs approximately 5 years ago. To make this topic actionable, the question is: What are you planning to do with the proceeds? I am planning to fund my 2019 Roth contribution and will build a CD ladder with the balance.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:25 am
by friar1610
I had one of the PenFed 3% CDs mature a week i.e. So ago. I will probably put the proceeds in one of Navy Federal's 3% 2 year certificates.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:36 am
by SpaceCowboy
I'm trying to invest in the Suneast 3.5% 27 month CD at the moment. The 3% PenFed CDs were the first ones I bought for my portfolio.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 1:30 pm
by k3vb0t
Some of mine is likely to go into the 5 year 3.5% at PenFed. The rest I am working out the math right now. Likely back into my regular savings accounts and slowly “DCAed” into my 401k over 2019.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 2:04 pm
by greetje
As mine is in a IRA, I will renew into another 5 yr P Fed Cds @ 3.5%.
I'm over 59 and can close or move the CD with no penalty as long
as I leave $1000 in the account. Great deal att P Fed. Am not aware of
any other financial institution offering that.

Was toying with the idea of moving it to Vanguard into a S Term bond fund
as I figure not to many more interest rate increases. But Vanguard send
a whole bunch of papers to fill out. Looked complicated. Easier to just
let it ride at P Fed until things settle down.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 2:29 pm
by hudson
I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 2:58 pm
by adrift
greetje wrote: Tue Dec 25, 2018 2:04 pm As mine is in a IRA, I will renew into another 5 yr P Fed Cds @ 3.5%.
PenFed currently pays less for CDs in IRAs. the 5-year is 3.4%.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 9:44 pm
by alpenglow
I can also thank the forum for mentioning this rate, which ended up being a win compared with the Total Bond I would have likely put the money. Of course, it could have gone the other way. Whatever the case, I'll be buying shorter term brokered CDs (2 and 3 year terms).

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 9:59 pm
by LK2012
friar1610 wrote: Tue Dec 25, 2018 10:25 am I had one of the PenFed 3% CDs mature a week i.e. So ago. I will probably put the proceeds in one of Navy Federal's 3% 2 year certificates.
I don't see any 3% 2 year certificates at Navy Federal, they have 2.5% to 2.75% (over $100,000) rates for 2 years.

Ped Fed, however, has 2 year CDs at 2.95%, is that what you meant?

My 5 year Pen Fed CD at 3% just matured last week, and I am very grateful to Bogleheads for alerting me to that rate then! I'm thinking about those almost 3% 2 year CDs at Pen Fed, but I haven't decided for sure. Also contemplating I Bonds.

Actually, I just found some 3% 2 year CD's at Fidelity, so I may just do that.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:09 pm
by Leif
I set up a CD ladder, in my taxable account, about 5 years ago. Penfed 5 Yr. was the first rung of the ladder. As in the OPs case mine are now coming due.

I also need to give a big thanks to the Bogleheads for making me aware of PenFed.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:44 pm
by friar1610
LK2012 wrote: Tue Dec 25, 2018 9:59 pm
friar1610 wrote: Tue Dec 25, 2018 10:25 am I had one of the PenFed 3% CDs mature a week i.e. So ago. I will probably put the proceeds in one of Navy Federal's 3% 2 year certificates.
I don't see any 3% 2 year certificates at Navy Federal, they have 2.5% to 2.75% (over $100,000) rates for 2 years.

Ped Fed, however, has 2 year CDs at 2.95%, is that what you meant?
No I wasn't thinking of the PenFed CDs. NFCU had them a couple of days ago but you are correct that they are not showing them now. The early bird gets the worm and apparently I slept too late.

Thanks for pointing this out. If it weren't for PenFed's EWPs their 2 year would be tempting.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 10:54 pm
by Sheepdog
Being 85 time is not on my side....oh, maybe it is, but I am cashing mine in and placing the proceeds into a SPIA for longer gain time and could help my spouse more.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Tue Dec 25, 2018 11:39 pm
by gwrvmd
Pen Feds 1 yr CD rates are good also. I just renewed a 1 yr CD for 2.67%........Gordon

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Wed Dec 26, 2018 10:34 am
by OAG
FYI Navy Federal CU has a 40 Month IRA/ESA rate of 3.75% APY for those interested and have/or qualify for an account there.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Wed Dec 26, 2018 2:34 pm
by k3vb0t
hudson wrote: Tue Dec 25, 2018 2:29 pm I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?
One way to avoid a large withdrawal penalty is to break up the total amount saved into multiple CDs — instead of one $25k CD you do five $5k CDs or for the overly aggressive 25 x $1k CDs :) Then you only break the number of CDs you need for whatever emergency.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Wed Dec 26, 2018 4:44 pm
by willthrill81
It's interesting to see 10 year Treasuries yielding 2.8% when there are so many CDs offering 3% or better.

According to Magnify Money, based on our Zip code, the best 3 year CDs are yielding 3.60%, 4 year CDs are yielding a lower 3.51%, but 5 year CDs are yielding 3.75%. That seems wonky to me, but I'm not a CD expert. Maybe 4 year CDs are not as competitive as 3 and 5 year? :?

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Wed Dec 26, 2018 6:54 pm
by hudson
k3vb0t wrote: Wed Dec 26, 2018 2:34 pm
hudson wrote: Tue Dec 25, 2018 2:29 pm I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?
One way to avoid a large withdrawal penalty is to break up the total amount saved into multiple CDs — instead of one $25k CD you do five $5k CDs or for the overly aggressive 25 x $1k CDs :) Then you only break the number of CDs you need for whatever emergency.
Thanks K3vb0T! That's a great plan. I've moved everything into VWIUX until the mood strikes. Whatever I do, I'll break it up into chunks. To keep my great Penfed Credit Cards working, I heard that I need to have a 1K CD. I'll call and ask.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Wed Dec 26, 2018 9:10 pm
by InertiaMan
willthrill81 wrote: Wed Dec 26, 2018 4:44 pm It's interesting to see 10 year Treasuries yielding 2.8% when there are so many CDs offering 3% or better.

According to Magnify Money, based on our Zip code, the best 3 year CDs are yielding 3.60%, 4 year CDs are yielding a lower 3.51%, but 5 year CDs are yielding 3.75%. That seems wonky to me, but I'm not a CD expert. Maybe 4 year CDs are not as competitive as 3 and 5 year? :?
One needs to be a bit skeptical/careful when surveying the various yields from these sites. There are anomalies that may not be actionable for many/most folks here. For example, I believe the 3.6% rate you mention is for a Youth Term Deposit at Mountain America Federal CU: depositor must be younger than 27, max annual deposit of $10k.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Thu Dec 27, 2018 3:31 pm
by mptness
I'm considering ableBanking CD. 2Yr is 3.2% with 90 day EWP. That beats current 2yr brokered CD by 20 basis points. I'm not likely to break a 2yr early, but they have Reasonable rates and 180 day EWPs on 3 and 4 year CDs. They do not appear to have IRA CDs.
Does anyone have experience with ableBanking?
https://www.depositaccounts.com/banks/a ... html#rates

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Fri Dec 28, 2018 1:14 pm
by alpenglow
hudson wrote: Wed Dec 26, 2018 6:54 pm
k3vb0t wrote: Wed Dec 26, 2018 2:34 pm
hudson wrote: Tue Dec 25, 2018 2:29 pm I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?
One way to avoid a large withdrawal penalty is to break up the total amount saved into multiple CDs — instead of one $25k CD you do five $5k CDs or for the overly aggressive 25 x $1k CDs :) Then you only break the number of CDs you need for whatever emergency.
Thanks K3vb0T! That's a great plan. I've moved everything into VWIUX until the mood strikes. Whatever I do, I'll break it up into chunks. To keep my great Penfed Credit Cards working, I heard that I need to have a 1K CD. I'll call and ask.
I was thinking of opening a 1K CD as well. I certainly want to keep getting 5% on my gas card once these CDs are transferred. Is it necessary?

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Fri Dec 28, 2018 2:32 pm
by hudson
alpenglow wrote: Fri Dec 28, 2018 1:14 pm
hudson wrote: Wed Dec 26, 2018 6:54 pm
k3vb0t wrote: Wed Dec 26, 2018 2:34 pm
hudson wrote: Tue Dec 25, 2018 2:29 pm I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?
One way to avoid a large withdrawal penalty is to break up the total amount saved into multiple CDs — instead of one $25k CD you do five $5k CDs or for the overly aggressive 25 x $1k CDs :) Then you only break the number of CDs you need for whatever emergency.
Thanks K3vb0T! That's a great plan. I've moved everything into VWIUX until the mood strikes. Whatever I do, I'll break it up into chunks. To keep my great Penfed Credit Cards working, I heard that I need to have a 1K CD. I'll call and ask.
I was thinking of opening a 1K CD as well. I certainly want to keep getting 5% on my gas card once these CDs are transferred. Is it necessary?
I called Penfed a few hours ago and asked: I'm moving all my CDs when they mature, what do I need to do to keep my rewards credit cards working?
ANSWER: Maintain your $5 savings account...no CD needed.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Fri Dec 28, 2018 2:56 pm
by TravelGeek
hudson wrote: Fri Dec 28, 2018 2:32 pm ANSWER: Maintain your $5 savings account...no CD needed.
Hmm, for some reason I have $100-ish in my Share/Savings account. I guess I will move my $x0,000 plus $95. I don't have a credit card with them, but would probably want to leave my Share account open in case of future CD offers.

Re: PenFed 3% CDs maturing: Thank you Bogleheads

Posted: Fri Dec 28, 2018 4:58 pm
by alpenglow
hudson wrote: Fri Dec 28, 2018 2:32 pm
alpenglow wrote: Fri Dec 28, 2018 1:14 pm
hudson wrote: Wed Dec 26, 2018 6:54 pm
k3vb0t wrote: Wed Dec 26, 2018 2:34 pm
hudson wrote: Tue Dec 25, 2018 2:29 pm I don't like Penfed's withdrawal penalty so I'm going to move it to Vanguard and go with VWIUX...Vang.'s Intermediate Muni or a 5 year 3.5% brokered CD. VWIUX would yield more after taxes, but it has more risk. Maybe I'll do 50-50.
I'm more interested in the return of my money that the return on my money....or am I?
One way to avoid a large withdrawal penalty is to break up the total amount saved into multiple CDs — instead of one $25k CD you do five $5k CDs or for the overly aggressive 25 x $1k CDs :) Then you only break the number of CDs you need for whatever emergency.
Thanks K3vb0T! That's a great plan. I've moved everything into VWIUX until the mood strikes. Whatever I do, I'll break it up into chunks. To keep my great Penfed Credit Cards working, I heard that I need to have a 1K CD. I'll call and ask.
I was thinking of opening a 1K CD as well. I certainly want to keep getting 5% on my gas card once these CDs are transferred. Is it necessary?
I called Penfed a few hours ago and asked: I'm moving all my CDs when they mature, what do I need to do to keep my rewards credit cards working?
ANSWER: Maintain your $5 savings account...no CD needed.
Great - thank you for sharing. It wouldn't be a big deal to pony up $1k for a CD, but it is one less thing to keep track of.