Scooter57 wrote: ↑
Sun Jan 05, 2020 3:01 pm
There is very little extra hassle involved in buying credit union CDs
I've found it to be quite a hassle, at least for IRA CDs.
You need to:
0 wait for a good CD, checking websites or forums
1 read fine print and/or call and discuss, to avoid problems
1b if there's something you don't like, go back to step 0
2 meet CU eligibility requirements
3 setup an id, sometimes requiring several security questions and/or credit check questions
4 fill out paperwork
5 send a copy of photo id
5b you may need to wait a few days. check every day, the rate won't last forever!
6 sometimes you need to set up another id because the first one was just used to apply
7 for CU: either link a bank account and send a little money or sometimes you can pay with a credit card.
8 fill out more paperwork to open an IRA, and to transfer IRA funds
8b after waiting 1 week, log in every couple days to see if funds have arrived
9 if the rate is still available, open the cd
10 if the rate is no longer available by the time the CU or bank gets the check sent from your broker, then you need to have the money sent back to your broker
11 especially for smaller CU or banks: correct mistakes if necessary
12 more paperwork for beneficiary/TOD unless you could do it in an earlier step
13 in some cases, send a penny once a year to your taxable account to be sure it doesn't become inactive.
It might be possible to have IRA funds wired, but so far I haven't succeeded. Maybe I should try harder.
When there's a good CD rate, it can be difficult to deal with a CU or bank. In my experience, they can be unresponsive to email and secure messages. Phone calls may work better, but expect long hold times.
For me it's not a fun process at all. But for large CDs, it can be well worth it. It makes rebalancing more difficult or in some cases impractical because of early withdrawal penalties, but sometimes you can earn a significantly higher yield than on a comparable Treasury.