PenFed 3% CDs maturing: Thank you Bogleheads

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Colorado13
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PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
friar1610
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
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SpaceCowboy
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
k3vb0t
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
greetje
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
hudson
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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?
adrift
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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%.
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alpenglow
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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).
LK2012
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
Last edited by LK2012 on Tue Dec 25, 2018 10:26 pm, edited 1 time in total.
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Leif
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
Last edited by Leif on Wed Dec 26, 2018 12:29 pm, edited 1 time in total.
friar1610
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
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Sheepdog
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
All that truly matters in the end is that you loved.
gwrvmd
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post by gwrvmd »

Pen Feds 1 yr CD rates are good also. I just renewed a 1 yr CD for 2.67%........Gordon
Disciple of John Neff
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OAG
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979 21 years of service @ 38.
k3vb0t
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
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willthrill81
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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? :?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
hudson
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
InertiaMan
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
mptness
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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
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alpenglow
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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?
hudson
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
TravelGeek
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
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alpenglow
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Re: PenFed 3% CDs maturing: Thank you Bogleheads

Post 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.
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