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Old 07-27-2013, 08:57 AM   #41
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PFCU is for penfed, correct ? I contacted them last year after reading about it here. I did not meet their eligibility requirements. On the other hand, Edward Jones keep telling me they get me the best CD rates available, which may not be true.
Here is a discussion on how to meet their membership requirements. It worked for me. I suppose this still holds true.

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Old 07-27-2013, 09:22 AM   #42
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Edward Jones keep telling me they get me the best CD rates available, which may not be true.

They're probably in the ballpark, but current rates are still very low. Note OAGs CDs are from 04, 05, 06 time frame. Even MMs back then were paying 4%+

Here is boglehead wiki on penfed. Pretty much anyone can join by paying a onetime membership fee to their non profit.
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Old 07-27-2013, 11:11 AM   #43
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. I have always purchased the longest term insured CD's with the intent to hold them to full term and have done that and will continue to do that (personally I think the talk of early withdrawal penalties is a bit of a "red herring" since a properly managed ladder should mitigate or eliminate that happening - JMO).
But if you had a 10 year CD at 5% with 7 years remaining on it, and if interest rates jumped to 7% for a 7 year CD, wouldn't you want to dump that old CD and buy the new one to replace it in your ladder? If the old CD had a 6 month penalty, it would still be worth it. So, shopping for the lowest penalty on equivalent CDs can give greater flexibility in a rising rate environment--and rising rates can mean rising inflation, so this should be a major concern for any fixed income investor. IMO.
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Old 07-27-2013, 11:12 AM   #44
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They're probably in the ballpark, but current rates are still very low. Note OAGs CDs are from 04, 05, 06 time frame. Even MMs back then were paying 4%+

Here is boglehead wiki on penfed. Pretty much anyone can join by paying a onetime membership fee to their non profit.
Depends on what % of the total went into those 2011 5% CD's. I can say for certain that HELOC got a lot of use the day those 5% CD's went on line as the window was very short. MM may have been paying good rates then but the CD's pay to maturity while "a good MM" pays about 1% today (are MM accounts even insured?). I have in the past found the best rates for insured CD's at either Pentagon or Navy Federal Credit Unions. Not sure if that will be so in the future but at my age it begins to matter less.
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Old 07-27-2013, 11:32 AM   #45
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... Our savings are 100% CD's in a ladder through early 2021 all FDIC/NCUA insured. ....

BTW I have done this for over 40 years so in my case I know it can work - did it or will it beat the stock or bond market? I don't know but I do sleep soundly.
And that is fine, but if you did compare to a more balanced portfolio, you might find that your dips in buying power have been greater with a laddered CD approach that with that balanced portfolio.

A long term decline in buying power might not be as obvious as some of the market downturns we have seen, but it's really all the same, regardless of whether the 'enemy' is inflation and low real returns, or volatility in a 60/40AA.

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Old 07-27-2013, 02:18 PM   #46
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But if you had a 10 year CD at 5% with 7 years remaining on it, and if interest rates jumped to 7% for a 7 year CD, wouldn't you want to dump that old CD and buy the new one to replace it in your ladder? If the old CD had a 6 month penalty, it would still be worth it. So, shopping for the lowest penalty on equivalent CDs can give greater flexibility in a rising rate environment--and rising rates can mean rising inflation, so this should be a major concern for any fixed income investor. IMO.
Hello Sam,

No, but I probably would buy a new CD to add to the 7 year rung. I don't heretofore redeem early. However, if those two ifs you mention were to occur (in today's rate situation) I might consider redeeming some CD's with much shorter times to maturity maybe to raise cash for longer term higher rates. But the world has been waiting about 7 years for the fixed rate to reverse.

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