Goonie
Thinks s/he gets paid by the post
DOG52 said:
Yep, Nat'l Military Family Assoc. (NMFA)...just looked into that. You can join as a "Concerned Citizen" for $20.
6.25% CD ?
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Yep, Nat'l Military Family Assoc. (NMFA)...just looked into that. You can join as a "Concerned Citizen" for $20.
Dawg52
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Question on selling a cd within my brokerage account. If you have one that pays the interest at maturity, do you lose all the interest of just a portion of it? I got a couple that pays monthly and a couple that pays upon maturity. Never sold one before.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Dog, the penalty for early withdrawal (from a CD :
) is usually the loss of 3 or 6 months interest. Whether the interest is paid monthly or at maturity shouldn't have any bearing on the amount of penalty, but only the paperwork you signed will confirm that for you.
) is usually the loss of 3 or 6 months interest. Whether the interest is paid monthly or at maturity shouldn't have any bearing on the amount of penalty, but only the paperwork you signed will confirm that for you.
For those of you considering PenFed membership, I dragged my feet for a year because it seemed to be too much of a hassle to join (and apparently it was also too much of a hassle to haul my butt out of the recliner to make the 20-minute drive to our local PFCU branch). You used to have to join their NMFA affiliate separately and then mail PFCU your NMFA membership card, but now PFCU's website lets you do it all online over their website in one step. So I joined them a couple months ago and it was painless. Between the PFCU website and a phone call to Fidelity to determine the numbers for an EFT, the process took less than 30 minutes.
If NFCU can't match this offer then we're going to redeem a 5% five-year CD, which will cost six months' interest but which will also let us break it into smaller chunks instead of their $20K minimum.
Heck, I guess we should consider cashing in a big slice of our 9th-grader's college fund. It's strange-- I never doubted that spouse & I would reach the distribution phase of our ER portfolio, but this is the first time that I've seen the light at the end of the college-savings tunnel!
Adding this offer to PFCU's previous CD special, when we're done we'll be earning over 6% on our ER portfolio's allocation of a years' expenses in CDs.
We also have 28+ years to go on a NFCU 30-year mortgage fixed at 5.375%. Hmmmm.
Yikes, the brokerage has no reason to be your friend. You'll probably do better asking them that question on the phone to see if they'll match PenFed before they gore you on the penalties.DOG52 said:
If NFCU can't match this offer then we're going to redeem a 5% five-year CD, which will cost six months' interest but which will also let us break it into smaller chunks instead of their $20K minimum.
Heck, I guess we should consider cashing in a big slice of our 9th-grader's college fund. It's strange-- I never doubted that spouse & I would reach the distribution phase of our ER portfolio, but this is the first time that I've seen the light at the end of the college-savings tunnel!
Adding this offer to PFCU's previous CD special, when we're done we'll be earning over 6% on our ER portfolio's allocation of a years' expenses in CDs.
We also have 28+ years to go on a NFCU 30-year mortgage fixed at 5.375%. Hmmmm.
wabmester
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skipper said:
You'll get a 1099-INT each year. Interest earned is fully taxable each year at both the state and fed level.
jazz4cash
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Nords said:
Ok, thanks to this boards CD Rate Early Warning System, I am taking the plunge (maybe). The link to the Natl Military Family Assoc even states that you don't have to maintain the membership to retain eligibility for the credit union...so it's a $20 donation (reduces first yr APY to 6.05), only they never give any options for funding the donation. I assume I'll get something in the mail. Beyond that, I am still considering my options to actually fund the account....the rate is very compelling in terms of the fixed income AA.
Nords, I'll be standing by to hear if NFCU matches PenFed............
I actually called PenFed, and they stated I could join the NMFA.
No one is taking the lifetime membership? My frugal ways tell me that is way too much money.
I was wondering how that worked - pay just $20 and be able to invest for the entire year? If I want to invest next year, I would have to pay again. I was thinking about the 3 year, and then investing as much as I can in these 3 years, and then worry about what to do after that.
Thank you everyone for the great info.
~M
No one is taking the lifetime membership? My frugal ways tell me that is way too much money.
I was wondering how that worked - pay just $20 and be able to invest for the entire year? If I want to invest next year, I would have to pay again. I was thinking about the 3 year, and then investing as much as I can in these 3 years, and then worry about what to do after that.
Thank you everyone for the great info.
~M
I joined today, no big deal. Did it over the phone and will now do a wire transfer from Vanguard tomorrow to open the CD. The folks at PenFed were very good and helped every way they could.
$20 is for a lifetime membership even though the site says 1 year. I don't really understand why but no reason to spend the $300 for lifetime, at least that's what I understood from the person who helped me at PenFed.
$20 is for a lifetime membership even though the site says 1 year. I don't really understand why but no reason to spend the $300 for lifetime, at least that's what I understood from the person who helped me at PenFed.
brewer12345
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73ss454 said:
The source of confusion is that there are two separate organizations: the credit union (Pen Fed), and an advocacy group (NMFA). Assuming you don't otherwise qualify to joing the credit union, you have to become a member of the NMFA to join the credit union. But once you are a credit union member, it is for life, regardless of whether you maintain membership with the NMFA. So you can join the NMFA for life if you wish to support their cause and fork over $300, but it isn't necessary to do so to become a lifetime Pen Fed member.
Tadpole
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The "Apply Now" button on the CD page at PenFed is taking me to a loan application page and not a CD buying page. Anyone else tried to make a buy of these CDs?
OAG
Thinks s/he gets paid by the post
Tadpole: Site works fine but, just call them at the 1-800 number. They will take care of you on the phone.
Dawg52
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You guys locking in for 7 years?
jazz4cash
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
DOG52 said:
That's one of my decisions.....probably will, but I'll be working for 12 more yrs or so and I am doing the IRA, if I can get it funded before the deadline. I may do a ladder, but at 6.25, I don't see any benefit.
DRiP Guy
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1. Join NMFA? Check!
2. Join PenFed? Check!
3. Try to get info on CD and find how to fund my account (above the initial xfer)?
Hmmm... not so good there. Looking at website is not too informative, either; so, I'll have to call them Monday and see what I can do to get the account funded and then buy the 3 yr CD. Good rate! Beats the heck out of anything I see on Bankrate, which usually is a pretty good resource. Thanks for the tip.
[Edited to add]
Just got off the phone with Pen Fed and for me, looks like the easiest thing was just to print out the application form (from main menu) and I'll mail them a check and the form on Monday.
I don't want to turn this into a rant, but I have been having a lot of customer service issues with BofA lately, over multiple problems, and these folks at PenFed have just been terrific to talk to. I waited 12 minutes to get customer service from BofA today, then got disconnected, then tried again - ugh. Their website for online banking is completely hosed today... so, it is nice that some people want to serve you and are glad for your business. I recently opened a MM account with Zion's (5.15 APR%, and reqd min balance was trivial) and they were similarly polite and responsive like PenFed was about the CD. In fact, I miss using Credit Unions (was a CU member all my life, until I left the military) -- so maybe I will look into Zion's or PenFed for my primary checking, too.
2. Join PenFed? Check!
3. Try to get info on CD and find how to fund my account (above the initial xfer)?
Hmmm... not so good there. Looking at website is not too informative, either; so, I'll have to call them Monday and see what I can do to get the account funded and then buy the 3 yr CD. Good rate! Beats the heck out of anything I see on Bankrate, which usually is a pretty good resource. Thanks for the tip.
[Edited to add]
Just got off the phone with Pen Fed and for me, looks like the easiest thing was just to print out the application form (from main menu) and I'll mail them a check and the form on Monday.
I don't want to turn this into a rant, but I have been having a lot of customer service issues with BofA lately, over multiple problems, and these folks at PenFed have just been terrific to talk to. I waited 12 minutes to get customer service from BofA today, then got disconnected, then tried again - ugh. Their website for online banking is completely hosed today... so, it is nice that some people want to serve you and are glad for your business. I recently opened a MM account with Zion's (5.15 APR%, and reqd min balance was trivial) and they were similarly polite and responsive like PenFed was about the CD. In fact, I miss using Credit Unions (was a CU member all my life, until I left the military) -- so maybe I will look into Zion's or PenFed for my primary checking, too.
As some others have mentioned, I have had a wonderful experience with Pen Fed. They were most helpful and made me feel less dumb about having to ask a couple of questions. I asked the guy who helped me if they had been busy and he said the last couple of days had been pretty interesting!
We missed out on the earlier 6% CDs, because we were doing a transfer from another custodian, and we were unable to get everything set up and transferred in the time frame, so we are thrilled to have the opportunity to get in on the 6.25%. I took advantage of the opportunity to fund a large portion of my CD ladder for the next six years.
We missed out on the earlier 6% CDs, because we were doing a transfer from another custodian, and we were unable to get everything set up and transferred in the time frame, so we are thrilled to have the opportunity to get in on the 6.25%. I took advantage of the opportunity to fund a large portion of my CD ladder for the next six years.
Roger that
Confused about dryer sheets
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How is interest paid; at maturity or semi anually?
DRiP Guy
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I may be posting in the wrong place, and I also may be showing my ignorance here, but I hope someone can answer a question:
First some background:
I recently moved some cash from my checking, where it was earning nada to a MM account, earning ~5.x%. I could move even more, don't know why I waited so long to do this.
I also am buying a 3yr CD paying 6.25% on Monday.
I also could buy a 1yr and also a 2 yr CD at around 6.0 - 6.125% from Fidelity in my brokerage acct if I take my 'winners' off the table. I just learned they have "brokerage CDs" (not a plug, but link included) with the advantage of no penalty for early withdrawal (except loss of any unpaid interest, of course)
http://personal.fidelity.com/products/fixedincome/fibankbroker.shtml
So that leaves me:
instant liquidity in checking, (1/4 of cash)
easy reach liquidity in MM, (1/4 of cash)
a no-penalty CD mini- ladder for years 1 and 2, (1/4 of cash)
regular CD for year 3 (1/4 of cash)
I had just got through rebalancing my formerly all individual stock aggressive 401(k) AA to now include small, mid, large, int'l indexes, with a bond fund, at a 80/20 equity/bond split
I guess the question is that since I now can convert existing funds (brokerage acct + cash) outside my 401(k) to very safely earning more than the piddly 4% my bond fund was going to do inside of it, why should I keep *any* bonds in the 401(k)? I figure I will have between 20 to 25% of my overall net worth in cash-like funds, earning ~ 5.5% APR, and that could represent the non-correlated returns I need to allow stocks to go up and down and still have the diversification I should have... right?
First some background:
I recently moved some cash from my checking, where it was earning nada to a MM account, earning ~5.x%. I could move even more, don't know why I waited so long to do this.
I also am buying a 3yr CD paying 6.25% on Monday.
I also could buy a 1yr and also a 2 yr CD at around 6.0 - 6.125% from Fidelity in my brokerage acct if I take my 'winners' off the table. I just learned they have "brokerage CDs" (not a plug, but link included) with the advantage of no penalty for early withdrawal (except loss of any unpaid interest, of course)
http://personal.fidelity.com/products/fixedincome/fibankbroker.shtml
So that leaves me:
instant liquidity in checking, (1/4 of cash)
easy reach liquidity in MM, (1/4 of cash)
a no-penalty CD mini- ladder for years 1 and 2, (1/4 of cash)
regular CD for year 3 (1/4 of cash)
I had just got through rebalancing my formerly all individual stock aggressive 401(k) AA to now include small, mid, large, int'l indexes, with a bond fund, at a 80/20 equity/bond split
I guess the question is that since I now can convert existing funds (brokerage acct + cash) outside my 401(k) to very safely earning more than the piddly 4% my bond fund was going to do inside of it, why should I keep *any* bonds in the 401(k)? I figure I will have between 20 to 25% of my overall net worth in cash-like funds, earning ~ 5.5% APR, and that could represent the non-correlated returns I need to allow stocks to go up and down and still have the diversification I should have... right?
wabmester
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Roger that said:
Monthly.
DRiP Guy said:
You've seen the efficient frontier graphs, right?
That straight diagonal line they show on the left is the effect of adding cash. Risk free. Zero volatility. By definition, uncorrelated with all other assets.
If you believe this, then cash isn't a valid substitute for bonds. That risk-free stuff simply damps both volatility and returns. In theory.
In practice, there is no such thing as a risk-free asset with zero volatility. The return from cash varies with time.
So, yeah, cash could probably be used as a bond substitute, but not for the MPT purist.
Edit: learned to spell "diagonal."
DRiP Guy
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Awesome, thanks for the lucid reply. I have indeed recently bumped up against the "Efficient Frontier" concept as part of my very recent FI/RE introduction, and, coming from an engineering background, it seemed to make good sense conceptually (as I understood it), and is largely why I finally rebalanced and added bonds.
As you say, the words "Risk Free Return" seems to me like the concept of "efficient markets" or "4% SWR" -- I consider them each approximations to get across broad concepts and not absolute guarantees. Indeed, I find it amusing that some people pretend to think EMT means no one can ever earn any money trading/timing, because they act as if the efficiency must mean 100% as well as instantaneous. Of course as a real world system with inertia and inherent drag and hysterisis (yes, inefficiencies), it could not be. Doesn't mean the concept is not 'true', just like the historical SWR data is what it is?
But I digress wildly here -- back to this bonds versus cash thing, though, I fear I may not have truly understood the EF yet.
1. With those highly liquid assets, that can obtain a Risk Free rate in Money Markets and CDs to blow away all of the bond fund choices that I could find myself, if I knew nothing of Efficient Frontier, I would certainly not go bonds, just considering risk/return on those two alternatives on their own.
2. That said, does the exclusion of those cash equivalents from the drivers of the parabola have perhaps a much deeper significance I am missing, as to why I should treat my portfolio as standing apart from the totality of my investments + cash? As I approach potential ER, I tend to want to look at my finances holistically, so that I don't stress over any one thing needlessly.
Thanks in advance, and sorry if I am being thick on this. If the best answer is: "Hey, educate yourself first, you don't know even enough to discuss this yet, read X article, or Y book", I'll let it go at that.
Thanks!
As you say, the words "Risk Free Return" seems to me like the concept of "efficient markets" or "4% SWR" -- I consider them each approximations to get across broad concepts and not absolute guarantees. Indeed, I find it amusing that some people pretend to think EMT means no one can ever earn any money trading/timing, because they act as if the efficiency must mean 100% as well as instantaneous. Of course as a real world system with inertia and inherent drag and hysterisis (yes, inefficiencies), it could not be. Doesn't mean the concept is not 'true', just like the historical SWR data is what it is?
But I digress wildly here -- back to this bonds versus cash thing, though, I fear I may not have truly understood the EF yet.
1. With those highly liquid assets, that can obtain a Risk Free rate in Money Markets and CDs to blow away all of the bond fund choices that I could find myself, if I knew nothing of Efficient Frontier, I would certainly not go bonds, just considering risk/return on those two alternatives on their own.
2. That said, does the exclusion of those cash equivalents from the drivers of the parabola have perhaps a much deeper significance I am missing, as to why I should treat my portfolio as standing apart from the totality of my investments + cash? As I approach potential ER, I tend to want to look at my finances holistically, so that I don't stress over any one thing needlessly.
Thanks in advance, and sorry if I am being thick on this. If the best answer is: "Hey, educate yourself first, you don't know even enough to discuss this yet, read X article, or Y book", I'll let it go at that.
Thanks!
