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Old 03-12-2010, 10:14 AM   #21
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So I guess I'm goin' with PenFed for 3%.

If you see a better rate in the next couple weeks, please post it to this thread...
Interesting exchange of emails with NFCU. The past year or two, I've pretty much kept my CD deposits to those two institutions. (Been an NFCU member for about 40 years so I have the same loyalty all Navy folks do to NFCU, USAA, etc..) More and more I'm finding that PenFed beats NFCU except when NFCU is running one of their "specials."

I could shop all the banks on the web looking for a little more yield and at one time I used to do that. But life is simpler when there are only two institutions (rather than 5 or 6) to deal with.
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Old 03-12-2010, 11:28 AM   #22
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This is puzzling. How can Ally change the terms in conditions of a contract after the contract is signed? Unless of course, they are a) the federal government (e.g. TARP funds) or b) the contract itself says that the early withdrawal penalty is subject to change. If b), I would never do the CD there as they could make the withdrawal penalty ALL the accrued interest.
Aside from CD rates themselves, there is nothing that says terms and conditions cannot change. In fact, banks periodically do change terms and conditions. There is nothing that says they cannot do so for CDs. In fact, just recently Ally changed their early penalties from 90 days to 60 days and this change also applies to old and new CDs.

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life is simpler when there are only two institutions (rather than 5 or 6) to deal with.
...as long as you stay under FDIC limits, yes.
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Old 03-12-2010, 12:41 PM   #23
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The past year or two, I've pretty much kept my CD deposits to those two institutions. (Been an NFCU member for about 40 years so I have the same loyalty all Navy folks do to NFCU, USAA, etc..) More and more I'm finding that PenFed beats NFCU except when NFCU is running one of their "specials."
I could shop all the banks on the web looking for a little more yield and at one time I used to do that. But life is simpler when there are only two institutions (rather than 5 or 6) to deal with.
Same here-- I watched PenFed beat NFCU for nearly three years before I got around to signing up.

In addition to RateBrain I've been watching USAA and a couple local CUs, but it's really down to PenFed and NFCU. In that order.

I'll be pulling triggers next week, depending on how fast the EFT network will let me move the money around.
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Old 03-16-2010, 11:17 AM   #24
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Just to wrap up this thread, I moved the money to PenFed and bought their CDs.

In a stunning exception to Murphy's Law, PenFed hadn't lowered their rates just before I bought and NFCU hasn't raised their rates in the 24 hours since I bought.

After consulting NFCU on their EFT limits I ended up doing a $14 wire transfer:
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If the receiving institution is a checking account and the desired transfer amount is $2,500.00 or less, then the funds can be sent as an ACH transfer via Navy Federal Online Account Access (NFOAA).
To wire funds from your Navy Federal account to your account at another financial institution for any dollar amount ... you may call us at 1-888-842-NFCU (6328).
An EFT request from PenFed might have gone just fine but I didn't want to get stuck in a technicality and mess with two bureaucracies. The wire transfer started with a five-minute phone call which was handled by NFCU with no fuss or drama. The money arrived at PenFed a couple hours later. It took me about 15 minutes on PenFed's website to ladder up the CDs, which will wrap up with some snail-mail signature paperwork in another week. PenFed generally beat NFCU by 0.25-0.5% in all rates.

Spouse and I joined NFCU in 1978 & 1979 and have had our paychecks & pension direct-deposited there ever since direct deposit became available. At the start of 2009 NFCU had us for two mortgages, a HELOC, and a pile of CDs. One transaction at a time they've stubbornly lost all of them to other banks or to PenFed, and today they're just a direct-deposit stash before we move our money elsewhere. Their Pearl Harbor branch manager was also a jerk about redeeming paper EE bonds.

NFCU hasn't been "bad", they just haven't been very competitive.
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Old 03-16-2010, 12:41 PM   #25
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Spouse and I joined NFCU in 1978 & 1979 and have had our paychecks & pension direct-deposited there ever since direct deposit became available. At the start of 2009 NFCU had us for two mortgages, a HELOC, and a pile of CDs. One transaction at a time they've stubbornly lost all of them to other banks or to PenFed, and today they're just a direct-deposit stash before we move our money elsewhere. Their Pearl Harbor branch manager was also a jerk about redeeming paper EE bonds.

NFCU hasn't been "bad", they just haven't been very competitive.
Do you have any theories on why this is? Do you think they've gotten too big and "corporate?" I'm mortgage free at the moment but I had my last several mortgages with them. I have some CD's (but increasingly switching to PenFed per the basic topic of this thread). Like you, get pensions (and SS) direct deposited to them and have both credit and debit cards with them. Use it them for my primary checking account. No reason to switch the checking (and therefore want to keep the debit.) Never pay interest on credit cards, so it really doesn't matter where I have it (but it's easy to do transfers from checking to pay off the occasional cc bill.) So, in my case, no reason to make any big moves, but I don't get the warm and fuzzy sense with NFCU that I once did. That said, I'm sure it's a lot warmer and fuzzier than a mega-bank.
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Old 03-16-2010, 12:53 PM   #26
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Do you have any theories on why this is? Do you think they've gotten too big and "corporate?"
...
So, in my case, no reason to make any big moves, but I don't get the warm and fuzzy sense with NFCU that I once did. That said, I'm sure it's a lot warmer and fuzzier than a mega-bank.
After several years of more mortgage business than they could realistically handle, I think NFCU is reacting to the credit crisis by getting much more conservative in their lending & CDs. In 2005, after one of our refi's, they actually sent a notary to our house to sign the closing documents for a no-costs HELOC. After our 2009 refi they didn't even want to give us a HELOC, let alone a freebie.

I think that PenFed has typically stayed a bit higher on fixed mortgages, and perhaps that's how they pay a little more on CDs. Their website is the best CD-application process I've ever seen, too, so maybe they share their cost savings.

But, yeah, I get the impression of NFCU Megacorp being hassled by scrappy little underdog PenFed.

Frankly I'm terrified to mess with my pension's direct deposit. DFAS had enough trouble figuring out my retirement account (I got three different W-2s the year after I ER'd) and I'd rather funnel everything through NFCU than have to start over again somewhere else.
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Old 03-22-2010, 09:21 PM   #27
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Got an e-mail from a Wall Street Journal writer who's working on "chasing yield".

We spoke for about 20 minutes today. This thread, plus the subject of writing covered-call options contracts, might end up in an article. I don't know when it would go to press.
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Old 03-23-2010, 06:37 AM   #28
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Got an e-mail from a Wall Street Journal writer who's working on "chasing yield".

We spoke for about 20 minutes today. This thread, plus the subject of writing covered-call options contracts, might end up in an article. I don't know when it would go to press.
I got a similar email. However, as a private citizen I learned lonh ago that it is never to my advantage to talk to the press.
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Old 03-24-2010, 09:02 AM   #29
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However, as a private citizen I learned lonh ago that it is never to my advantage to talk to the press.
I see it as not much different than posting to Internet discussion boards. It was much more dangerous in uniform, but as an ER I haven't been burned... yet.

A few years ago during a college tour with our kid we visited the Notre Dame NROTC office. One of the officers was a submariner and we started playing the where-were-you-stationed who-do-you-know game. He wasn't very interested in swapping sea stories with yet another geezer parent until he realized that he'd read one of my ER interviews-- and then he came alive. Lots of questions about ER, and then he opened up about gaming the NROTC application process. Learned a lot that day, and it all got put to good use.

Earned a few parental respect points from our kid, too.

Looks like a few of us posters have been contacted by the media on here at one time or another. PM me if you have a story to share...
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Old 03-24-2010, 09:33 AM   #30
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Once I hang up my spurs, I will talk. Until then, way more risk than reward.
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Old 03-24-2010, 11:39 AM   #31
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Once I hang up my spurs, I will talk. Until then, way more risk than reward.
I think journalists want to talk to us ERs because of our avocation, even when they just don't get it.

Unfortunately many journalists want to talk to workers because of their occupations, and those situations are filled with minefields for performance reviews & workplace politics. Or political workplaces.

One of my COs (at a training command) was widely known and respected, even revered, but he's a John-Wayne personality with politics slightly to the right of Attila the Hun. When I knew him he'd reached his final rank and didn't sugar-coat anything. He was extremely popular with the local TV reporters for always coming through with a pithy sound bite on military current events for the evening news. They had to take what they could get, though, and sometimes it just couldn't be aired without bleeping or fear of mightily annoying local flag officers.
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Old 04-10-2010, 03:04 PM   #32
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Here's the article, which appears to be open access without subscription:
Make More on Your Cash - WSJ.com

Here's the other thread:
Nords is famous again....
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Old 04-10-2010, 04:28 PM   #33
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Back on topic....
PenFed dropped their rates at the beginning of the month. 5 year CD are now down to 3%
This is second time when I acted too slow and the rates dropped right before I was going to get a PenFed CD.

Anybody have a good crystal ball and make a prediction when CD rates will rise
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Old 04-10-2010, 04:37 PM   #34
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Anybody have a good crystal ball and make a prediction when CD rates will rise
April 22 - 24

I know this as I'll be on the road without internet access, so will miss out.
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Old 04-11-2010, 12:03 PM   #35
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This is second time when I acted too slow and the rates dropped right before I was going to get a PenFed CD.
Anybody have a good crystal ball and make a prediction when CD rates will rise
Usually they raise their rates the week after I lock in a bunch of CDs. They should've been at 3.75% or even 4% by now...

BTW I'm surprised no one has taken William Bernstein to task yet for his comments:
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William Bernstein, who co-manages $156 million at Efficient Frontier Advisors, advises people to spread their bets far and wide, even into downright risky assets. For investors in taxable accounts, he suggests a portfolio that places 35% in Treasurys, 30% in municipal bonds, 25% in a short-term corporate bond fund and— here is the kicker—10% in stocks. For investors in tax-exempt vehicles, he suggests 45% Treasurys, 30% in a short-term corporate bond fund, 15% Treasury Inflation-Protected Securities and, again, 10% in stocks.
It might sound crazy, but the numbers bear out this approach, according to an analysis by Morningstar for The Wall Street Journal. Using return data and delving deeply into financial arcana like standard deviation and asset correlations, the study found some surprising results: On average, this asset strategy would have resulted in annualized returns, including reinvested dividends and interest, of about 4.8% and 4.9% for taxable and tax-exempt portfolios, respectively, since March 1997. That compares with average annual returns of 3.14% for one-year CDs, according to Bankrate.com, and 3.2% for 30-day Treasury bills during that period.
Uh, thanks Bill, but even I'm not that hankerin' for a higher yield.
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Old 04-11-2010, 02:29 PM   #36
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BTW I'm surprised no one has taken William Bernstein to task yet for his comments:

Uh, thanks Bill, but even I'm not that hankerin' for a higher yield.
Meh, its just worth remembering that the Bernstei recommended portfolio is substantially riskier than CDs. His allocations resemble that of the vast majority of life insurers and they generally succed in avoiding blowing themselves up from asset problems as long as they do not drift too far away from what works.
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Old 04-11-2010, 05:49 PM   #37
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Nords - I saw the WSJ article and your name - pretty cool. As for Bernstein's advice - well, I was a bit surprised myself, although it was from a gut feeling and not analysis. Plus, it seemed like a bit of work :-)

In any case, was great to see your name :-)
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Old 04-12-2010, 08:40 AM   #38
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ALLY CANNOT APPLY NEW TERMS TO OLD CD'S. I have verified this multiple times, I have a printed conversation with one of their reps to this effect. If they change it, it will apply to NEW cd's
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Old 04-12-2010, 12:06 PM   #39
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Meh, its just worth remembering that the Bernstei recommended portfolio is substantially riskier than CDs. His allocations resemble that of the vast majority of life insurers and they generally succed in avoiding blowing themselves up from asset problems as long as they do not drift too far away from what works.
Right. If you have multiple "risky" asset classes that tend to have negative correlation with each other, the overall portfolio volatility isn't all that high in many market scenarios. Of course, almost all "noncorrelating asset classes" (except Treasuries) pretty much melted down in lockstep in 2008-09, so there are no guarantees.

On the other hand, non-correlating "risky" asset classes like emerging markets, gold and real estate made the 2000-02 bear market a lot less painful for folks who held those asset classes in their AA.
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