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Old 05-02-2012, 04:01 PM   #21
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Originally Posted by d View Post
5% CDs, 10yr, PenFed CU, were available in early 2011 ... so another 8+ yrs to go!
Yeah, from what I've heard, participation was somewhat limited; lots of conditions had to be met (existing CDs in place etc) as this was a special promotion thing.

If you got in on it, good for you!

Not something anyone could get in on though. Not sure if a non Vet or non Armed Services person could even join this CU.
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Old 05-02-2012, 07:16 PM   #22
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Originally Posted by marko View Post
Johnnie36 posted that he's getting 4.5% in CDs. The best I could find when CDs paid 4.43% was in 2008 on a 5 year. That means that in a year or so, he'll be SOL.

Unless there is some other insight that I'm missing....?
You're right, marko. I bought these 5 year CD's in 2009 @ 4.65% and they will mature in 2014. I'm hoping rates will be up a little in a couple years. One is an IRA CD and will have to do something creative with that money until rates rise. In the meantime, starting in 2014 we'll have to resort to the income we get off the mortgage we hold on our prior home. It also gets us 5.5% with the final payment due in 2020.
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Old 05-02-2012, 08:20 PM   #23
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Just a little story on learning about things I didn't know existed in CD's. Back about six years ago I wanted to get out of the market totally. I had to do something with my 401k at Fidelity. Found out they had a 5 yr CD at 5% (called a brokerage CD) and I rolled the 401k over into that CD as an IRA. A few months later I get a call from Fidelity and they tell me someone wants my CD and is bidding $8000 for me to sell it. If I agree, it stays on the market for a couple days until the bidding closes. I agree because this local bank is also offering 4.65% on a 5yr IRA. So I sold that "brokerage CD" at Fidelity, added $8000 to total and rolled it over to the local bank. I thought that was a great move. And I have to say that Fidelity went overboard in doing all the paperwork between them and the bank. Told me they would handle everything as a custodial transfer because I shouldn't really get involved in the funds as it might screw up the IRA rollover. Over the years I found that Fidelity did a great job of managing the 401k's for the employees. They now handle all the financial matters for the company.
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Old 05-03-2012, 10:13 AM   #24
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And I would approach this problem entirely differently. Understand that customer service is seeing $170,000 as a lot of investable money.

When asked if you would like a call from a financial advisor, respond: No, but I would like the president of the credit union to call me.

Then, when he/she calls tell him/her that you feel as a member that the credit union is doing a disservice to its members by suggesting/pointing them to a financial advisor, from whom the credit union earns a referral fee. Suggest it would be better if the concerned employees ask if the member might want a referral to a fee-based certified financial planner for advice on how to increase the yield on his/her savings portfolio.

When the response is but that isn't our policy, you can also reply your policy isn't to deal with referrals from a credit union that isn't concerned with educating its members on managing their money.

(Off my soap box now).

-- Rita
confirmed credit union member
former president of the board of directors of a credit union
My wife was in supervisory positions at a couple of credit unions during her career. We're now retired (early). Credit unions by nature have a somewhat limited marketing ability (you have to be a member). The last credit union she worked for was very aggressive with marketing tactics. All employees were measured by how well they "sold" credit union services to members.

The top sellers of the year were rewarded with membership in an "Exclusive Club" and this was celebrated publicly at a dinner for those employees (paid for out of Credit Union funds). Upper management constantly praised those in the lead via broadcast emails to all employees, while supervisors quietly wrote up those not making their monthly quota of successful sales referrals to the various credit union departments.

FYI - some departments of some Credit Unions are actually representatives of unnamed outside companies (contract type employees) - particularly investment and insurance areas. The Credit Union gets a piece of the action for this service (not exactly what you'd call having "your" best interest at heart).

Employees were under constant threat of being dismissed if they failed to accomplish their monthly minimum required sales quotas. This type of pressure on employees to sell credit union services is why it has become annoying (at a lot of banks and credit unions) for their members to call or stop by to conduct business.

Thought I'd share this little tidbit of inside information for the next time you call or stop by your Credit Union or Bank - don't harp at the teller or person on the phone - they're just doing their job (under duress). You could request to speak with a manager and have that person add notes to your account information to stipulate that you not be bothered by employees with any marketing efforts. They don't want to lose your business.
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Old 05-03-2012, 10:23 AM   #25
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Sarcastic reply: they will steer you to whatever yields them the highest commission. In most cases, whatever they recommend you can replicate on your own for less cost if you have the time and desire to do the research.
GrayHare,

That's what I thought. What I might do is open up a Vanguard account, and move some of my credit union CD money into it, as the cd's mature. I had the perfect world going for a while : Three 401k's with lots of options for investing, and a bunch of safe cd's at the credit union, at decent rates, but the rates are just getting too low lately. Thanks for the reply.

JG3
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Old 05-03-2012, 10:52 AM   #26
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Originally Posted by marko View Post
Yeah, from what I've heard, participation was somewhat limited; lots of conditions had to be met (existing CDs in place etc) as this was a special promotion thing.

If you got in on it, good for you!

Not something anyone could get in on though. Not sure if a non Vet or non Armed Services person could even join this CU.
I joined PenFed without being a veteran or military. At the time (a few years ago) you could qualify to join if you joined a military support group for a 1 time fee of $15 or $20.

I got in on the 10 year, 5% CDs so it's been worth it to me.
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Old 05-03-2012, 03:08 PM   #27
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Originally Posted by fritz View Post
The top sellers of the year were rewarded with membership in an "Exclusive Club" and this was celebrated publicly at a dinner for those employees (paid for out of Credit Union funds). Upper management constantly praised those in the lead via broadcast emails to all employees, while supervisors quietly wrote up those not making their monthly quota of successful sales referrals to the various credit union departments.
That still happens...........

Quote:
FYI - some departments of some Credit Unions are actually representatives of unnamed outside companies (contract type employees) - particularly investment and insurance areas. The Credit Union gets a piece of the action for this service (not exactly what you'd call having "your" best interest at heart).
That explains how Raymond James gets in all the local small banks and CUs..........

Quote:
Employees were under constant threat of being dismissed if they failed to accomplish their monthly minimum required sales quotas. This type of pressure on employees to sell credit union services is why it has become annoying (at a lot of banks and credit unions) for their members to call or stop by to conduct business.
People with money get hammered when they go inside a bank or credit union lobby.........its like a used car lot on a Satruday afternoon........

Quote:
Thought I'd share this little tidbit of inside information for the next time you call or stop by your Credit Union or Bank - don't harp at the teller or person on the phone - they're just doing their job (under duress). You could request to speak with a manager and have that person add notes to your account information to stipulate that you not be bothered by employees with any marketing efforts. They don't want to lose your business.
That is probably true for small banks and CUs, big banks like BOA and Chase could care less if you leave, they already have $1trillion+ in asset base..........
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Old 05-04-2012, 08:19 AM   #28
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A easy way to solve the problem is buy CD's over the phone it works like a charm.
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Old 05-04-2012, 09:36 PM   #29
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I seriously do not understand all the self-inflicted wedgies people are giving themselves when they hear about somebody offering a product or a service. If you are not interested just say "no".

On most days that end in a "y" I am offered at least one product or service in person, through the mail, on a door hanger, on TV, on the internet, or on the phone. One can say no, throw it in the trash, change channel, get an adblocker, or hang up, then get over it.

And somebody said go talk to them because you might learn something, and that is true.
+1.
No+Thanks.

My CU's investment advisor is salaried anyway. No doubt the CU is looking for more profitable products to sell, but I wonder if they waive the early withdrawal penalty for a CD.
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Old 05-04-2012, 10:04 PM   #30
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Their investment advisers may not be that bad at the CU. Our CU, which is huge by CU standards as it has many 10's or 100's of thousands of members and billions in assets, started offering investment advisory services a few years ago. I have seen them advertised in the monthly statement inserts but never been accosted about investing with them.

They charge a very reasonable flat 0.25% fee on assets under management with minimum account balances starting at $250 (just two hundred fifty bucks, not $250k minimum like some money managers). They offer a limited selection of low cost vanguard funds plus some funkier options like equity indexed annuities, and SPIA. For those wanted to color outside their lines, you can also buy anything in a fully self directed account (presumably paying 0.25% a year for a reality check). The advisers are salaried. They may get commissions on EIAs and SPIAs but I bet they disclose the heck out of them (knowing my CU).

For most folks who would be facing the default option of investing with an Ameriprise shark or just leaving it earning 1.5% in 5 year CD's at the credit union, I would wager that paying this 0.25% annual fee to have them tell you to put some or all of your portfolio in Vanguard Target Retirement 20xx based on your retirement date would work to most people's advantage.

And as for them seeing $170k sitting in cash, this is probably an entire life's savings for most CU members. They may know that a lot of people pulled out of the market back in 2008-09-10 and never got back in, or never even considered investments in the first place, and want to make sure they are making the most out of their money. At least that is the case at my very member oriented CU. My CU even advises me against certain products of theirs like their mortgages and HELOCs that carry rates higher than market rates for some reason.
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