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IRA CDs, Move or stay put?
05-14-2006, 11:19 AM
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#1
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 86
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IRA CDs, Move or stay put?
I've got these two annoying IRA CDs that I opened in the late 90s with a local bank in SoCal. They came up to maturity in April '06, and I accidentally let them renew without thinking about it much.
They're only about $2500 each, and they're only getting 2.45%, plus an annual fee of $25. They'll cost me $65 each to terminate early an move the funds elsewhere.
So my question is, do IRA CDs typically pay a lower rate than any other CDs? I have several other CDs (not IRAs) paying just under 5% right now, but when I check prices for IRA CDs, I see rates around what I am getting, 2.45%. What am I missing?
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Re: IRA CDs, Move or stay put?
05-14-2006, 11:45 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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Re: IRA CDs, Move or stay put?
Quote:
Originally Posted by ash
So my question is, do IRA CDs typically pay a lower rate than any other CDs? I have several other CDs (not IRAs) paying just under 5% right now, but when I check prices for IRA CDs, I see rates around what I am getting, 2.45%. What am I missing?
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This is a marketing gimmic I have noticed recently at banks, credit unions and S&L's.* They post a set of current rates.* They also have "specials" advertised to attract business.* They often differentiate between the regular posted rates and the "special" rates by having small variations in maturity lengths, like 13 months instead of a year.
If you just let your CD roll over, of course they give you the much lower posted rate.* New money or rollover money from customers who are paying attention gets the "special" rate.*
Irks me because I have several CD's coming due during the time of year I'm generally traveling.* I'd like to let them just roll over but I'll have to find a way to contact the bank during the 10 day grace period to make sure I get the very competitive "special" rate.
Ash, consider moving your IRA's to a brokerage house instead of a bank. You can probably get lower or zero annual fees and will have more investment options, including CD's.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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Re: IRA CDs, Move or stay put?
05-14-2006, 11:51 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2004
Posts: 3,431
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Re: IRA CDs, Move or stay put?
ash,
You may want to check out Pentagon Federal Credit UNion* www.penfed.org.
Here are their current IRA CD rates:
IRA Certificate Rates
Term Rate APY
1-Year 4.80% 4.92%
2-Year 4.89% 5.01%
3-Year 5.83% 6.00%
4-Year 5.83% 6.00%
5-Year 5.83% 6.00%
7-Year 5.78% 5.95%
Anyone can join . If you don't have a military connection, check their website. For a one-time fee of $20 or so you can join the Military Family Org., or something like that, and that qualifies you to be a PenFed member for life.
omni
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Re: IRA CDs, Move or stay put?
05-14-2006, 01:33 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
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Re: IRA CDs, Move or stay put?
I'll throw in a plug for a good CD broker I know (and which someone I know has an account with, and has been pleased with them).
www.fisn.com
The best rates are for callable CDs...usually with terms of up to 20 years, and usually callable after 6 months.
The fixed-term, non-callable CDs aren't as good as PenFed.com. However, if you're willing to try the callable route, it's a way to get some extra yield. Plus, if they do get called...you can always simply do another callable CD with a greater-than-prevailing market rate.
__________________
Dryer sheets Schmyer sheets
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Re: IRA CDs, Move or stay put?
05-14-2006, 09:10 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2004
Posts: 2,341
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Re: IRA CDs, Move or stay put?
Quote:
Originally Posted by omni550
ash,
You may want to check out Pentagon Federal Credit UNion www.penfed.org.
Here are their current IRA CD rates:
IRA Certificate Rates
Term Rate APY
1-Year 4.80% 4.92%
2-Year 4.89% 5.01%
3-Year 5.83% 6.00%
4-Year 5.83% 6.00%
5-Year 5.83% 6.00%
7-Year 5.78% 5.95%
Anyone can join . If you don't have a military connection, check their website. For a one-time fee of $20 or so you can join the Military Family Org., or something like that, and that qualifies you to be a PenFed member for life.
omni
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Another feature from PFCU for their IRA CDs, they let you close your IRA CD early after your reach 59 1/2 with no early withdrawal penalty.
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