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Is this rate as good as it looks?
Old 06-26-2006, 12:45 PM   #1
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Is this rate as good as it looks?

I found a CD rate with Heritage Community Credit Union, which looks pretty good to me.* It's a relatively new branch near me.* *www.heritageccu.com.* NCUA insured.

The deal is:* 7.00% APY, 7 month term, $7000 minimum deposit.*

My other CDs are at 5 or 5.5% APY, so even though this is a shorter term is ithe rate as good as it looks to me?* *Any thoughts?
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Re: Is this rate as good as it looks?
Old 06-26-2006, 01:01 PM   #2
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Re: Is this rate as good as it looks?

The credit union itself looks solid from a credit perspective, ignoring the NCUA insurance. Plenty of equity, good loan quality, makes a little money. Just a small company.

I didn't look at the CD offer, so take a close look at the fine print. If it checks out, looks like a deal.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 01:05 PM   #3
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Re: Is this rate as good as it looks?

Quote:
Originally Posted by KB
The deal is:* 7.00% APY, 7 month term, $7000 minimum deposit.*
My other CDs are at 5 or 5.5% APY, so even though this is a shorter term is ithe rate as good as it looks to me?* *Any thoughts?
"Anyone who lives, works, worships or goes to school in Sacramento or Placer Counties is eligible to join!"

Offer expires 27 June (tomorrow) July (in one month).* Offer good only on new deposits.* 180-day early withdrawal penalty.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 01:11 PM   #4
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Re: Is this rate as good as it looks?

Hmmm, I thought it said July 27. I'll doublecheck. I meet the criteria by living in Sacramento County.

Thanks for the feedback. It's only a 7 month CD with a 6 month penalty for early withdrawal. Kinda funny. I have some spare cash that I won't need until next year, so I'm going to go ahead.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 01:20 PM   #5
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Re: Is this rate as good as it looks?

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Originally Posted by KB
Hmmm, I thought it said July 27.
Wups, you're right. I misread.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 01:38 PM   #6
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Re: Is this rate as good as it looks?

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Originally Posted by Nords
Offer good only on new deposits.
Teaser rate to get new accounts/depositors. Good for those shopping rates, but not so good if you want to keep your money in the same place. You make a couple of bucks for shopping banks.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 02:42 PM   #7
 
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Re: Is this rate as good as it looks?

If their rates are not very competitive after the 7 month CD expires, it may not be worth the hassle of switching banks. And that is what they are counting on.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 02:49 PM   #8
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Re: Is this rate as good as it looks?

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Originally Posted by Cut-Throat
If their rates are not very competitive after the 7 month CD expires, it may not be worth the hassle of switching banks. And that is what they are counting on.
My thoughts too. If you're moving $7000 to a CD there, and you get 7% instead of 5% everywhere else, you're only making an extra $82. Of course if you add enough zeroes to the principal, it can become a significant amount of money.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 02:52 PM   #9
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Re: Is this rate as good as it looks?

Theres probably also an 'auto reinvestment' of the cd that ends up getting a poor rate. Most of the cd's i've bought automatically reinvested in 'similar time period' cd's unless you told the bank not to do it well in advance.
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Re: Is this rate as good as it looks?
Old 06-26-2006, 06:37 PM   #10
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Re: Is this rate as good as it looks?

If the bank wasn't really close to my house, I wouldn't even think of it.* I don't mind having CDs in multiple locations as long as they are only a few miles from home.* It's in the same shopping location as Sam's club, so I'm there regularly anyway.

I usually go into the branch a week or two before a CD expires and set up the withdrawal.* I'll just put the money back into my MM when it expires.*

I have 20K in another CU that just opened in January.* Maybe they'll get into an interest battle....
Lots of growth in my town these days.



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