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Old 12-16-2013, 06:02 PM   #141
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That ACH system is pretty slick & instantaneous. I'm on the penfed party train. If the economy picks up more speed in 2014 that 3% cd may get redeemed sooner rather than later.
Be aware you are looking at 365 days interest penalty after the first year for early redemption, if you redeem in the first year you earn $0 for interest. Also I think you have a substantial time (weeks?) to back out of the cd if you decide against it. (but I'm in the same boat - show me a good enough better deal and I may jump ship on PenFed).
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Old 12-16-2013, 06:48 PM   #142
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I'm just a bear with a very small brain but I think rates could climb just as fast as they fell. Buyer beware applies to any & all things financial. Chasing rates stocks or women my results are mixed on all three counts. Good luck to me.
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Old 12-16-2013, 07:04 PM   #143
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Free Bird, I tend to agree with you that caution is a good idea along with one of my favorite preventive medicines - diversification. A ladder of CD's from 1-5 years, with the money evenly spread is my plan for my CD's. If I find that I can read the Fed Chairman's mind, or glue my crystal ball together, or get my time machine working, I may do something different. :-)
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Old 12-16-2013, 07:33 PM   #144
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I didn't used to get a mental hernia buying a cd but ever since the banks hurled a financial asteroid at me & Ive had to learn what QE is. I've had learn what to big to fail means. I had to learn that I'm the lender of past resort. I used to only know one Buffet & he plays a guitar. Are we having fun yet?
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Old 12-16-2013, 10:32 PM   #145
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Be aware you are looking at 365 days interest penalty after the first year for early redemption, if you redeem in the first year you earn $0 for interest. Also I think you have a substantial time (weeks?) to back out of the cd if you decide against it. (but I'm in the same boat - show me a good enough better deal and I may jump ship on PenFed).
Does early redemption (less than a year) reduce the principal in the CD?
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Old 12-16-2013, 10:38 PM   #146
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Does early redemption (less than a year) reduce the principal in the CD?
No.
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Old 12-18-2013, 05:48 PM   #147
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Today's article in the WSJ about how central banks are frustrated by the very low inflation rates (?!?!) makes me think the 3% PenFed deal may be better than first thought. According to the article most developed countries are seeing overall inflation rates of 1% to 2%, and some central bankers are fearing a deflation might be possible. I have to wonder about that. In any event, 3% actually puts us ahead in today's game, even after taxes.
Of course, predicting the future is not my best skill. :-)
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Old 12-18-2013, 06:42 PM   #148
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The penfed 60 month CD with a 12 month dividend forfeiture spanking is a bet by them that borrowing costs will normalize to reasonable degree. That 12 month forfeiture keeps everyone honest. Advantage penfed. No suprises there.
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Old 12-19-2013, 12:01 AM   #149
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Thanks to this thread I opened a small CD with penfed. Signing up was surprising easy (even though the penfed site looks stone age).
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Old 12-19-2013, 07:35 AM   #150
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I had originally split my PenFed IRA into a 2% 3 year CD and a 3% 5 year CD. You guys convinced me that the 5 year was the way to go because even if I break it after 3 year I end up with the same balance as I would with the 3 year CD so anything beyond that is gravy. So I called and changed what I had to five 5 year CDs so if I do want to make changes the penalty won't be on the whole balance. That said, I expect i will hold the entire 5 year term unless interest rates rise a lot.
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Old 12-19-2013, 08:41 AM   #151
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I called PenFed today and they say this deal is "subject to change at any time" However, they (Customer Service) has been told that the deal will be active till January 31st 2014.

Just FYI.
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Old 12-19-2013, 10:05 AM   #152
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I had originally split my PenFed IRA into a 2% 3 year CD and a 3% 5 year CD. You guys convinced me that the 5 year was the way to go because even if I break it after 3 year I end up with the same balance as I would with the 3 year CD so anything beyond that is gravy. So I called and changed what I had to five 5 year CDs so if I do want to make changes the penalty won't be on the whole balance. That said, I expect i will hold the entire 5 year term unless interest rates rise a lot.
+1

I can break the PenFed 5 year CD after two years and actually earn a tad more than the best 2 years CD I can find from the local banks and credit unions.
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Old 12-21-2013, 09:16 AM   #153
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So... I decided to transfer some IRA funds from Vanguard to a PenFed 5yr CD. Following the PenFed instructions online...

Quote:
If you would like to transfer a preexisting IRA to PenFed, complete and
return all three copies of the IRA Transfer Authorization form on page 12.
...I printed out and completed three copies of the IRA Transfer Authorization form, asking that $X amount be transferred from my Vanguard Money Market IRA account to an IRA CD at PenFed.

I was surprised this morning when I saw that Vanguard had transferred the funds to PenFed - twice. It seems PenFed thought the three copies (specified in their instructions) were three separate requests for transfer, and submitted all three to Vanguard. Vanguard only honored two of the requests because there were insufficient funds in my Money Market account to cover the third request. Sheesh...

Lesson learned: When all else fails, sometimes following instructions doesn't improve your chances of success.
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Old 12-21-2013, 10:24 AM   #154
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Oops. Ouch! Hopefully this can be reversed?
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Old 12-21-2013, 11:02 AM   #155
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I'm OK with the two CD's PenFed transferred but called and told them 'enough already'. Also contacted Vanguard to explain what happened.

Suggested PenFed revise their instructions...
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Old 12-21-2013, 11:09 AM   #156
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Wish I could get this rate. Is there an easy way to qualify? Nothing else seems even close.
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Old 12-21-2013, 11:19 AM   #157
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Wish I could get this rate. Is there an easy way to qualify? Nothing else seems even close.
Pen Fed is one of the easiest credit unions to qualify for. Join the National Military Family Association for a year and you are in.

Sheesh, Navy I had to find a back door to weasel in through.
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Old 12-21-2013, 02:08 PM   #158
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So... I decided to transfer some IRA funds from Vanguard to a PenFed 5yr CD. Following the PenFed instructions online...

...I printed out and completed three copies of the IRA Transfer Authorization form, asking that $X amount be transferred from my Vanguard Money Market IRA account to an IRA CD at PenFed.

I was surprised this morning when I saw that Vanguard had transferred the funds to PenFed - twice. It seems PenFed thought the three copies (specified in their instructions) were three separate requests for transfer, and submitted all three to Vanguard. Vanguard only honored two of the requests because there were insufficient funds in my Money Market account to cover the third request. Sheesh...

Lesson learned: When all else fails, sometimes following instructions doesn't improve your chances of success.
I thought the instructions were poor as well but I only sent them one. I guess it pays to not follow instructions.

Do the two transfers put you over the FDIC limit?
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Old 12-21-2013, 02:26 PM   #159
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Do the two transfers put you over the FDIC limit?
Thankfully, no.
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Old 12-21-2013, 02:27 PM   #160
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I'm trying to grasp the NCUA insurance rules. Are IRA accounts only insured up to 250k? Is there any way to increase the insurance an IRA?
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