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Should Auld Acquaintance - PenFed
Old 01-06-2015, 09:59 AM   #1
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Should Auld Acquaintance - PenFed

Waxing nostalgic this morning - our share account at PenFed is much fatter than it's $5 norm today. Some 5 year certs that were paying 4% APY and had converted from 6.25% 3 year certs matured today and were plunked into the account. Our little test deposits from Vanguard also hit there today, so I can buy shares and pay directly from PenFed. Life is change - I remember feeling pretty canny to only lock up our money for 3 years back when PenFed was paying 6.25% - none of that crazy 5 or 7 year commitment for me!

Just can't bring myself to lock in a whopping 1.41 - 1.76% rate - instead I'm trying to bring myself to buy some more VEU. emphasis on the EW.
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Old 01-06-2015, 10:09 AM   #2
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A few years ago, I swallowed hard and put some money into 5 year 2.25% CD's. I wondered if I was being a chump. Today, those CD's and my 3% PenFed CD's make me feel like a champ.

The War On Savers continues, and we fight like the Swamp Fox. Hit and run, grabbing a few extra interest dollars where we can. The goal is to stay alive and earn descent interest again.

Swamp Fox Memorial - Francis Marion
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Old 01-06-2015, 10:27 AM   #3
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A lot of money will be pouring out of PenFed as those CD's mature... One of mine matured at the end of December and it's in the process of being transferred. Will probably end up in a 1 percent on-line savings account until the next 3 percent or better opportunity appears.
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Old 01-06-2015, 10:32 AM   #4
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Quote:
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... earn descent interest again.
Yep. Interest earnings have been in a descent for way too many years...
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Old 01-06-2015, 10:33 AM   #5
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The War On Savers continues, and we fight like the Swamp Fox. Hit and run, grabbing a few extra interest dollars where we can. The goal is to stay alive and earn descent interest again.

Swamp Fox Memorial - Francis Marion
Thanks for the hometown hero shoutout!
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Old 01-06-2015, 10:36 AM   #6
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You did that on purpose. Descent interest is what we now have. It's a wacky time - we keep being offered and accepting credit card offers that pay $400+ signup bonus for spending in our normal way. tax free! Bet we pick up 2-3 thousand /year just in signup money, while paying no credit card interest. Kinda confirms my opinion that credit cards are the devil, but I don't mind twisting the devil's tail.
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Old 01-06-2015, 10:41 AM   #7
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I made up for you as I bought a 1 year CD at PenFed today. Their 1 year 1.1% rate is higher than Jan of last year.

Sure glad I picked up those 3% 5 year CDs in Dec of 2013!
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Old 01-06-2015, 03:45 PM   #8
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I made up for you as I bought a 1 year CD at PenFed today. Their 1 year 1.1% rate is higher than Jan of last year.

Sure glad I picked up those 3% 5 year CDs in Dec of 2013!
So, respect, but what is the thinking? Barclays or TIAAdiect are paying 1 and 0.85% and you can pull the funds at any time. We use them to hold cash that is in between investment opportunities. We also tend to have a year or more in cash in that type of account, but I guess for us the likelihood of a lucrative investment popping up within a year exceeds our concern we would need the cash. So is there no more lucrative and safe option? Can't one just sell stocks and generate cash? Are stocks really so different than PenFed certs? I mean, yeah, maybe stocks lose 15% or gain 15% vs. 1% in cash savings, but is that 15% potential loss a budget breaker on a year's worth of cash? OTOH, if the cash pile is massive does it really need to be that safe (like willing to lose .7% to inflation for the safety safe)?
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Old 01-06-2015, 05:16 PM   #9
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So, respect, but what is the thinking? Barclays or TIAAdiect are paying 1 and 0.85% and you can pull the funds at any time. We use them to hold cash that is in between investment opportunities. We also tend to have a year or more in cash in that type of account, but I guess for us the likelihood of a lucrative investment popping up within a year exceeds our concern we would need the cash. So is there no more lucrative and safe option? Can't one just sell stocks and generate cash? Are stocks really so different than PenFed certs? I mean, yeah, maybe stocks lose 15% or gain 15% vs. 1% in cash savings, but is that 15% potential loss a budget breaker on a year's worth of cash? OTOH, if the cash pile is massive does it really need to be that safe (like willing to lose .7% to inflation for the safety safe)?
I already have an account at PenFed, so transfers are easy.

I don't need access to the money for a year. So I can earn a little more than my high yield savings account is currently paying. My current year funds are already in such an account.

Yes, of course stocks are completely different than PenFed certs. Do you really ask that question with a straight face?

I never invest short-term money in stocks. Yes, of course a 15% loss on the cash hurts a budget counting on a years worth of cash. I'm not losing 0.7% to inflation either - less than that. Last inflation reading was 1.3%. I expect inflation to continue to drop this year as well.

I have a retirement portfolio invested in riskier stuff for the long term. I don't need to put my short-term funds there too.
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Old 01-06-2015, 06:49 PM   #10
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I did not get in on those high cd's but I still love Penfed compared to the big banks. They have been good to me in other ways.
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