Early Withdrawal Penalty

[jazz4cash]

I took the EWP hit on an Ally 3 YR CD today. It's only paying 1.55 and it was just opened last July. EWP is 3 mos interest. Online savings at Ally is 1.5. I was hesitant to crunch the numbers but then I found a "Should I break my CD calculator" on Depositaccounts.com. It's not perfect but let me see I could gain by moving. They also have a calculator that shows apy if you withdraw early.
https://www.depositaccounts.com/tools/break-cd-calculator.aspx
https://www.depositaccounts.com/tools/ewp-calculator.aspx

 

[SecondCor521]

How do you gain by moving from 1.55 to 1.5 and losing 3 months of interest?

 

[audreyh1]

Yeah - good question. Why not wait unless you need the funds?

I had an older 12 month CD and calculated the penalty to withdraw early and buy the 1.75% no penalty special, and found that switching would not make up for the loss in the remaining term. The penalty in $ was clearly in my CD.

Are you sure you are using the calculator correctly?

 

[jazz4cash]

I'm moving to 2.7%

 

[audreyh1]

I'm moving to 2.7%

OK that was the confusion.

 

[Debinnov a]

I have quite a few cds and if interest rates continue to rise, I may want to terminate some early. The only issue is I did not not record what the EWPs are for each one. Most were opened online so so don't have paperwork saved. Is calling each institution the best way to find out the early withdrawal penalty?

 

[audreyh1]

I have quite a few cds and if interest rates continue to rise, I may want to terminate some early. The only issue is I did not not record what the EWPs are for each one. Most were opened online so so don't have paperwork saved. Is calling each institution the best way to find out the early withdrawal penalty?

At Ally the actual early withdrawal penalty in $ for each CD is displayed online.

 

[jazz4cash]

I look over the website to find the penalty. If they have a search feature or FAQ it should come up. Ally shows current value if you liquidate. Or you could call if you find it easier and it doesn't hurt to ask if they will waive the penalty. Penfed does not charge the penalty on older IRA CDs if you are over 59.5. Some places waive it for RMDs.