Funding those Penfed 5% CDs

[clifp]

I locked in a couple of those Penfed 5% 10 year and knew I needed to get some more money into my share account at Penfed.

I found out a nasty surprise. Penfed limits you to $5,000 for an ACH transfer from your checking/brokerage account to your shareaccount.

Fortunately they do allow you to make transfers out in the future so I have a bunch of $5,000 scheduled for next week. Just a warning if you hadn't done so.

 

[FIREd]

ouch, good to know! Thanks for the heads-up.

Edit: actually I am limited to $50 daily for ACH transfers from my checking account... Can I wire the money in?

 

[Texas Proud]

You might want to check.... some places also have a monthly ACH limit... so you might not be able to make all those $5K transfers...

 

[hellbender]

Don't ACH Then

I found out a nasty surprise. Penfed limits you to $5,000 for an ACH transfer from your checking/brokerage account to your shareaccount.

Add the account you want to transfer from as an external account to your Penfed account. Then simply select the external account as the source of funds when you set up the CD online. They will do a direct debit of the external account. I routinely fund Penfed CDs this way. Very easy. Free too. You earn interest on the funds immediately. I don't know if there is a limit this way but you can transfer much more than $5K.

 

[DRiP Guy]

Add the account you want to transfer from as an external account to your Penfed account. Then simply select the external account as the source of funds when you set up the CD online. They will do a direct debit of the external account. I routinely fund Penfed CDs this way. Very easy. Free too. You earn interest on the funds immediately. I don't know if there is a limit this way but you transfer much more than $5K.

Great tip, thanks!

Say, does anyone know:

Are we at this point 'locked-in' on both amount and duration for our 'reservations'?

I had a relatively small CD roll over, so that allowed me to make a reservation, so I did so for a ten year certificate.

What I would *really* like to do though, is add quite a bit more, and also go for the seven year duration instead of the ten year.

 

[FIRE'd@51]

What is the early redemption penalty on these should interest rates rise significantly?

 

[FIREd]

Add the account you want to transfer from as an external account to your Penfed account. Then simply select the external account as the source of funds when you set up the CD online. They will do a direct debit of the external account. I routinely fund Penfed CDs this way. Very easy. Free too. You earn interest on the funds immediately. I don't know if there is a limit this way but you can transfer much more than $5K.

That works well for regular CDs. But for reservations, the only option is to fund from a PenFed account. I tried to edit my reservations so as to fund the 5% CDs directly from my external checking account and the option is not available.

Edit: I just called PenFed. My only viable funding options are wiring the money in or sending a check by mail.

 

[73ss454]

I did 100K transfer the other day from Vanguard and it went right through.

 

[Martha]

Add the account you want to transfer from as an external account to your Penfed account. Then simply select the external account as the source of funds when you set up the CD online. They will do a direct debit of the external account. I routinely fund Penfed CDs this way. Very easy. Free too. You earn interest on the funds immediately. I don't know if there is a limit this way but you can transfer much more than $5K.

Yup. I did this last year and it worked great. After wasting my time doing a series of $5000 transfers.

 

[kaneohe]

Guess we should have started this thread earlier. I had rejected having PenFed ACH funds in bc I thought they charged $5. Then after calculating how much interest I would lose bc of mail transit time, I reconsidered and then discovered the 5K daily limit. Don't like the $30 wire fee either so I'm finally doing my USPS experiment. Last time I rolled over an IRA to PenFed, it took a week to go to their OR site (from next door in CA). So now I'm splitting funds between their OR and NE sites (was going to do a 3 way to DC
but no free envelope that I thought I had). Theory is that close stuff goes by truck and far stuff goes by plane and sending to farther site might actually be faster.

 

[brewer12345]

Wow, you guys wait until the last minute. As soon as I reserved my CD I sent the money to sit in the PF share account. Why monkey around for a percent or two?

 

[FIREd]

Wow, you guys wait until the last minute. As soon as I reserved my CD I sent the money to sit in the PF share account. Why monkey around for a percent or two?

Until 3 days ago, the money going to the PenFed CDs was tied in stock options...

 

[LOL!]

Why not mail them a check and benefit from the float?

 

[Sue J]

I have the cash in the PenFed Regular Share account and I wanted to transfer it to the Roth IRA share account to fund the CDs for a Roth IRA. All the accounts are all set up but you can't transfer from Regular Share to Roth IRA share online, you have to call and have them do it.

I'm doing a 2010 Roth IRA and also a 2011 Roth IRA.

We still have the ability to edit our CD reservations, but you can only reduce them or change the date, you can't increase your reservation.

 

[kaneohe]

We still have the ability to edit our CD reservations, but you can only reduce them or change the date, you can't increase your reservation.

......so if the mailed check gets delivered early, we can start the CD earlier than reserved?

for LOL: some of us are in the unfortunate situation where the the funds are in a savings account; they have to be moved to a no-interest checking to fund the check. There is a small overdraft fee if you don't move the funds to checking before the check is presented so it's kind of a game as to when to move the funds. At these interest rates, not a big deal but still.............

 

[Dawg52]

I did 100K transfer the other day from Vanguard and it went right through.

Me too, only from Fidelity.

 

[jazz4cash]

Me too, only from Fidelity.

I can't get Fidelity to transfer funds from my IRA or 401k. They only want to mail me a check. I have a penfed branch within 12 miles or may do the scan deposit.

 

[Nords]

After wasting my time doing a series of $5000 transfers.

That direct-funding option never occurred to me either...

 

[73ss454]

......so if the mailed check gets delivered early, we can start the CD earlier than reserved?

for LOL: some of us are in the unfortunate situation where the the funds are in a savings account; they have to be moved to a no-interest checking to fund the check. There is a small overdraft fee if you don't move the funds to checking before the check is presented so it's kind of a game as to when to move the funds. At these interest rates, not a big deal but still.............

My reservation was for the 14th of Jan and once my money was received I asked to move up the date to the 1st and it was no problem.

 

[kaneohe]

My reservation was for the 14th of Jan and once my money was received I asked to move up the date to the 1st and it was no problem.

73ssxxx.........thanks! good to know......certainly better to light a candle than to curse the dark.......tho I thought I had asked and didn't get a straight answer or maybe just dreamed that.......

 

[kaneohe]

I get the impression that direct funding and ACH are quite different so I guess I accept that. What I don't understand is why they are different so , hopefully in layman's terms, can someone enlighten me......why one free, one charged; one small daily limit, other , not,etc.

 

[Corporate ORphan]

5% 10 year still available?

I have a CD coming up at a local credit union and was thinking of moving it to Pen Fed since it seems to have a good reputation on this site. I didn't see the 10 year CD for 5%. Are they still offering it? The rate for a 5 year wasn't much more than what I can get locally so it wouldn't be worth moving it.

Thanks!

 

[73ss454]

The 10 year program was taken away a while back.

Rumor has it that there is going to be another program sometime in January but I don't know for sure. Also, I have no idea what it might be.

 

[hellbender]

I get the impression that direct funding and ACH are quite different so I guess I accept that. What I don't understand is why they are different so , hopefully in layman's terms, can someone enlighten me......why one free, one charged; one small daily limit, other , not,etc.

I believe the difference lies in the level of risk perceived by PenFed. It looks like with the ACH debit they post amounts to be transferred to your account before they are actually received. I believe they put a 30 day hold on funds directly transferred to a CD.

 

[Stevewc]

My understanding is: When funding a CD there is no limit on a ACH transfer.
I was told that by a rep. a while back. I moved 1k in a single move at that time.
I'm a new member so no special privilege..
Steve