Best CD, MM Rates & Bank Special Deals Thread 2020 - Please post updates here

[pb4uski]

Thanks, but I wish that I had learned that trick about 6 months earlier when GTE was offering their 3.0% 5-year add-on CD like some others on the forum did.

 

[calmloki]

Thanks, but I wish that I had learned that trick about 6 months earlier when GTE was offering their 3.0% 5-year add-on CD like some others on the forum did.

That one I'm in on, but have to admit I'm really glad it is insured, given the way people flooded them on their add-on account. Though the insurance is through the NCUA rather than the FDIC. Just was looking last night and discover that a single owner is insured up to $250k, but a single owner with two beneficiaries and $750K is only insured to $500k, unlike the same person in an FDIC insured account. Not that it makes any difference to me, but a surprise.

https://www.mycreditunion.gov/insurance-estimator

 

[Montecfo]

And an opportunity to say thanks again to pb4uski for the wisdom of opening multiple add-on CDs for a modest ($50) amount when the chance arises. That 1.34% at NavyFCU looked pretty sad when we opened them, but we may add to them as they look much better now that rates continued down. And had they gone up we had just a tiny amount at risk.

Just understand they can probably change the add-on feature unilaterally. Like when rates drop .

 

[pb4uski]

No, they cannot... that's the whole point and why you don't see them very often.

I think GTE Financial's at 3% for 5-years was a mistake on their part as they tried to backtrack on it soon after the offered it and realized what they had done... but some depositors challenged them and threatened to raise a stink with regulators and they acquiesced.

The NCUA limit is the only thing keeping many of us from loading it up any more than we have since the credit risk comes into play for any deposits over the NCUA limit.

 

[Montecfo]

No, they cannot... that's the whole point and why you don't see them very often.

I think GTE Financial's at 3% for 5-years was a mistake on their part as they tried to backtrack on it soon after the offered it and realized what they had done... but some depositors challenged them and threatened to raise a stink with regulators and they acquiesced.

The NCUA limit is the only thing keeping many of us from loading it up any more than we have since the credit risk comes into play for any deposits over the NCUA limit.

Oh, yes, they can change them. I know, it happened to me. It was buried the fine print. I expect this is typical.

It does not mean they would change it casually.

 

[pb4uski]

Ok, whatever you say.

I did an add-on about 3 months after I bought the GTE Financial CD and not a peep from them. Also did an add-on deposit to the Navy Federal CDs that I owned and not a peep from them either. I've never been denied doing an add-on deposit to an add-on CD... ever.

 

[pn3069]

Ok, whatever you say.

I did an add-on about 3 months after I bought the GTE Financial CD and not a peep from them. Also did an add-on deposit to the Navy Federal CDs that I owned and not a peep from them either. I've never been denied doing an add-on deposit to an add-on CD... ever.

Can you please elaborate a bit about add-on CDs? Where does one find new add-on CDs?

Thanks in advance

 

[calmloki]

Did a major chunk into my GTE 3-11-20 and $13k more on 7-15-20. There was some naysaying on their part early in the year, but I believe they ran into some legal issues and are now allowing add-ons without voiced complaint. Worth trying/calling them again.

pn3069: Add-on CDs are rare so you gotta keep your nose in the air - this is a good thread to follow, because there are a number of people beating the bushes and hunting better interest products.

 

[pn3069]

pn3069: Add-on CDs are rare so you gotta keep your nose in the air - this is a good thread to follow, because there are a number of people beating the bushes and hunting better interest products.

Thank you!!

 

[pb4uski]

Can you please elaborate a bit about add-on CDs? Where does one find new add-on CDs?

Thanks in advance

The only current source that I know of is Navy Federal Easy Start Certificates but they are not compelling at this writing... 0.8% for 24 mos and 0.7% for 12 mos.... in each case 0.10% lower than their regular CDs that don't allow additional deposits. YMMV.

https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php

Look under the "More" tab.

 

[Montecfo]

Ok, whatever you say.

I did an add-on about 3 months after I bought the GTE Financial CD and not a peep from them. Also did an add-on deposit to the Navy Federal CDs that I owned and not a peep from them either. I've never been denied doing an add-on deposit to an add-on CD... ever.

I think you misunderstood me. I simply said they CAN change it. Not that they will in your case.

In my case it did happen. Like you, I thought they could not do this, but I was wrong.

Just good to be forewarned.

 

[Hopeful]

I think you misunderstood me. I simply said they CAN change it. Not that they will in your case.

In my case it did happen. Like you, I thought they could not do this, but I was wrong.

Just good to be forewarned.

Yes - I remember about 5 years ago, same thing happened to us. I believe it was Valor credit union. We had $1000 add on CD, while we were waiting for $100K to free up. Interest rates dropped, and they cancelled add on feature. People were pretty upset. They did allow you to withdraw the original funds penalty free. Probably not real common, but definitely left a sour taste in my mouth for add on CD's.

 

[BeachOrCity]

Yes - I remember about 5 years ago, same thing happened to us. I believe it was Valor credit union. We had $1000 add on CD, while we were waiting for $100K to free up. Interest rates dropped, and they cancelled add on feature. People were pretty upset. They did allow you to withdraw the original funds penalty free. Probably not real common, but definitely left a sour taste in my mouth for add on CD's.

I think people should differentiate between what a business might try to do and what they legally can do. Any financial institution can “try” to cancel the add on feature.

GTE “tried” to do so as well. But people came out in arms to make sure they knew they would be challenged either legally or thru their regulator and they backed down.

Many businesses expect consumers to honor their agreements but when there shtf they don’t do so themselves. Refunds for cancelled by the vendor travel in Covid times comes to mind.

One has to stand up to them to win, but you can win.

Btw. I was worried this whole cd thing might imperil gte. I looked at their 2q financials. They have a large increase in deposits but it doesn’t look like this fiasco will sink them. Just make them somewhat less profitable.

 

[pb4uski]

Good to know on the last part. I originally only funded ~$215k since at 3% that would grow to the $250k NCUA limit in 5 years. Then I got greedy and did an add-on deposit to bring the total to $250k, so when the CD matures it will be over the NCUA limit by ~$40k.

 

[Montecfo]

I think people should differentiate between what a business might try to do and what they legally can do. Any financial institution can “try” to cancel the add on feature.

GTE “tried” to do so as well. But people came out in arms to make sure they knew they would be challenged either legally or thru their regulator and they backed down.

Many businesses expect consumers to honor their agreements but when there shtf they don’t do so themselves. Refunds for cancelled by the vendor travel in Covid times comes to mind.

One has to stand up to them to win, but you can win.

Btw. I was worried this whole cd thing might imperil gte. I looked at their 2q financials. They have a large increase in deposits but it doesn’t look like this fiasco will sink them. Just make them somewhat less profitable.

My recollection was that GTE messed up the disclosure that would allow them to change it. Some investors received the disclosure, some did not. So they caved on it.

In my case, I read everything. But the disclosure was in the general rules for "accounts" of which the CD met the definition. The CD disclosures was not where their out language was. It allowed them to change a "term" of which virtually anything is a "term"

And yes, trust me, I went to the mat. They agreed it was bad business and they agonized over it. They originally changed it with no notice. Then they went back and said the add-on feature would go away after 30 days. The 30 days notice was required per their docs.

The CD was the most feature laden I have ever seen. In addition to the add on feature, you could take a 50 percent penalty free withdrawal, and reset the rate if rates rose during the term.

I wish I had put in more in that 30 day period. But just caveat emptor.

 

[Dtail]

Good to know on the last part. I originally only funded ~$215k since at 3% that would grow to the $250k NCUA limit in 5 years. Then I got greedy and did an add-on deposit to bring the total to $250k, so when the CD matures it will be over the NCUA limit by ~$40k.

We have one taxable GTE CD and one IRA version.
With all these low rates, I still contemplate whether to go over the 250k limit.

 

[jazz4cash]

The CD disclosures I've read pretty much all say "anything is possible if the credit union is going under" or words to that effect, so I agree with Montecfo in that regard but it is also true that depositors must hold financial institutions accountable as others have suggested. I think Valor credit unions bad judgement caused them to be closed down (bought out). A lot of this is very well documented on depositaccounts.com. As for me NFCU has a very long history of add-on CDs. They don't advertise the feature broadly and use reasonable limitations to manage their exposure. I've been following them for a looong time.....

https://www.early-retirement.org/fo...dd-on-cd-60731.html?highlight=navy+fcu+add+on

 

[calmloki]

Good to know on the last part. I originally only funded ~$215k since at 3% that would grow to the $250k NCUA limit in 5 years. Then I got greedy and did an add-on deposit to bring the total to $250k, so when the CD matures it will be over the NCUA limit by ~$40k.

Why not add a beneficiary thus bumping the NCUA insured amount up to $500k? We added two - cumbersome as we mailed forms back and forth to GTE, but now have NCUA insurance up to $500k if I understand it right. Our CD is in Gal's name with me and her sister as beneficiaries, thus making it an informal trust.

 

[pb4uski]

Because it is an IRA so adding a beneficiary doesn't increase the NCUA coverage.

 

[Ready]

I have a CD coming due in February that currently pays 3.5%. CD rates look pretty bleak these days. Bond funds don't look much better unless I go either long term or junk. I need to do something with the cash once it matures.

I'm curious what others who have high rates CDs maturing soon are thinking. I've never purchased individual bonds before. I am currently using the interest on my CD to pay my living expenses. I don't want to put any more in the equities markets.

I have a fair amount in CA municipal bonds so I could just add to that fund. Rates are still only around 1% though and there is little chance of the fund going up in value with interest rates being so low.

Any suggestions?

 

[pb4uski]

DERI and Toyota IncomeDrive Notes are paying about 1.5%.

Investment grade preferred stocks are paying ~5-6%... just be careful about call risk.

 

[Montecfo]

Well, anything you consider is by definition going to be higher risk. You only get that by increasing duration, taking credit risk, buying equities or all 3. So you have to be comfortable with that. Here are some ideas:

The Merger Fund (MERFX)- it is a merger arbitrage find so it is equity, but the holdings are short term and supported by pending mergers. Has typically returned 1-3 % with relatively low risk, particularly in a low rate environment. Check the payment interval on distributions, it seems.ot may be skewed toward annual if memory serves.

Nuveen Municipal Value (NUV)-this is a closed end fund but no leverage. It holds longer duration higher yielding munis. The duration is long, it is not volatile. Look at the history. Yields 3.5-4% tax free.

Metropolitan West Unconstrained Bond (MWCRX). Nontraditional bond fund. Look at the Morningstar. Duration under 2 yrs. 2-3 %. There is also now an institutional share class which is a bit lower expense.

River Park Short Term High yield-(RPHIX,)-small unique very short duration fund which invests in short term high yield often small issue debt, too small for the bigger players. Duration is about 6 months. You want to look at Morningstar and also read the material at their website to understand their process. 2-4%

Double Line Total Return Bond (DLTNX)-lower duration than other well regarded intermediate bond funds. Returns about 3-4%. Check the Morningstar.

Those are some ideas. They are all higher risk than CDs obviously. I am in the same boat with CDs maturing this month. I do not rely on the income but I also want the portion of my portfolio which does not have to be risk free to earn some reasonable return. I own or have owned all of these except the Merger Fund.

Good luck.

 

[gcgang]

I have a CD coming due in February that currently pays 3.5%. I am currently using the interest on my CD to pay my living expenses. I don't want to put any more in the equities markets...
Any suggestions?

A suggestion: Don’t use such a highly variable thing as the interest rate on a CD to determine your spending.

If you look at historical dividend on S&P500, it fluctuates much less than the rate on CDs and both your income and principal value go up pretty good over long periods of time. If you’re using earnings on investments to determine your living expenses I think you’ll enjoy a much better lifestyle in S&P or the like.

If you use Fixed Income for stability of principal, and CDs are more like Cash than FI, so I bet that’s as important as income to you, you may want to spend some of your stash to keep the rest “ safe”.

 

[RetiredAndLovingIt]

Just sharing some CD specials from the other site that I use. USAlliance is good for CD's but I don't use them for IRAs due to $3 monthly fee.

https://www.depositaccounts.com/blog/

 

[jazz4cash]

I have a CD coming due in February that currently pays 3.5%. CD rates look pretty bleak these days. Bond funds don't look much better unless I go either long term or junk. I need to do something with the cash once it matures.



I'm curious what others who have high rates CDs maturing soon are thinking. I've never purchased individual bonds before. I am currently using the interest on my CD to pay my living expenses. I don't want to put any more in the equities markets.



I have a fair amount in CA municipal bonds so I could just add to that fund. Rates are still only around 1% though and there is little chance of the fund going up in value with interest rates being so low.



Any suggestions?

Many here in the same boat with CDs maturing. I have some add-on CDs I can fund up to the limit and buying a 5yr fixed annuity that pays 3.05% with the rest. I’d checkout those suggestions from Monte also. They look attractive.