Did the Pentagon FCU drop its rates?

[LRAO]

I remember that they were competitive for a while.

Now their MM "Certificates" (I'm assuming that's their name for a CD) are around 4.25% for 12-months...

What gives?

 

[brewer12345]

Um, while you weren't looking, interest rates generally dropped.

 

[LRAO]

OK, thanks.

 

[mickeyd]

I noticed today that I saw an ad for ING Direct that was tauting APY rates of 4.4%. I just scratched my head on that one. A while back ING seemed to always be on the other side of the current rate bubble. I guess that got burned and had to back off. PFCU must have also found itself in the same place.

With 5.1%, I'll just stay with Vanguard and the old reliable PMMF.

 

[Mr._johngalt]

I noticed today that I saw an ad for ING Direct that was tauting APY rates of 4.4%. I just scratched my head on that one. A while back ING seemed to always be on the other side of the current rate bubble. I guess that got burned and had to back off. PFCU must have also found itself in the same place.

With 5.1%, I'll just stay with Vanguard and the old reliable PMMF.

I can beat 5.1% in one phone call at any number of local banks.

JG

 

[d]

1) i've read elsewhere that PFCU tends to offer its best cd rates at year end; current rates for 3+yrs are 5.3+%
2) i expect that ING has attracted sufficient deposits to keep it happy, and no longer needs to be a rate leader.

 

[scrinch]

My local credit union is still offering 5.3 to 5.7% APY for CD's all the way from 7 months to 5 years. Plus 0.25% if you have a checking account there. They must be slow to react to the drop in interest rates.

 

[saluki9]

I can beat 5.1% in one phone call at any number of local banks.

JG

With daily availability?

Not likely

 

[Mr._johngalt]

With daily availability?

Not likely

Absolutely. Totally liquid.

JG

 

[renferme]

Seems as if all CD rates have been dropping the past several months.
My CU is no exception.
They "claim" that CD rates are based on treasuries; guess they've been dropping.
I've gone round and round about this with the guy that is the pres. of my CU - to no avail.
Does anyone understand why treasuries have been going down ? Can anyone explain?

 

[brewer12345]

Nope, nobody can give you a ulletproof explanation for why treasuries do anything. But rates have been dropping for the last several months.

 

[FinanceDude]

Nope, nobody can give you a ulletproof explanation for why treasuries do anything. But rates have been dropping for the last several months.

Probably a big longshot, but it could have anything to do with China announcing they were going to "offload" their treasuries through various currency markets??

 

[mickeyd]

I can beat 5.1% in one phone call

LOL...Not bad, they pay you over 5% just for calling them?

 

[saluki9]

Probably a big longshot, but it could have anything to do with China announcing they were going to "offload" their treasuries through various currency markets??

That would have the opposite effect. A country like China dumping their supply of treasuries (or even indicating they would) would cause treasury yields to rise, not fall.

 

[FinanceDude]

That would have the opposite effect. A country like China dumping their supply of treasuries (or even indicating they would) would cause treasury yields to rise, not fall.

I agree.....but the Fed was quick to point out this would have NO adverse effect on Treasury yields..........so wonder what's up

 

[jazz4cash]

I can beat 5.1% in one phone call at any number of local banks.

JG

A bank MMF over 5.1%.......wow! Care to offer specific details?

Best I've seen is 6% on 7yr CD at Navy Fed CU on 20k (i think) minimum

 

[brewer12345]

I agree.....but the Fed was quick to point out this would have NO adverse effect on Treasury yields..........so wonder what's up

Seems obvious to me that the bond market is pricing in a solid chance of a recession next year.

 

[Bob_Smith]

Absolutely. Totally liquid.

A bank MMF over 5.1%.......wow! Care to offer specific details?

Yep, this is definitely doable. My Dad has been getting much better than advertised CD rates for years, and in a form that is totally liquid. I go online and find the highest advertised 5 year CD rate I can find. He goes in and meets with the President of the local bank and negotiates from there. He almost always gets more than the highest rate I could find (never less), and always far more than the rate the bank says they pay. And he has a standing agreement that he can withdraw as much as he wants, anytime he wants, plus one bump-up if rates go higher (or he could just pull the money and go elsewhere if he finds a better deal). He has been doing this for around 10 years. Last time the banker told him, "Jeez, Bill, I already gave you the 'good-ole-boy" rate, and the Catholic rate (they go to the same church)... you're killing me here!". And that's how it goes - lots of good natured banter and feigned angst. So Dad kept grinding until he agreed to give him what he was asking - a 5 year CD rate in a totally liquid form. If the banker had just given in right away, my Dad probably would have been disappointed.

When it comes right down to it, when given a choice of not getting the money, or paying more for it, the bank (so far) has preferred to have the money. There's an inefficiency there that very few exploit.

Anyone could do this, but few probably do. It takes a certain personality to enjoy it. I think my Dad gets a bigger charge out of negotiating the deal than making the extra money. It takes him 5 minutes to negotiate the deal, and then he has a cup of coffee and shoots the bull for a half hour or so - discussing local gossip, commiserating about the priest who is wasting money on a big church remodeling nobody wants, and so on. Then he goes home and calls me to tell me what he got. It's the old rural way of doing business.

 

[cyclone6]

My credit union is still paying 5.98% APY on a 5-yr CD. (Foothills credit union in Lakewood, CO) The board seems to meet infrequently, and depending on where rates are headed, you can either get a good deal or a bad one. I just locked up a 1, 2 and 3 year CD last week. Next time they revise I'll guarantee they are lower.

Brewer - I agree about the bond market. Seems everyone is counting on a recession next year (that housing market is looking really ugly - http://www.buildingonline.com/news/viewnews.pl?id=5610&subcategory=127).

So the next question begs...put new found money in the market now while its still running up, or wait in MMs and CDs until we see what happens?

 

[jazz4cash]

BoB_Smith

OK if you guys say so, but sounds a bit more complicated than "a single phone call" that JG mentioned. Im probably just outta my league on this one.

 

[Bob_Smith]

OK if you guys say so, but sounds a bit more complicated than "a single phone call" that JG mentioned. Im probably just outta my league on this one.

Hi jazz4cash. I don't know about a single call. I suppose some could do it that simply if they already had a relationship established. My Dad is one, although he prefers face-to-face meetings. I would have no doubt that JG is another.

I have watched my father operate for years. He can go in and cut a deal like that and make a lifelong friend in the process. Someone else can go in, pay full freight, and piss 'em off in the process. There's a certain panache required to do it well. Growing up I had a ringside seat watching a master.

 

[Mr._johngalt]

I have watched my father operate for years. He can go in and cut a deal like that and make a lifelong friend in the process. Someone else can go in, pay full freight, and piss 'em off in the process. There's a certain panache required to do it well. Growing up I had a ringside seat watching a master.

I usually get what I want, and sometimes I make a friend. OTOH,
I sometimes "piss 'em off." In my case, I bump into a lot of folks
who can't take much confrontation/negotiation, which of course I thrive on.
When that happens we just have to disassociate as no forward progress
is possible. When I find someone who enjoys the give and take, then
the process can be enjoyable for both sides and that's when the
friends are made.


JG

 

[Mr._johngalt]

Brewer - I agree about the bond market. Seems everyone is counting on a recession next year (that housing market is looking really ugly - http://www.buildingonline.com/news/viewnews.pl?id=5610&subcategory=127).

So the next question begs...put new found money in the market now while its still running up, or wait in MMs and CDs until we see what happens?

I looked all over God's green pea patch for some kind of a bond
that would be attractive to me. Nothing. Thus, I went with the
"MMs and CDs until we see what happens" approach.

JG

 

[brewer12345]

So the next question begs...put new found money in the market now while its still running up, or wait in MMs and CDs until we see what happens?

Hard to tell. I think that housing will be a lot worse than the market seems to be pricing in, but it is hard to tell how much that will spill over into the general economy. If there is no big spill-over, or the general economy doesn't worsen independently, it will amount to just slightly slower growth.

So if you are an asset allocator, make sure you are comfy with the risk embedded in your current allocation and rebalance now that things have run up. If you are a stock picker/dirty market timer, "be fearful when other s are greedy and greedy when others are fearful."

 

[Mr._johngalt]

I usually get what I want, and sometimes I make a friend. OTOH,
I sometimes "piss 'em off." In my case, I bump into a lot of folks
who can't take much confrontation/negotiation, which of course I thrive on.
When that happens we just have to disassociate as no forward progress
is possible. When I find someone who enjoys the give and take, then
the process can be enjoyable for both sides and that's when the
friends are made.


JG

A little "galting" if you will permit me. I read about a guy once who would
go to car dealers on weekends just to negotiate, with no intention
of ever buying anything. It was recreation. Now, I suspected most folks would think this was nuts and I would never do it myself. However, I understood
the concept.

JG