New at PenFed - 3% 5yr certificates

[golfersailor]

Sorry I must have not had enough coffee this morning. I swear at 6:30 am it said 2%.
My bad
Term Dividend Rate APY
6 Month 0.300% 0.30%**
1-Year 0.750% 0.75%
2-Year 1.400% 1.41%
3-Year 2.000% 2.02%
4-Year 2.200% 2.22%
5-Year 3.000% 3.04%
7-Year 3.000% 3.04%

[Free bird]

I'm always learning a new term in the financial industry. I've never heard the term Real money to describe non IRA deposits. When I was talking to the rep from penfed we got confused over penalties to withdraw money early from a CD. I was talking about a penalty to withdraw money from a non IRA CD & she was talking about the IRS penalty to withdraw from an IRA CD. Talking over the phone about this stuff can be stressful.

[REWahoo]

Quote:

Originally Posted by Free bird I'm always learning a new term in the financial industry. I've never heard the term Real money to describe non IRA deposits.

New one to me as well. I couldn't find it defined as non-IRA money anywhere, so this might be an individual interpretation.

[Ready]

I filled out an application to open an IRA with PenFed today. This morning I emailed them the IRA transfer authorization to transfer funds from my Vanguard IRA, along with the PenFed IRA Application. I received an email acknowledging receipt of my email, but otherwise have not been able to confirm where it is in the process. A call later on in the day got me an agent who just said it takes longer than that for them to do anything with forms emailed in. She said no news is good news, but that doesn't leave me all that comfortable.

I'm going to be selling my shares of VG Total Bond Market, moving the funds into the money market, and then transferring the funds from money market to PenFed. Does anyone have experience doing this who can tell me how long it took from when you first sent in the application to when the funds were requested. I'd rather not sell shares in TBM and then have them just sit around for weeks in the money market. They have actually been going up a few cents lately, so maybe I'm make back some of the money I lost in 2013 if I wait a bit longer. Who knows.

The rep did confirm that the rates of 3% are guaranteed through 1/31. I asked what happens if by the time the check gets mailed from Vanguard it doesn't end up at PenFed until after 1/31. She was pretty quick to say don't worry, we will backdate the receipt if necessary. I was a little surprised she could commit to doing that actually.

[pb4uski]

You obviously missed post #181 of this thread Note that I used snailmail, not email.

Quote:

Originally Posted by pb4uski I mailed my forms in about Nov 26. They pulled funds from Vanguard on Dec 12 and issued my CDs on Dec 16 (backdated to Dec 12). I suspect timing may be a bit slower than normal due to volume.

[Ready]

Thanks pb4uski! I tried to scan through the thread but it got so long I gave up!

So now I have to figure out when to sell my TBM fund. Sounds like I have at least a week or two before I have to worry about it.

[pb4uski]

I did it right away because I didn't want to chance PenFed forwarding on a request and the money not being available. At today's minuscule interest rates it wasn't worth the risk.

Too late now, but you could have had the funds taken right out of Total Bond rather than MM.

[Ready]

I initially requested they do that, and then I was told by both PenFed and Vanguard that the money had to be in a money market before they could transfer it. I suspect there's more than one way to accomplish this, but I guess I'll have to just see how it plays out.

[pb4uski]

Interesting. I would have thought if the account number you give them has the first 4 digits the fund code for Total Stock and the next 11 digits as bring your IRA account number that vanguard would have just sold how ever many shares as was needed to fulfill the $ amount of the request.

That said, I see that I did the request from a MM and then sold some bond funds to cover it - I just don't remember why I did that. It might be that is what PenFed told me to do.

[34rlsa]

I have been following this thread off and on for a while... excuse me if this has been asked before.

How is it that PenFed can offer such better rates than other institutions?

Searching CD rates on line the best I'm finding is around 2% on 5 year CDs.

Is PenFed traditionally the leader in offering better rates as the market evolves?

[jazz4cash]

Quote:

Originally Posted by 34rlsa I have been following this thread off and on for a while... excuse me if this has been asked before. How is it that PenFed can offer such better rates than other institutions? Searching CD rates on line the best I'm finding is around 2% on 5 year CDs. Is PenFed traditionally the leader in offering better rates as the market evolves?

There has been some discussion along the lines of "how can they do this", but I don't think there have been any solid answers. Several posters mentioned that Penfed occaisionally has "specials" around January. I am aware of three occaisions (all documented on this board if you check the search tool) where Penfed offered rates significantly higher than almost anyone else, so I would say yes they are a leader in offering better rates........but they may not be the best at any given point in time.

[John Galt III]

For those using ACH for the deposit, did anyone transferring money from a credit union or bank get charged a fee for the ACH transfer?

Thanks

[jetpack]

I was trying to withdraw money from my PenFed account today. It said the max daily ACH withdraw is $50? Is that all the time, or just for new customers? It seems very low!

[ShokWaveRider]

Quote:

Originally Posted by John Galt III For those using ACH for the deposit, did anyone transferring money from a credit union or bank get charged a fee for the ACH transfer? Thanks

Nope, I did not. And I got my first "paycheck" from Penfed this week too. (3% CD Interest) Funny how I always get my distribution on the 18th of the month.

[audreyh1]

Quote:

Originally Posted by John Galt III For those using ACH for the deposit, did anyone transferring money from a credit union or bank get charged a fee for the ACH transfer? Thanks

This really depends on each bank.

With my bank, ACH transfers have no fee if initiated by the other party. For some reason I never initiate ACH transfers from my bank account.

[sheehs1]

Quote:

Originally Posted by John Galt III For those using ACH for the deposit, did anyone transferring money from a credit union or bank get charged a fee for the ACH transfer? Thanks

I did not for this transfer from this bank but I did an ACH transfer from another bank several years ago and they did charge me. I think it was $15.00.

[Hermit]

I gave up on this. I've mentioned it in a couple other threads, but here is the whole story:

I opened an account at PenFed without a problem thinking I should be able to get this done in a week. My 401k required an account number that they would put on a check and then send the check to me. I would then need to forward the check to PenFed. I requested that PenFed open an IRA account so I could provide an account number. Over a week later I asked at PenFed what happened and it seemed that they don't normally open the account until they get the check. The representative voluntarily spoke to his supervisor and I got an account opened.

I then spoke to my 401k representative and found out that a form I sent in that has to be signed and original in the last 90 days was there but not activated. They found that it did not have a required box checked and decided to send it back to me after I called. I think I am now out of time to make this transfer work by the end of the month which is time frame the PenFed representative told me.

I also found that there is a few thousand dollars in after tax money in the 401k and that it would be drawn first. That money cannot go into a traditional IRA, but can go into a Roth IRA. I would first need to open a Roth IRA and transfer that money. I also found out that the earnings on the after tax money goes into the tax deferred bucket. I have lost the opportunity for tax-free earnings on this money since retirement by not moving it to a Roth. I'm glad I discussed this with them. They would have just written two checks, one directly to me for the tax-free amount and one to the PenFed IRA account for the remainder of the requested amount. The one to me would have just been a tax-free distribution to me.

Numbers aren't nearly as hard as government and business rules and regulations!

[Chuckanut]

Quote:

Originally Posted by jetpack I was trying to withdraw money from my PenFed account today. It said the max daily ACH withdraw is $50? Is that all the time, or just for new customers? It seems very low!

I have the same restriction, apparently because I am a new member and require more security precautions. They say it will last about 6 months. You can withdraw more but you have to call and talk to somebody, IIRC.

[dvalley]

Stupid question but can anyone open a PenFed account or do you have to be in active/retired service?

I only see these options to select:

I am in the United States Military & Uniformed Services
I am an employee of a qualifying organization
I belong to the following association or organization
I am an employee of the United States government
I am a relative or housemate of someone who is eligible
I live or work at an eligible location
Help me join another way

[REWahoo]

Select that last option and you'll find anyone can join.