New at PenFed - 3% 5yr certificates

[pb4uski]

My understanding is yes (up to 250k, just like FDIC) and no (no way to increase).

It looked to me to be a mirror image of the FDIC coverage, just a different government program.

[REWahoo]

Quote:

Originally Posted by pb4uski It looked to me to be a mirror image of the FDIC coverage, just a different government program.

+1

[kaneohe]

I must have psychic powers! Apparently forseeing REW's problems, I only sent in one application/certifcate (non-IRA). However I sent in 3 applications and 1 check covering the 3 certificates, each for a different term. The application was sent for joint ownership w/ an added reqest to retitle in name of jt. living trust which would have been a bonus if they actually did it.

Such a drama I created .......never realized there were so many variables. The only thing that was right was that 3 certificates were produced and extra credit should be given because the amount of each was correct. All the terms were the same, however, which was not as requested. Also (and I must admit I'm still confused about all the details), the titling was not as requested. At least one and perhaps more were single owner w/ POD. Corrections were done but still were not correct.........reps got confused following the tangled web of corrections on corrections. I implored them to just compare the original applications w/ the final result instead of trying to follow the tangled web to little avail.

Finally last night, I got hold of a supervisor who did the final transition to trust titling. I was ecstatic.

Today in the mail arrived the first of the confirming statements. Unfortunately it was for single owner w/ POD so it must have sent at an interim step when they thought they were correct. In principle, we're supposed confirm/correct whatever was received but I'm not sure what to do since supposedly it is fixed now. A supervisor said to just ignore what came today.

I sense a long running drama ahead where I end up with either twice as many certificates or none at all .........anyone else having the same fun?

[Free bird]

Talked to another penfed rep & she told me I was covered to $500k on the ncua insurance due to my wife being a beneficiary on the IRA. The insurance estimator on the ncua site doesn't seem to let you include anyone other than yourself when estimating coverage. I'd like to plow more than 250k into the penfed IRA but not without the entire balance being covered. Hmmm

[pb4uski]

Quote:

Originally Posted by Free bird Talked to another penfed rep & she told me I was covered to $500k on the ncua insurance due to my wife being a beneficiary on the IRA. ....

That is NOT the way I interpreted it - but I admit I looked at it a couple weeks ago. So if you have two beneficiaries you can go up to $750k? or $1m wiht 3 beneficiaries? I suspect the rep was confusing it with joint account coverage.

[Free bird]

So joint coverage is only possible on a non IRA account? The beneficiary added to an IRA account doesn't increase the insurance from 250k to 500k?

[braumeister]

I'm sure the NCUA has the same policy as the FDIC for commercial banks.

This is from the FDIC website:

Quote:

While some self-directed retirement accounts, like IRAs, permit the owner to name one or more beneficiaries, the existence of beneficiaries does not increase the available insurance coverage.

[brewer12345]

Quote:

Originally Posted by braumeister I'm sure the NCUA has the same policy as the FDIC for commercial banks. This is from the FDIC website:

I hate to say it, but this time of year your avatar gives me subliminal Mr. Hanky Christmas Special vibes, at least until I take the time to actually look closely.

[Free bird]

I called & talked to 3 different penfed reps. Two told me a beneficiary on an IRA raised the ncua insurance from 250k to 500k & one told me 250k is the maximum. The ncua site has an insurance estimator that seems to indicate 250k is the maximum per IRA in one Credit union. The reps must be confusing regular accounts with IRA accounts. Seems like the reps should have that information before they're allowed to field members calls.

[Chuckanut]

I among others have received an offer from MegaBank. Deposit $15,000 in a savings account (currently paying 0.01%), leave it there for 90 days and get a $200 bonus deposited into the account. Sounds good as that is the same as an annual interest rate above 5%. But....

Reading the fine print I find that I must leave the money in for 6 months or they take the $200 bonus money back. Given the the current interest rate is almost zero, that lowers the APR to about 2.6%. Again, not bad for a 6 month rate. But, there is also the hassle factor, drive to bank, open account, drive back to bank, close account.

And what do I do with the money at the end of the 6 months? Will there be a 3% CD available in July? And do I want to do business with MegaBank where I have to read through all the fine print to find the 6 month catch? I think not.

[Katsmeow]

Quote:

Originally Posted by REWahoo So... I decided to transfer some IRA funds from Vanguard to a PenFed 5yr CD. Following the PenFed instructions online... ...I printed out and completed three copies of the IRA Transfer Authorization form, asking that $X amount be transferred from my Vanguard Money Market IRA account to an IRA CD at PenFed. I was surprised this morning when I saw that Vanguard had transferred the funds to PenFed - twice. It seems PenFed thought the three copies (specified in their instructions) were three separate requests for transfer, and submitted all three to Vanguard. Vanguard only honored two of the requests because there were insufficient funds in my Money Market account to cover the third request. Sheesh... Lesson learned: When all else fails, sometimes following instructions doesn't improve your chances of success.

You know, I was just looking at this last night. I was thinking about doing the same thing, but was queasy about 3 copies thing. I was worried they would try to process - or Vanguard would try to process - 3 separate transactions.

I guess if you are sending them an original signature you are supposed to just send one?

I am thinking of trying to do this (hoping the rate doesn't go away).

Is the process to:

1. Join PenFed.

2. Fill out pages 12-13 of the IRA info at PenFed.

https://www.penfed.org/Opening-an-IRA-Account/

3. Mail that to PenFed so they have the original signature (mail one original - not 3) to send to Vanguard.

4. In the meantime sell my Total Bond that I want to send to PenFed and put it in the money market fund to fund the CD.

5. Hope it all gets done before the rates go down.

Is that the process? Does anything else need to be filled out? We would call PenFed, of course, to confirm all this.

[aja8888]

I mailed the three copies of the transfer request and the new IRA application since I want to transfer IRA funds to a new IRA at Penfed.

I also included a cover letter explaining that the PenFed rep required 3 signed copies in case Schwab would not take a fax. In the letter I made it clear that Schwab would take a fax and that I was only including the three signed copied per PenFed's requirements.

This was two weeks ago. I called this morning and my application was tracked down to someone's desk (just sitting there). They said they would "get on it right away"...

Are these folks at PenFed government employees?

[Katsmeow]

Quote:

Originally Posted by aja8888 I mailed the three copies of the transfer request and the new IRA application since I want to transfer IRA funds to a new IRA at Penfed.

Which IRA application form are you talking about? Is it something other than what is on p.12-13 of the link I posted?

On a thread on Bogleheads it said that you don't have to do the copies of the transfer request if you are sending a original signatures and that this is old instructions for when people used to use carbons.

I wouldn't mind sending 3 but it would be a big issue if Vanguard processed it 3 times. I guess I could guard against that by not having enough money in the money market account to process it more than once....

[aja8888]

Quote:

Originally Posted by Katsmeow Which IRA application form are you talking about? Is it something other than what is on p.12-13 of the link I posted? On a thread on Bogleheads it said that you don't have to do the copies of the transfer request if you are sending a original signatures and that this is old instructions for when people used to use carbons. I wouldn't mind sending 3 but it would be a big issue if Vanguard processed it 3 times. I guess I could guard against that by not having enough money in the money market account to process it more than once....

I sent in the pages from the pdf you linked. I had two or three conversations with the PenFed reps and did exactly as they requested.

My bitch is that the application and transfer documentation is sitting on someone's desk for at least a week and a half and not being processed. And I sent the FedEx overnight to the Omaha office as requested.

What I hope is that they tranfer the $100K in time for me to lock up some 3% CDs.

[REWahoo]

Quote:

Originally Posted by Katsmeow Is that the process?

I think so, but don't forget to also fill out the IRA Account Application on page 11.

For those of you commenting on the time it is taking Penfed to process your paperwork, I mailed my IRA forms to Penfed on 12/11 and Vanguard transferred the funds from my IRA account on 12/20. No sign yet of my new CDs in my Penfed account.

[Katsmeow]

I see from the form you have to join. It says to mail the member application plus check for regular shares account if not a member, but I would think the easy way would be to join online which it says you can do on their web page.

[aja8888]

Quote:

Originally Posted by Katsmeow I see from the form you have to join. It says to mail it if not a member but I would think the easy way would be to join online which it says you can do on their web page.

I am a Penfed member with active accounts. I had to mail in the IRA app and transfer paperwork to initiate an IRA and transfer funds into it.

[Katsmeow]

Quote:

Originally Posted by aja8888 I am a Penfed member with active accounts. I had to mail in the IRA app and transfer paperwork to initiate an IRA and transfer funds into it.

Yes. We aren't a member so have to do the membership part, but I think that can be done online. Then do the application on page 11 and the transfer authorization on page 12.

Hope they get yours processed quickly. I do know this might go away before we can get it processed, but still worth trying I think.

[Willers]

Quote:

Originally Posted by pb4uski I had originally split my PenFed IRA into a 2% 3 year CD and a 3% 5 year CD. You guys convinced me that the 5 year was the way to go because even if I break it after 3 year I end up with the same balance as I would with the 3 year CD so anything beyond that is gravy. So I called and changed what I had to five 5 year CDs so if I do want to make changes the penalty won't be on the whole balance. That said, I expect i will hold the entire 5 year term unless interest rates rise a lot.

Thanks. I was going to split between 3-year and 5-year until I saw this and realized that I was OK with only the 5-year. I purchased them over the last two days.

[rbmrtn]

Quote:

Originally Posted by Katsmeow Yes. We aren't a member so have to do the membership part, but I think that can be done online. Then do the application on page 11 and the transfer authorization on page 12. Hope they get yours processed quickly. I do know this might go away before we can get it processed, but still worth trying I think.

Yes, joining is easy done online. $5 to fund the share account and it can done with a CC.

Every IRA transfer I've seen involves printed signed forms. Probably regulations and tax liability issues.