PFCU Update 04/01/05

[MJ]

Until April 27, PFCU is now offering 5% APY on
their 3, 4, and 5 year CDs.

https://www.penfed.org/rates/certrates.asp?app=CDA

MJ

[cute fuzzy bunny]

The same rate on 3-5 years...odd...

[MJ]

Quote:

The same rate on 3-5 years...odd...

Yeh. The banks seem to want to attract short to mid term dollars like corus and now PFCU.

While I am still learning more about investing "wisely" something I have failed miserably in except with my 2 fam house (dum luck). I still have a lot of cash seating in 3.25% MM, is it preferable to put "I do not know what to do with" money in CDs, 1yr @ 4% versus 3yr @ 5%.

MJ

[Spanky]

one year @4 % is a better deal than 5 yr @5% since this is only 25% better but 5 times longer.

[charlie]

I believe it was MJ on another thread who pointed
out that IRA accounts for persons 59.5 years
old or older you have the privilege of canceling
a CD and shifting the money to a higher rate CD
at any time with no penalty.

It just dawned on me (duh) that this is maybe a better
way to index your FI allocation to inflation than
buying corporate floaters that are indexed to the
CPI.

Just think of it ..... put your money in a 7 year CD at
5.15% and not worry about interest rates going
up.

It seems like a no-brainer to me now that the light
has lit.

What do you think? (and thanks MJ)

Charlie

[MJ]

Quote:

one year @4 % is a better deal than 5 yr @5% since this is only 25% better but 5 times longer.

Hi Spanky,

I agree that 1 yr versus 5 yr is a no brainer but
I was trying to get an opinion comparing 1 yr 4% to 3 yr 5%.

Quote:

I believe it was MJ on another thread who pointed out that IRA accounts for persons 59.5 years old or older you have the privilege of canceling a CD and shifting the money to a higher rate CD at any time with no penalty. It just dawned on me (duh) that this is maybe a better way to index your FI allocation to inflation than buying corporate floaters that are indexed to the CPI. Just think of it ..... put your money in a 7 year CD at 5.15% and not worry about interest rates going up. It seems like a no-brainer to me now that the light has lit.

Charlie,
As always my pleasure. It's the little I can do as I get a lot more out of this forum than I am able to contribute due to my lack of investment experience.

Regarding 7 year IRA CD, that is what I did when it was 5.5%. I was hoping that PFCU would have returned to the 5.25% and 5.5% CDs this month.

MJ

[charlie]

GD-ER, sometimes it takes a 2x4 up side the head
to get my attention .... I probably missed that post.

Charlie

[Spanky]

MJ,

The 3 yr CD rate (5%) is pretty good.

Spanky.

[Jarhead*]

Quote:

I believe I mentioned I did this for my mother (~80) at the beginning of the year. She was able to trade up from ~5% to ~5.5% on her 7 yr IRA CD. This extended her maturity and locked in the new rate for a full 7yrs. In addition, she can make withdrawals at any time w/o penalty and maintain the residual at the CD rate. Unbelievable terms -- hope they don't change them in the future. Almost makes one wish they were 60... almost! (Like those 55 and up cruise deals for seniors...)

GDER: Like Charly, I sure missed that one.
I will have to start taking withdrawels in a little over 3 years.
I have quite a chunk in short-term corporates. (Bonds scare hell out of me, but am planning on taking those out first.
However, short-term corporates total return in 04 was 2%. So far this year they are down about .35.
If I understand you right, you can lock in 7 years, and withdraw any amount with no penalty.
If that is so, that's a pretty good case made for replacing short-term corporates with IRA CD"s.
Damn, I must have been busy "chewing out" a young poster for an attitude problem.
Jarhead

[charlie]

Jarhead, *I talked to Penfed (very nice phone ladies
BTW) about withdrawals from a IRA CD after age
59.5. *The way it works is that you cancel the old
CD and then open a new one .... keep what you
want from the one you cashed in.

Most of my IRA FI is in corporate floaters paying
2% + CPI .... about 5% right now..... so I am in no
hurry to change to Penfed. *I will be watching
their 7 year CD like a hawk and switch if the
floaters don't measure up.

Cheers,

Charlie

[Jarhead*]

Quote:

Jarhead, *I talked to Penfed (very nice phone ladies BTW) about withdrawals from a IRA CD after age 59.5. *The way it works is that you cancel the old CD and then open a new one .... keep what you want from the one you cashed in. Most of my IRA FI is in corporate floaters paying 2% + CPI .... about 5% right now..... so I am in no hurry to change to Penfed. *I will be watching their 7 year CD like a hawk and switch if the floaters don't measure up. Cheers, Charlie

Charlie: I assume that Pen-Fed is not the only inst. that offers this . Am I correct?
Would be interested, if you have the time to hear about the floaters you are referring to.
Don't feel real comfortable (from a return prospective) with the short term corporates. I have a pretty big chunk in there, and time"s awastin.
Thanks, Jarhead

[charlie]

GD-ER, thanks! I was hoping this was the case.
The nice lady at Penfed had to go ask her supervisor
when I asked about partial withdrawals and came
back with the wrong answer apparently.

This is much better.

Charlie

[charlie]

Jarhead, *I bought my "floaters" through the bond
desk at Vanguard on the secondary market.

One is a CD maturing in 2014 that pays 2.0% + year-over-year CPI-U issued by Standard Federal Bank, CUSIP 85339RFC2.

The other is a corporate bond issued by Household
Finance Corp that pays 2.38% + CPI-U, CUSIP
44181EZN1 maturing in 2013.

Both reset monthly and pay monthly. *

You can buy new issues via Vanguard or the following
links:

www.fisn.com

www.directnotes.com/all-rates.asp

www.internotes.com

Cheers,

Charlie

[Jarhead*]

Quote:

Jarhead, *I bought my "floaters" through the bond desk at Vanguard on the secondary market. One is a CD maturing in 2014 that pays 2.0% + year-over-year CPI-U issued by Standard Federal Bank, CUSIP 85339RFC2. The other is a corporate bond issued by Household Finance Corp that pays 2.38% + CPI-U, CUSIP 44181EZN1 maturing in 2013. Both reset monthly and pay monthly. * You can buy new issues via Vanguard or the following links: www.fisn.com www.directnotes.com/all-rates.asp www.internotes.com Cheers, Charlie

Charlie: Really appreciate your help. I have about 3/4 of my stuff with Vanguard. I'll give them a call Mon. and get an idea of what they have to offer. Sounds like a good put it in and forget about type investment that I am looking for, to replace part of my short-term corporates.
We all like to "fuss" with each other from time to time, but it's information like this that makes keeping an eyeball on this board worthwhile. (I doubt if you'd get this info. from a broker/salesman)
Again, thanks a lot, and I'll let you know how I make out.
Regards, Jarhead

[charlie]

De nada, mi amigo.

Charlie