Just Bought a 5 Year CD for 5.75 APY

[ShokWaveRider]

I just broke down and took the plunge and bought a $200k CD at PenFed for 5.75% APY for 5 Years. It is one of my IRAs so I do not need the cash for 8 years or so.

Call me concervative if you like. But I think it is as good if not better than bonds right now. Also it is all insured because of the NCUA covers the Beneficiaries as well under the insurance.

SWR

 

[Cut-Throat]

Re: Just Bought a CD for 5.75 APY

What is the duration of the CD? and what is the penalty for cashing in early?

 

[brewer12345]

Re: Just Bought a CD for 5.75 APY

Pen Fed at that rate is 5 year CD and a 6 months of interest penalty for early withdrawal. I think its a pretty shap deal, personally, and a lot more attractive than high grade bonds, etc.

 

[MJ]

I am going to move a nice portion of IRA money to the 7 year 6% APY CD. As I have mentioned in another thread, if I choose, I will be able to withdraw the money without penalty in 18 months when I turn 59 1/2. Not bad for a short term CD.

MJ

 

[ShokWaveRider]

I am going to move a nice portion of IRA money to the 7 year 6% APY CD. As I have mentioned in another thread, if I choose, I will be able to withdraw the money without penalty in 18 months when I turn 59 1/2. Not bad for a short term CD.

MJ

I decided on 5 Years because 7 is just too long and the additional 2 years IMHO were not worth the extra .25% if it was 7% I would have done it.

SWR

 

[vmaxie]

I believe thats a good choice. I have a technical question for you. I just sent in 30K to PenFed to purchase a 3 yr CD. They placed the money in my regular share account. When I called them and asked why it wasn't put into the CD they advised the funds go into the regualr share account until the funds clear. Then they put it into the CD with an as of date of the deposit. Seems rather odd to me that they handle it this way. Was your purchase handled the same way? Thxs

 

[MJ]

I decided on 5 Years because 7 is just too long and the additional 2 years IMHO were not worth the extra .25% if it was 7% I would have done it.

SWR

I agree with you. The extra 2 years and the EWP of 12 months for .25% isn't worth it but for my IRA CD, the minimum of 18 months at 6% is nice. I also got a few 5 year CDs at PFCU almost 2 years ago for my taxable money instead of the 7 years.

 

[wstu32]

on the CD, do you get the money periodically or is it given to you at the end, or do you buy it at a discount?

 

[wstu32]

also, is it insured for the full amount and to what amount...
say you put in $500k, would that be insured?

thanks in advance.

 

[MJ]

on the CD, do you get the money periodically or is it given to you at the end, or do you buy it at a discount?

your choice, you can request the interest to be distributed monthly at any point in time or let it remain to earn additional interest. PFCU doesn't allow you to withdraw past interest without a EWP.

 

[MJ]

also, is it insured for the full amount and to what amount...
say you put in $500k, would that be insured?

thanks in advance.

CU's follow similar rules as FDIC except the insurance is guaranteed by NCUA.

 

[kramer]

If I had access to those kind of rates, I would back up the truck, too.

Sounds like a great move to me.

I am not sure exactly how the Pentagon credit union provides those kinds of rates, unless it is with subsidies.

Kramer

 

[wstu32]

so, correct me if i am wrong...
i deposit $1 million at 6% and i can get paid 60k per year... paid, say monthly...insured?.... that sounds pretty good...

anything that is catchy?

 

[brewer12345]

I believe thats a good choice.  I have a technical question for you.  I just sent in 30K to PenFed to purchase a 3 yr CD. They placed the money in my regular share account.  When I called them and asked why it wasn't put into the CD they advised the funds go into the regualr share account until the funds clear.  Then they put it into the CD with an as of date of the deposit.  Seems rather odd to me that they handle it this way.  Was your purchase handled the same way? Thxs

I can't remember what they did when I bought a CD there last year, but my experience is that Prn Fed will treat you more than fairly. I took out a car loan last year and the rate moved up between when I applied and when I actually bought the car. They gave me the lower rate.

 

[ShokWaveRider]

also, is it insured for the full amount and to what amount...
say you put in $500k, would that be insured?

thanks in advance.

If you have 4 Beneficiaries. That are direct relatives.

SWR

 

[ShokWaveRider]

I also have a couple of bucks maturing on the 17th of January, after tax funds and I am condsidering putting them in PenFed's 3 year option at 5.50 apy.

SWR

 

[REWahoo]

I believe thats a good choice. I have a technical question for you. I just sent in 30K to PenFed to purchase a 3 yr CD. They placed the money in my regular share account. When I called them and asked why it wasn't put into the CD they advised the funds go into the regualr share account until the funds clear. Then they put it into the CD with an as of date of the deposit. Seems rather odd to me that they handle it this way. Was your purchase handled the same way? Thxs

Depositors Beware: I've had a couple of "unpleasant" experiences with PenFed.

A while back they offered a nice rate on a 3 year CD, but imposed a minimum of $10,000 to get the rate. I was a member, DW wasn't, but she wanted to put 10K of her IRA money into a CD. We downloaded the CD form, completed it and she mailed it along with a $10K check to PenFed. After a couple of weeks, she called them to confirm it had been received. They said yes, and the money was in a regular share account. Seems in order to get a CD, you must also have a regular share account with a minimum balance of $5. Since she sent a check for $10k, once they subtracted $5 to deposit in her regular account, she no longer met the minimum for the CD so they deposited all the funds into the regular account. When she asked why they didn't tell her about all this, they replied, "You would be aware of it once you got your first statement".

On another occasion, I gave PenFed written instructions to send me a check for the full amount of a CD once it matured. I also called them two days prior to the maturity date to confirm they had received my letter and would mail the check to me. When no check had arrived a week after the CD matured, I called to follow up. Seems the money had not been sent, rather it had been deposited into my regular savings account at PenFed.

Moral to my stories: Be very cautious on all your dealings with PenFed and follow up repeatedly to be sure you know what they are doing with your money.

 

[cute fuzzy bunny]

When she asked why they didn't tell her about all this, they replied, "You would be aware of it once you got your first statement".

This appears to be a standardized trend with regards to dealing with customers. "We wont make a 30 second phone call to resolve a problem in a reasonable manner - it saves us the 30 seconds if you have to figure it out yourself, even if a reasonable person will be very angry when they figure it out."

Two good examples: I bought a new fridge from home depot last year. On the delivery day, nobody showed up. I called and they said the truck delivering the refrigerators to the delivery company broke down, so they didnt have it to deliver. Its not their policy to call and tell you this. When they dont show up, you call and reschedule. I was standing in line at a pharmacy and the woman in front of me asked for her refill and was told that the doctor wouldnt fill it. She asked why nobody called to tell her that. "Oh, we dont call anymore, we just tell you when you get here".

Do businesses really expect to retain customers with this sort of 'cost savings'?

 

[brewer12345]

Depositors Beware: I've had a couple of "unpleasant" experiences with PenFed.

A while back they offered a nice rate on a 3 year CD, but imposed a minimum of $10,000 to get the rate.   I was a member, DW wasn't, but she wanted to put 10K of her IRA money into a CD.  We downloaded the CD form, completed it and she mailed it along with a $10K check to PenFed.  After a couple of weeks, she called them to confirm it had been received.  They said yes, and the money was in a regular share account.  Seems in order to get a CD, you must also have a regular share account with a minimum balance of $5.  Since she sent a check for $10k, once they subtracted $5 to deposit in her regular account, she no longer met the minimum for the CD so they deposited all the funds into the regular account.  When she asked why they didn't tell her about all this, they replied, "You would be aware of it once you got your first statement".

On another occasion, I gave PenFed written instructions to send me a check for the full amount of a CD once it matured.  I also called them two days prior to the maturity date to confirm they had received my letter and would mail the check to me.  When no check had arrived a week after the CD matured, I called to follow up.  Seems the money had not been sent, rather it had been deposited into my regular savings account at PenFed.

Moral to my stories:  Be very cautious on all your dealings with PenFed and follow up repeatedly to be sure you know what they are doing with your money.

Interesting, and almost the exact opposite of my experiene with them. I wonder why? Maybe we just dealt with different customer service reps?

 

[ShokWaveRider]

Well, I only opened the account last week. They got and responded to all my Faxes and letters. In fact they have been great and are backdating the IRA to 1-10 even though they have to do all the roll over work and will not get the funds for a couple of weeks. But hey, we are giving them a chunk of dosh after all.

SWR

 

[REWahoo]

Interesting, and almost the exact opposite of my experiene with them. I wonder why? Maybe we just dealt with different customer service reps?

No doubt that played a part in my negative dealings. But by my count, three or more PenFed employees had to screw up and/or the CU's member contact policies had to be "flawed" for my situations to occur. Maybe it was all coincidental, but you can understand why I don't hold them in particularly high regard.

I'm not saying not to do business with PenFed, just do the Ronald Regan thing and "trust but verify"...and then re-verify.

 

[MJ]

If you have 4 Beneficiaries. That are direct relatives.
SWR

Beneficiaries include wife, children, your parents and siblings.
For the other OP, you could easily be insured for $1000k.

 

[wstu32]

good info thanks

 

[ShokWaveRider]

good info thanks

You can't beat the NCUA. Why anyone would use a bank nowadays beats me. Hi fees, crapola service, Only interested in PROFIT PROFIT PROFIT. I am a member of 3 Credit Unions to date and have never had any trouble with any of them (Touching Wood NOW). PLUS, My funds are completely insured.

SWR

 

[brewer12345]

You can't beat the NCUA. Why anyone would use a bank nowadays beats me. Hi fees, crapola service, Only interested in PROFIT PROFIT PROFIT. I am a member of 3 Credit Unions to date and have never had any trouble with any of them (Touching Wood NOW). PLUS, My funds are completely insured.

SWR

I do business with a few banks, and I have to disagree. However, I usually have the best experience with smaller local banks, not the behemoths.