CD discussion thread

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secondopinion
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Re: CD discussion thread

Post by secondopinion »

indexfundfan wrote: Sat Feb 04, 2023 8:24 am
Elmo wrote: Sat Feb 04, 2023 7:41 am
secondopinion wrote: Tue Jan 31, 2023 9:16 pm I focus on a 5-year add-on CD yielding 4.17% rate (not APY). It has little money in it; but if yields drop sharply, I will be glad for the hedge for any added money.
I'm interested in a 5 year add-on CD as well. Did I miss your post of a viable option?
Thanks secondopinion
That one is from Mountain America CU.

https://www.macu.com/accounts/savings/c ... e-accounts

They call it a Growth CD and is limited to $100k per person (not per CD).
I think there are similar offerings at America First Credit Union as well. Same maximum as well, along with a $10,000 maximum of additional money per a given month.

https://www.americafirst.com/accounts/c ... vings.html

In theory, one can buy these CDs in advance and not fund these besides the minimums ($5 start, $10 per month) unless the rates drop significantly. That is what my thought is.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
Jb526
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Re: CD discussion thread

Post by Jb526 »

Seeking feedback: Is it common for someone to join a local community organization for a small $15 fee (and having zero intention of ever actively participating in it) as a way to qualify for membership in a tiny credit union located all the way across the country for the sole purpose of getting a top rate on a CD? And should a customer feel completely comfortable opening and holding a long-term CD in this way?
Coopsdaddy
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Re: CD discussion thread

Post by Coopsdaddy »

Not sure but im all ready fed up with nasa cu,i have been waiting sense the 1st for my application to get approved,im about to move on.
feh
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Re: CD discussion thread

Post by feh »

Jb526 wrote: Wed Feb 08, 2023 10:54 pm Seeking feedback: Is it common for someone to join a local community organization for a small $15 fee (and having zero intention of ever actively participating in it) as a way to qualify for membership in a tiny credit union located all the way across the country for the sole purpose of getting a top rate on a CD? And should a customer feel completely comfortable opening and holding a long-term CD in this way?
I don't know if it's common or not, but I've done it. I think many others also did back in 2019 at psecu.com
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jeffyscott
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Re: CD discussion thread

Post by jeffyscott »

feh wrote: Thu Feb 09, 2023 5:09 am
Jb526 wrote: Wed Feb 08, 2023 10:54 pm Seeking feedback: Is it common for someone to join a local community organization for a small $15 fee (and having zero intention of ever actively participating in it) as a way to qualify for membership in a tiny credit union located all the way across the country for the sole purpose of getting a top rate on a CD? And should a customer feel completely comfortable opening and holding a long-term CD in this way?
I don't know if it's common or not, but I've done it. I think many others also did back in 2019 at psecu.com
I've considered it, but not done it. I don't like that this is allowed, but that's a criticism of the credit unions that do it and the regulatory system that allows it, not at all a criticism of those who use it as a way to join and get good CD rates. To me, if they want to be a national bank, they should become a bank. Or if they want to take advantage of loose rules around credit unions, they should expand the membership, without requiring me to give money to some third party (but I wouldn't let $5 or so keep me from taking a good CD deal, if I were willing to search them out and ship money around, which I no longer am).

IIRC, I did notice one who did it the right way from my perspective, I think it was the NASA credit union, where you joined some space related organization but the credit union paid the membership fee.

When I was searching for good CDs, during the time when brokered CDs and treasuries were near 0, I happened to find one that I qualified for "legitimately" and another that was a fairly nearby community bank (required me to appear in person at least one time). I found it interesting that the community bank was more restrictive on who could be a customer than a lot of the "fake" credit unions.
hudson
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Re: CD discussion thread

Post by hudson »

Jb526 wrote: Wed Feb 08, 2023 10:54 pm Seeking feedback: Is it common for someone to join a local community organization for a small $15 fee (and having zero intention of ever actively participating in it) as a way to qualify for membership in a tiny credit union located all the way across the country for the sole purpose of getting a top rate on a CD? And should a customer feel completely comfortable opening and holding a long-term CD in this way?
Is it common? yes
Feel comfortable? yes, I do
I don't see an issue.
Jb526
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Re: CD discussion thread

Post by Jb526 »

Jb526 wrote: Wed Feb 08, 2023 10:54 pm Seeking feedback: Is it common for someone to join a local community organization for a small $15 fee (and having zero intention of ever actively participating in it) as a way to qualify for membership in a tiny credit union located all the way across the country for the sole purpose of getting a top rate on a CD? And should a customer feel completely comfortable opening and holding a long-term CD in this way?
And by "local community organization," I did mean an organization local to the credit union but thousands of miles away from the customer. :happy
safari
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Re: CD discussion thread

Post by safari »

Heads up. Ally's 18-month CD is now 5% APY.
https://www.ally.com/bank/high-yield-cd/
MikeG62
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Re: CD discussion thread

Post by MikeG62 »

safari wrote: Sun Feb 19, 2023 9:29 am Heads up. Ally's 18-month CD is now 5% APY.
https://www.ally.com/bank/high-yield-cd/
That is intriguing - good to see some rates with a "5" handle.

Still, comparable term Treasuries continue to yield more after accounting for the state tax benefit (for those of us who live in a state with an income-based tax).
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Bfwolf
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Re: CD discussion thread

Post by Bfwolf »

I have a large IRA CD maturing in less than a month. Can anyone advise what's the best option for a 30+ month IRA-eligible CD going forward? If there's nothing good, I guess I'll just roll it into my Vanguard account and buy a bond mutual fund.
MikeG62
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Re: CD discussion thread

Post by MikeG62 »

Bfwolf wrote: Thu May 04, 2023 4:52 pm I have a large IRA CD maturing in less than a month. Can anyone advise what's the best option for a 30+ month IRA-eligible CD going forward? If there's nothing good, I guess I'll just roll it into my Vanguard account and buy a bond mutual fund.
I just opened an IRA CD at Langley - think it’s 22-month at 5.35%.

Whether that will be around in 30 days I can’t say. Keep an eye on it though.

May seem some interesting CD’s in the coming days or week(s) now that the Fed went up another 25bps. Keep an eye on deposit accounts.
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Bfwolf
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Re: CD discussion thread

Post by Bfwolf »

MikeG62 wrote: Thu May 04, 2023 5:04 pm I just opened an IRA CD at Langley - think it’s 22-month at 5.35%.

Whether that will be around in 30 days I can’t say. Keep an eye on it though.
It looks like this is expired.

https://www.depositaccounts.com/banks/l ... ance%20cap.
lazyday
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Re: CD discussion thread

Post by lazyday »

Advancial FCU has had a 5 year jumbo at 5.4 APY for some months now. Impressive compared to the 5 year Treasury at 3.8 yesterday.

$50,000 minimum. Join a dog agility association for eligibility.

Credit unions can be a pain to deal with, especially if opening an IRA certificate.

Discussion https://www.depositaccounts.com/banks/a ... promo55239

https://www.advancial.org/rates
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Kevin M
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Re: CD discussion thread

Post by Kevin M »

lazyday wrote: Fri Feb 02, 2024 7:07 am Advancial FCU has had a 5 year jumbo at 5.4 APY for some months now. Impressive compared to the 5 year Treasury at 3.8 yesterday.

$50,000 minimum. Join a dog agility association for eligibility.

Credit unions can be a pain to deal with, especially if opening an IRA certificate.

Discussion https://www.depositaccounts.com/banks/a ... promo55239

https://www.advancial.org/rates
This is indeed a great CD deal--if you're interested in jumping through the hoops. Yield on 5y Ts today is about 3.9%, so 5.4% is a yield premium of 150 basis points. My average yield premium from about late 2010 to 2020 was about 115 bps, so 150 is outstanding. I no longer have the motivation to chase direct CD deals, but the risk/return on this one is outstanding for those who do.

My last direct CD matured yesterday, and I transferred the proceeds to Schwab, and put half in a T at the highest yield I could get, which was 5.4% for a 3/14/2023 maturity, and the other half in the longest maturity Tbill for which I could get 5%, which was 8/1/2024. I feel like I'm surfing the yield curve. :wink:

After the inflation scare we had, anything with a maturity of more than two years now is in TIPS.
If I make a calculation error, #Cruncher probably will let me know.
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indexfundfan
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Re: CD discussion thread

Post by indexfundfan »

lazyday wrote: Fri Feb 02, 2024 7:07 am Advancial FCU has had a 5 year jumbo at 5.4 APY for some months now. Impressive compared to the 5 year Treasury at 3.8 yesterday.

$50,000 minimum. Join a dog agility association for eligibility.

Credit unions can be a pain to deal with, especially if opening an IRA certificate.

Discussion https://www.depositaccounts.com/banks/a ... promo55239

https://www.advancial.org/rates
I can confirm that you can join this credit union through the dog agility association (free). The 5yr 5.4% and 4yr 5.2% jumbo CDs ($50k) are still available.

The eligibility requirement of this credit union has varied over the past years. It is easy to qualify at this current moment.
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