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Tweety11
- Senior Member
rated:
posted: Aug. 25, 2004 @ 8:53a 
I have a CD 101 question.
If you buy a 3 year CD with say 4%APR with 90day penalty for early withdrawal. When does the CD accumulate the interest? monthy, yearly, quartlery or does it depend on the CD? |
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dsmking
- Senior Member - 1K
rated:
posted: Aug. 25, 2004 @ 9:05a
<< If you buy a 3 year CD with say 4%APR with 90day penalty for early withdrawal. When does the CD accumulate the interest? monthy, yearly, quartlery or does it depend on the CD?
>>
Which CD offers 4% for 3 years with 90 day interest penalty?. TIA |
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7Enigma
- Senior Member
rated:
posted: Aug. 25, 2004 @ 10:02a
Hmm, newbie to the CD investment game. I have the majority of my funds through PSECU in PA and will definately look into this 1year (with penalty) or see if 2 years would be better. And a bump for how the interest is compounded question above me.
justin |
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mrbean
- Senior Member - 2K
rated:
posted: Aug. 25, 2004 @ 10:21a
shilpa said:When does the CD accumulate the interest? monthy, yearly, quartlery or does it depend on the CD?
How the interest compounds depends on the particular CD.
The early withdrawal penalty is taken out at the time of withdrawal and is considered a separate issue, i.e., all interest earned till the day of withdrawal is calculated first (and that means you will be given the interest till that day, regardless of which method of compounding they use), then the penalty is subtracted. |
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tooshy
- Frivolous Member
rated:
posted: Aug. 25, 2004 @ 11:39a
The best 5 yr rate is 4.8% with Capital One FSB (4.85% with Capital One FSB/Costco). One could opt for a 4.33% 'no regrets' 5yr CD with one time bump, which is better?
6 month penalty = 4.8/2 = 2.4%
loss of interest = 4.8 - 4.33/yr x 5 = .47% x 5 = 2.35%
Basically, 5 yr wins only if the CD is not broken, otherwise the gain of a slightly higher interest rate compared to the one time bump product (.47/yr) is washed. The 'no regrets' product seems to be my choice. Any better bump type CD rate?
BTW, I confirm Marketwiz's reporting of MBNAs insane penalty: half of unearned remaining interest!! Outrageous!!! |
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MarketVViz
- Senior Member - 1K
rated:
posted: Aug. 25, 2004 @ 11:52a
tooshy said:The best 5 yr rate is 4.8% with Capital One FSB (4.85% with Capital One FSB/Costco). One could opt for a 4.33% 'no regrets' 5yr CD with one time bump, which is better?
6 month penalty = 4.8/2 = 2.4%
loss of interest = 4.8 - 4.33/yr x 5 = .47% x 5 = 2.35%
Basically, 5 yr wins only if the CD is not broken, otherwise the gain of a slightly higher interest rate compared to the one time bump product (.47/yr) is washed. The 'no regrets' product seems to be my choice. Any better bump type CD rate?
BTW, I confirm Marketwiz's reporting of MBNAs insane penalty: half of unearned remaining interest!! Outrageous!!!
Yes (BTW -- I have no idea why my post is rated negative?). As your own numbers show, the "Big names" (Cap One, MBNA, etc) seem to have the worst deals when you factor in penalty. I think its a BIG MISTAKE to buy a 5 year CD expecting to hold it for 5 years (due to my personal inflation expectations which I realize not everyone would agree with). If rates jump 2% over the next 2-3 years, you are going to want to break the CD and buy a better one.
By the way, some people were asking about the compounding/dividend schedule for the PSECU CDs, its monthly (first day of month I believe). And so far no one has come up with anything better, so I guess I'll be figuring out how I can join... |
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7Enigma
- Senior Member
rated:
posted: Aug. 25, 2004 @ 12:36p
MarketVViz,
So I went to the PSECU site and could not find any place to either view or purchase CD's through them. I tried both visiting the site and logging in (as I am a member), but apparently either they have a poor layout or I'm just an idiot (betting on the latter).
justin
EDIT: What I wanted to do was see if I could easily transfer money from either my online checking or savings account directly into a CD without having to deal with paperwork and delays. From what I can tell this has to go through a CSR. |
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tooshy
- Frivolous Member
rated:
posted: Aug. 25, 2004 @ 1:40p
MarketVViz said:tooshy said:The best 5 yr rate is 4.8% with Capital One FSB (4.85% with Capital One FSB/Costco). One could opt for a 4.33% 'no regrets' 5yr CD with one time bump, which is better?
6 month penalty = 4.8/2 = 2.4%
loss of interest = 4.8 - 4.33/yr x 5 = .47% x 5 = 2.35%
Basically, 5 yr wins only if the CD is not broken, otherwise the gain of a slightly higher interest rate compared to the one time bump product (.47/yr) is washed. The 'no regrets' product seems to be my choice. Any better bump type CD rate?
BTW, I confirm Marketwiz's reporting of MBNAs insane penalty: half of unearned remaining interest!! Outrageous!!!
Yes (BTW -- I have no idea why my post is rated negative?). As your own numbers show, the "Big names" (Cap One, MBNA, etc) seem to have the worst deals when you factor in penalty. I think its a BIG MISTAKE to buy a 5 year CD expecting to hold it for 5 years (due to my personal inflation expectations which I realize not everyone would agree with). If rates jump 2% over the next 2-3 years, you are going to want to break the CD and buy a better one.
By the way, some people were asking about the compounding/dividend schedule for the PSECU CDs, its monthly (first day of month I believe). And so far no one has come up with anything better, so I guess I'll be figuring out how I can join...
Correction, PSECU 5 yr is higher...but the problem is how do we join?
Capital One FSB early withdrawal penalty on the 5yr is 6 months, not unreasonable....
EDIT: OK I see the Economic Value Replacement disclosure, I agree with MarketWiz totally and BTW don't see why his post was given a negative rating. Thanks for pointing out the egregious penalties by the BIG NAMES! |
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zeego
- Senior Member
rated:
posted: Aug. 25, 2004 @ 1:47p
You can purchase psecu cd's online and transfer $'s from your psecu share accts. Very easy.
Joining is "relatively" easy. I previously suggested a conga for all us cousins. Pls find other CD deals at cu's to make the conga work for everyone so existing psecu members don't get shorted.---z |
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prozario
- Senior Member
rated:
posted: Aug. 25, 2004 @ 2:34p
anyone has experience with watermark cu? 4% for 30 month is hot - surprised don't see much interest in it. Is this a good deal - considering you can bump up once. |
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MarketVViz
- Senior Member - 1K
rated:
posted: Aug. 25, 2004 @ 2:36p
zeego said:You can purchase psecu cd's online and transfer $'s from your psecu share accts. Very easy.
Joining is "relatively" easy. I previously suggested a conga for all us cousins. Pls find other CD deals at cu's to make the conga work for everyone so existing psecu members don't get shorted.---z
I noticed when joining that there was a box where you could give someone else credit as a referal. Anyone know if they have a referal incentive?
I noticed a "Certificates Purchase" link
which brings me to a logon page (I have to wait for the paperwork before getting an account/pin so I don't know what is beyond that).
It also says in their fine print that you have to notify them IN WRITING to bust the CD. |
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prozario
- Senior Member
rated:
posted: Aug. 25, 2004 @ 2:50p
anyone outside washington signed up with WaterMark CU? looks like you got to live in washington state, or be an employee of one of the listed companies. Supposedly you can be membership to certain organization qualifies as well. Any easyway to join wmcu? that 4% cd looks very attractive. |
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zeego
- Senior Member
rated:
posted: Aug. 25, 2004 @ 2:59p
"I noticed when joining that there was a box where you could give someone else credit as a referal. Anyone know if they have a referal incentive?
It also says in their fine print that you have to notify them IN WRITING to bust the CD."
In the many years of membership with psecu I've never seen a referral incentive. It would be nice though.
Most CD busts require human intervention rather than internet expertise. This puts busts on the radar screen. If busts become habitual by us, then you can bet that the FW effect will occur and the penalties for early withdrawal may increase.---z |
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RagingBull
- Ancient Member
rated:
posted: Aug. 25, 2004 @ 3:34p
The WaterMark CU is ending the end of this month. I still can't figure a way to get qualify |
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prozario
- Senior Member
rated:
posted: Aug. 25, 2004 @ 3:47p
RagingBull said:The WaterMark CU is ending the end of this month. I still can't figure a way to get qualify
They have a list of companies that you can be an employee of, or organizations you can be a member of to qualify for membership. But the problem is they're all in one list, and no easy way to tell which one is a company or which one is an organization (without goint through the list). It maybe possible to join one of those organizations, and then become member of CU. |
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uppchy
- Senior Member
rated:
posted: Aug. 25, 2004 @ 4:27p
capital one no regret CD is also a good choice. |
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lanb
- Thrifty Member
rated:
posted: Aug. 26, 2004 @ 4:43p
Here is the details on the early withdrawal penalty for the 30
month 4% APY watermark CD.
It depends on the the time LEFT before the full term
Time left Penalty (subject to a $20 minimum)
>= 1 year 180 days of interest
6-11 months 90 days of interest
< 6 months 30 days of interest
As pointed out earlier it has one "bump-up" option and the offer
ends 8/30.
They list "costco business center" as a eligible org, so maybe if u are
a costco member u can get in as well. worth checking.
So is this the best CD out there for 24-30 months ? |
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tooshy
- Frivolous Member
rated:
posted: Aug. 26, 2004 @ 10:26p
Costco Business Centers are located in certain states only, which leads me to believe it is not synonymous to Costco Business membership. |
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