"Must be a member of Telcom Credit Union, though anyone can join. $500 min investment...rates as of nov 1, 2004, subject to change...Deposits insured up to $100,000 per member by the NCUA, agency of the Federal Government"
From their website: http://www.telcomcu.com/ASP/whocan.asp
Our field of membership is OPEN TO EVERYONE by virtue of a $2 donation to the Salvation Army Bed and Bread Program. Once you successfully join, Telcom will match your $2 donation!
PLEASE NOTE: (A potential member must be qualified by Chexsystems and Experian before an account can be opened.)
SeattleNative
Senior Member - 1K
posted: Nov. 8, 2004 @ 10:48p
Although I don't invest in 5-year CDs, this is a great rate for this CD maturity in today's marketplace! Thanks very much to OP
good god. i can tell you didnt goto the site. right on the linked page it says
Early Withdrawal Penalties: Certificates are subject to early withdrawal penalties. The registered owner contracts to keep the funds deposited until maturity. If any or all of the certificate principal amount is withdrawn before the Maturity Date, a penalty will be charged. The penalty shall be 90 day interest on 6-month and 12-month CDs and 180 days interest on all others.
took less than 2 seconds too.
klep
Senior Member
posted: Nov. 8, 2004 @ 11:44p
One thing I noticed:
"Easy to open, automatically renewed at maturity"
I could be wrong (I don't do CDs usually either) but I don't think it's standard to automatically renew a CD when it comes due.
Also, they keep mentioning that the rate is subject to change. CD rates don't change once you buy them as far as I know. Not sure why they'd highlight that...
xerty
Senior Member - 2K
posted: Nov. 9, 2004 @ 2:38a
I'm not currently in a position to use this, but are some folks able to get a fixed rate HEL or HELOC at less than 5% APR? If so and if you are currently itemizing for the mortgage interest deduction, there could be some arbitrage here. Cash out all the equity in your house to the CD, lock in a rate <5% and take the difference to the bank.
Also, they keep mentioning that the rate is subject to change. CD rates don't change once you buy them as far as I know. Not sure why they'd highlight that...
I'd also like to know.
They can't change your CD rate once you lock it in, is that correct? Or is it that, though its uncommon, banks CAN change your rate?
I have a question. Suppose you invest $1000 on a one-year CD with 2.75% APY. You renewed for the second year at the same rate. Then At the end of the second year, you are supposed to get 1000 * 1.0275 * 1.0275 = 1055
If you invest $1000 on a two-year CD with 3% APY. Then at the end of the second year, how much will we get? 1000 * 1.03 * 1.03 = 1061 ???? Is this right?
unknownshopper
Senior Member<br>6K
posted: Nov. 9, 2004 @ 10:22a
DisciplineHedge said: They can't change your CD rate once you lock it in, is that correct? Or is it that, though its uncommon, banks CAN change your rate?
Normally, no. But rates can be changed if the institution is taken over by the regulators.
FWIW, I played this game with S&L's "back in the day." I would search out the absolute highest paying insured rates regardless of the institution's shakiness. And some were absolute screwball comedies of errors. Any reasonable person would have fled. I purchased CDs. Yeah, that's the kind of vulture I am.
Took a few bank failures before my wife got over being nervous about it all. But we always came out OK.
Usually this "subject to change" wording just means that if you come in with today's newspaper ad, you get today's actual rates regardless of what the ad says.
I'm very tempted to play this game again with CUs.
unknownshopper
Senior Member<br>6K
posted: Nov. 9, 2004 @ 10:24a
zhiyi said: I have a question. Suppose you invest .... You renewed for ... Is this right?
When your CD renews, it gets the rates in effect on that future date, not the date you purchased the original CD.
tooshy
Frivolous Member
posted: Nov. 9, 2004 @ 11:11a
Great rate, thanks OP
This rate is such an anomaly as other bank rates are still falling. Hmmmm....
Never heard of this credit union and just hate to spread our meager savings too far and thin. My greatest nightmare is if I should die it will be a pain and a chore to gather the money/change ownership....
jlrdallas
Senior Member - 1K
posted: Nov. 9, 2004 @ 11:16a
zhiyi said: I have a question. Suppose you invest $1000 on a one-year CD with 2.75% APY. You renewed for the second year at the same rate. Then At the end of the second year, you are supposed to get 1000 * 1.0275 * 1.0275 = 1055
If you invest $1000 on a two-year CD with 3% APY. Then at the end of the second year, how much will we get? 1000 * 1.03 * 1.03 = 1061 ???? Is this right?
Right, but only if compounding period is annual. Compare APR and APY. They'll be the same if compounding is annual, otherwise, APY will be higher.
micecali
Senior Member - 1K
posted: Nov. 9, 2004 @ 1:28p
nice rate indeed. Also, there is a promotion for 2.00% Special - 4 mos* at watermarkcu.org
srenna
Senior Member
posted: Nov. 9, 2004 @ 2:13p
Justsomebody said: All: Always due diligence - don't forget to check out ncua.gov.
Good idea. Just checked and, yes, they are insured. Chartered in 1936.
xerty said: but are some folks able to get a fixed rate HEL or HELOC at less than 5% APR ?Almost all HELOCs are variable. Anyone know of a HEL < 5%, at least for a few years or so ?
SeattleNative
Senior Member - 1K
posted: Nov. 9, 2004 @ 9:12p
Penalties for early withdrawal vary between different banks and CUs. The early-withdrawal penalty for this CD, 6 months' interest, is steep but is farily typical for a 5-year CD.
Early withdrawal penalties are important to understand before you invest in a CD. Depending on the specific bank or credit union, early withdrawal penalties tend to be shorter on CDs of 1 year or less (i.e. typically 90 days' simple interest, sometimes the penalty is as short as 30 days).
gwagwa
Ancient Member
posted: Nov. 10, 2004 @ 11:17a
It isn't really that steep is it?
Let's say you only put $ in it for one year. That would mean that you would only receive 6 months interest total, so that would be a rate of 2.5% (roughly). If you put in $ for two years, you lose 6 months, so that would be a rate of (5+2.5)/2 = 3.75% (roughly).
Or is there something funny with my maths?
(edited for typo)
srenna
Senior Member
posted: Nov. 10, 2004 @ 11:59a
gwagwa, yes, the penalty is 180 days on CDs with terms over 12 months. Using six months makes for easier figuring and its close enough for our purposes. Your calculation for the effective interest rate for closing out the CD after one year is correct. For closing out the CD at two years, the effective rate would be 3.75% (7.5/2 = 3.75).
tooshy
Frivolous Member
posted: Nov. 10, 2004 @ 12:18p
As we calculate the penalty hit on early withdrawals, I think it is important to remember banks and cu's don't have to 'approve' early withdrawals at all. If interest rates shoot up, it would be to their advantage to decline early withdrawals. It usually says in the terms and conditions something to the effect of 'if approved', so I am leary.
Golden Bay Federal Credit Union is offering 5% APY for 24 months for the month of December only.
http://www.goldenbay.org/
AblyOgden
New Member
posted: Dec. 20, 2004 @ 2:30p
I have opened one of Golden Bay's 5% share certificates. The minimum is $10,000, the service was great and they also offered me a checking account that let's me use ANY atm for free - both sides of the transaction.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
Members of our community may attach files to a post in accordance with the User Agreement. FatWallet is not responsible for the content, accuracy, completeness or validity of any information contained in any attached file. Files have *not* been scanned for viruses. Be especially wary of Excel files which may contain malicious content.
