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5% 5 yr Insured CD @ Telcom Credit Union Archived From: Finance

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alert mods    
   posted: Nov. 8, 2004 @ 9:34p

I came across Telcom Credit Union.
According to their website, they are offering a 5% APY 5 year CD NCUA insured.

"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"

How to enroll.

I am not in the market for 5 year CDs, but based on a quick search of FW Finance and check at Bankrate, I thought this might be of interest to some.

If not, oh well, I tried for my first FW Finance deal.


alert mods    
   posted: Nov. 8, 2004 @ 10:09p

that seems like a pretty good rate. not too experienced with CDs though... would be interested to hear what everybody thinks.


alert mods    
   posted: Nov. 8, 2004 @ 10:25p

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.)


alert mods    
   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


alert mods    
   posted: Nov. 8, 2004 @ 11:10p

nice post mrcheapskate, thank you


alert mods    
   posted: Nov. 8, 2004 @ 11:14p

Thanks, good info OP!


alert mods    
   posted: Nov. 8, 2004 @ 11:18p

What's the penalty for breaking it early?
(Sorry, didn't go to the website)


alert mods    
   posted: Nov. 8, 2004 @ 11:23p

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 If any or all of the certificate principal amount is withdrawn before the Maturity Date, a penalty will be charged.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.


alert mods    
   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...


alert mods    
   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.


alert mods    
   posted: Nov. 9, 2004 @ 2:50a

klep said:
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.

Yes it IS STANDARD for CDs to automatically renew upon maturity.


alert mods    
   posted: Nov. 9, 2004 @ 9:43a

klep said:One thing I noticed:

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?


alert mods    
   posted: Nov. 9, 2004 @ 10:09a

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?


alert mods    
   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.


alert mods    
   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.


alert mods    
   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....

 


alert mods    
   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.


alert mods    
   posted: Nov. 9, 2004 @ 1:28p

nice rate indeed.
Also, there is a promotion for 2.00% Special - 4 mos* at watermarkcu.org


alert mods    
   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.

http://ncua.gov/cgi-bin/cudataexpanded.exe?0062236


alert mods    
   posted: Nov. 9, 2004 @ 4:40p

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 ?


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