It’s here: Ally Bank® 13-month Select CD | Special Promotional Offer
If you want to renew a CD, you can get an additional 0.05%.
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There are certain credit unions you just gotta join. For lack of a better appellation I will call these “deals” credit unions. They, more often than not, have “stuff going on” . . . . stuff which can put money into your pocket.
A prominent example is Keesler . . . but everybody already knows about Keesler. I offer you today a new name within this same genre: Blue Federal Credit Union. Blue is in Cheyenne. Anyone may join.
Give 'em a look.
Where can we find these local deals?
What do you like about Blue?
They have cool deals on a lot of stuff. Look through their web pages. And, as with Keesler, you never know what they’re gonna offer next. So I guess I like the Blue management team, too.
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Last time Andrews did their 3% CD it was available for a good long time. Here’s hoping they do the same with this one because none of mine are maturing until in April. I had the previous 84 month CD till I broke it to put into the very limited 4% Cd’s we had available. At the time I did the math and had already had the Andrews 3 years so the term length between the 3 and 4 was mostly the same and over time the 1 additional % more than covered the penalty.
referring to shinobi’s post, Also, Andrews continues to offer you over 3%, provided you have at least $1000 to invest. But you must make an 84 month commitment… correct?
Good eye on Blue FCU. They’ve got a 30 month add-on CD, rates are: 1.85% for $2k-50k, 2.1% for $50-100k, 2.35% for 100k+
Some kind of relationship rewards thing I didn’t look into, curious if anyone gets into it
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Yes, you are right. Here, once again for convenience, is the link to that deal:
Link to Andrews 3.05% APY CD deal
Deal is good at this hour BUT can change at any time. A good deal for folks who do not have big bucks ready to go at this time. A good deal for folks wanting over 3% APY on their investment. Not a good deal for folks uncomfortable with making a seven year commitment.
I try to post as much helpful stuff here, stuff related to CDs, as I’m able to post. I realize not every item I post is helpful to or appropriate for every participant. I do as best I’m able.
Now, here, a twist: I’m asking for your help. Please. This is something for myself, personally, but it might (or might not) turn out to benefit all of us. Also, this is something I realize few of you ever likely have done. I have a lot of experience with CDs and I have never done this. So if there are no responses I will understand and it is OK.
Please share as much as you are able of your experience, if you have actual experience, with borrowing on a CD. My best understanding is the CD remains intact so no penalty. But you get the money and must pay the financial institution interest on what you have borrowed, but at a reduced rate. Again, I have no actual experience. If you do I would be grateful if you would share with our group here. Thank you.
My personal situation which prompts this request for help:
In the words of President Obama, I acted “stupidly”. A while back I got it in my head that it would be best to line up a bunch of CD maturities for the time period following the USA POTUS election. This means I have WAAAAY too many CDs maturing in 2021. Clearly this strategy was, and remains, a massive FAIL!!
So I’m a consummate donkey, braying wildly, and searching for a way to get out of the deep pit I dug for myself, without having to pay early withdrawal penalties all over the place. I do not see interest rates recovering any time soon (just my opinion, not trying to convince anyone else). I need to lengthen my maturities big time on at least some of this 2021 money before the few deals out there now also evaporate.
On a related note:
You might wonder: why not just use your add-ons next year?
Well, that was the plan and remains the plan for some of the money. But rates are crashing so seriously that I question whether or not my add-ons will even continue to exist a year hence. After all, those add-on terms can be modified with just 30 day’s notice! So looking for a way to seize upon the very limited number of existing “birds in hand”, right now, before they fly the coop.
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Again, only if you roll over and let them change the terms. Otherwise, the bank failing and the CDs being liquidated is the only thing preventing you from using the add-on feature. (I know you disagree, and I guess it is possible a CD could specifically state the add-on ability is entirely at the issuer’s discretion.)
But regardless - a secured loan isnt anything unusual. However, it’s typically going to cost you more than the underlying CD is earning. Obviously the specific details of each CD and loan are what’s going to determine the bottom line - but since your looking a full year+ into the future, you’re probably going to be better off eating early withdrawal penalties than you will be carrying a CD and offsetting loan combo. With an early withdrawal penalty the new CD’s interest will offset the penalty and then start earning you money, while the loan is going to be a net-negative the entire duration.
As a side note, you dont know that your strategy was a fail. It’s a bet that remains open. And even if it doesnt work out for the best, that still doesnt mean it was a bad bet at the time. Lengthening your maturities now could very well lock yourself in to below market rates for a much longer term. Rates dont have much further to fall (1% isnt much incremental movement); not to say they’ll be going up any time soon, but I feel the time to benefit from long-term rate locks has passed. If you’re suddenly that afraid of the political direction we may be heading, you’re probably best to get out of cash entirely.
Thank you, glitch99. Your reply is interesting and I hope benefits others, too.
But again, more than anything, I am hoping for responses from persons who might actually have gone through the process of borrowing on their CD. It’s not something I ever have done.
I have done it a number of times. First, you have to see if the specific credit union allows it. Usually, the rate will be whatever your CD rate is plus a couple of points. You will be allowed to borrow a certain percentage of the CD amount and it will have to be paid at maturity of your CD or sometimes earlier, depending on the credit union. I have only done it when I need the money and I am only a few months away from the CDs maturing. If you do it an entire year before maturity, the interest costs will be very high and will probably exceed the prepayment penalty for the CD. Also, your credit score will get dinged.
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Actually I’m in that same boat… and to boot, most of my add-on CD’s mature in 2020.
But I like what glitch99 said, about “It’s a bet that remains open”. Because if we lengthen these new CD’s maturity, we may end up with rates (at that time) below market. I have said often I’m not to interested in CD’s over 3-4 years.
I have many CD’s that mature this year. So far I’ve managed to get at least 3% or close 2.98% for maturity year 22-24 & lastly one 2025. So let’s not get to discouraged!
shinobi, you may have some other problem to work on that could take several minds working together to help you out. Hopefully all these bright minds are here with lots of ideas. 
Thank you, goldendog . . . a lot! Very kind of you. That is the sort of input I am seeking. Great post.
And you know I havent, how? There’s nothing mythical about it, you call up the bank that holds the CD and ask about a secured loan using that CD as collateral. The loan rate/fees either makes it advantageous or it doesnt.
Now getting a loan from a bank that’s backed by a CD held at another institution is going to be a bit more involved. But if you find someone that’s willing, it’s still going to come down to the rate/fees.
I dont know what you think anyone could tell you about “the process” in general that’s going to trump the rate and fees at banks you actually have access to? It’s going to be 1) apply, 2) get the money, 3) cant cash out CD until loan is repaid. There isnt a whole heck of a lot more to it than that. No one here is going to be able to tell you if it’s an option with your specific CDs.
Such secured loans are generally meant to provide temporary cash flow, where you want to retain the CD and rate long term but temporarily need cash now. It’ll be very rare for the pieces to come together where it’s more advantageous than simply cashing out the CD early (like in goldendog’s example, with only a couple months to maturity and a large early withdrawal penalty).
Working now with goldendog’s information:
I am looking upon this as a sort of arbitrage . . . I think that is the right appellation. As goldendog points out, it can be an expensive approach if you borrow the money . . . period . . . and then use the borrowed money to make a purchase, for example. I agree with that very much.
But that is not my thinking. I would immediately reinvest the money into a new CD, one of the few I have been highlighting up thread for a while. Hence my net cost for the funds would be only what goldendog calls “a couple of points”. This approach definitely merits a closer look.
Thanks again to goldendog for the very kind assist.
But this is your flaw - you are reinvesting the proceeds in a new CD either way, by taking out a loan or by cashing out the CD early. The only math that matters is the early withdrawal penalty compared to the ongoing borrowing cost.
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Agreed. So we have six or more months (could be twelve) of lost interest at the FULL interest rate of the CD . . . vs. “a couple of points” net interest cost for a quite possibly shorter interval of time.
Advantage borrowing.