Against all odds, the NFCU five year CD 3.5% APY is holding.
Q: Shin, you really are dumb as a box of rocks. You were sure the deal would have folded by now. True?
Sadly, yes. I so clearly have no clue what NFCU is doing . . or thinking. This reminds me a little of Sharonview. Even today I wonder how they can be content with millions of dollars of 4% money when they could go anywhere and borrow the money with less expense. How can NFCU continue to offer us 3.5% in this market?
Only answer I can conjure, in both instances, is that the potentates at Sharonview and NFCU believe fervently interest rates will ascend. I do not see that happening any time soon, and the clock is ticking:
Trump continues his vicious jawboning, directed at the Fed. This will go on at least until the election. Trump was around in 1992. He knows what the Democrats and the mainstream media can do with even the slightest downturn in the economy during an election year.
And with Obamanomics, if Trump loses, we waited in vain eight years for interest rates to ascend meaningfully. It never happened.
So just exactly what is it those potentates anticipate, in the upcoming years, will happen to boost rates and justify their current, ongoing largesse? Beats me.
As a service to other participants here, I can report the following:
As of this Monday morning the GTE Financial 3.3% APY promo five year CD lollipop continues to be available. The buy-in remains at $100,000 and, yes, it remains an add-on.
Iām not so taken by surprise on this one because the slightly lower interest rate and the prohibitive buy-in limit participation compared with the NFCU offering discussed one post back.
Still, this is an attractive deal. Just look at Kenās blog this morning. He is featuring a long AmeriCU CD there at the very same 3.3% APY, and it is NOT an add-on.
So how much is the add-on feature worth? That will vary with each individualās views. But surely it has real value. I would much rather have the feature than not at the same interest rate, thatās for certain.
It and itās more reasonable starter balance version both give folks a place to put their money if a year or two down the road they have cdās maturing (as many of us do with 17-24month terms being what has the most attractive rates recently) while rates are sitting in the 2% range everywhere. They obviously have the option to overpower (go past FDIC limits) these addons and earn the 3%+. I think Iāll have to reevaluate various low cost etfās. I did notice THIS reopened to the public (closed since 2016): Vanguard Dividend Growth Fund open to all investors again
Agreed and thank you, famewolf, for mentioning the GTE 3% five year add-on CD product offering. I did not mean to ignore that CD, but I have to assume almost everyone here already has one. I bought mine months ago, the buy-in being only $500. But for sure a 3% add-on CD is today looking even more attractive than it appeared back when GTE first introduced the product.
Of course for those of us who purchased this CD back at its inception, it no longer is a five year situation . . . which is also nice.
Finally, the 3% five year add-on offers an additional advantage, and this is something to which famewolf alluded tangentially:
When you are able to buy in at only $500 you have remaining $249,500 of insurance headroom in your CD. That is pretty sweet and it is not something you have with the 3.3% add-on CD. Sure we all know how to expand insurance headroom. But it is a more comfortable situation when no such need exists!
A CD update this morning and it is not anything good:
Empower Federal Credit Union cut the interest rates on its best certificates last Saturday. There is no sense going into detail. Suffice it to say the new interest rates are unattractive. The trend toward lower interest rates, sadly, continues unabated.
Iām sure hoping that Navy holds the 5yr 3.5% for the next couple days. Iām transferring my Cap 1 bonus money over to Navy today. Keeping my fingers crossed.
Good for you, pattyb53. I also decided to dump more money into that 3.5% CD, which more and more is appearing to be the āonly game in townā.
I telephoned them, explaining I was breaking other CDs and would the deal still be there tomorrow? They said no problem for tomorrow, Thursday.
As for safety up beyond the $250K threshold, opinions appear to differ. Ken gives them only an āAā rating . . . not āA+ā. They were five stars a couple of years ago but might not be that highly rated now. At the same time it is a HUGE credit union and highly unlikely to fail any time soon. But five years is a long time. I will be keeping a weather eye.
There is an alternative approach available for your consideration, pattyb53. This official language is lifted from the NFCU Certificates writeup:
Dividends that have been credited are available for withdrawal anytime without penalty. You can request to have the dividends remain in your certificate account, have them automatically transferred to your Navy Federal savings account, checking account, or Money Market Savings Account on the first of the month, or have them sent to you in the form of a check
Not all financial institutions are as considerate as is NFCU in this regard. You have the option of withdrawing your credited interest without penalty at any time. This option provides a kind of ārelief valveā if NFCU commences going to the dogs three or four years (or whatever) from now.
You may view the above NFCU certificate language in context, here:
Does the coverage double if you add another person on the CD at NFCU? I found this but their examples are a bit unclear (to me). Anyone know? Might help out pattyb and othersā¦
Typically yes. Having multiple PODās will also increase coverage if the bank/credit union supports POD (Iāve encountered one local credit union which doesnāt allow/handle POD).
Opened my final 3.5% certificates this morning at NFCU. They were good to their word regarding continuing availability of the deal today, Thursday.
So how is it even possible the Navy folks are sustaining this deal in the face of falling rates everywhere? I have no clue and I never would have seen this coming. Instead, for me, ādonāt look a gift horse in the mouthā is the phrase which comes to mind. Course trees donāt grow to the sky. I would not blame anyone else for making haste on the deal, despite evidence so far of its sustainability. I mean just go over to Kenās website and noodle around. What an absolute garbage dump of CD deals. Itās a wasteland over there!
Q: So shin, if youāre done at NFCU, where you turning next?
Itās not a cornucopia of sweet opportunities, is it. There really is just a single alternative to NFCU and, yes, it remains alive and available this morning!!
Q: GTE?
Yup. At 3.3%, with the add-on feature, that GTE cotton candy is about the only game remaining in town, if you disregard NFCU, or if youāre full up at NFCU. Of course there are some pretty salient negatives in Tampa:
First and foremost, GTE is no NFCU when it comes to financial stability/viability. GTE is much more a local Tampa entity . . . at best a regional one. Capitalization at GTE, compared with NFCU . . well . . itās a joke! And five years is a long time. I think NFCU will be around in five years. Iām somewhat less certain about GTE.
All of that said, there is the matter of not placing all eggs into one basket . . or into just a small number of baskets. My personal preference is to spread things around. And GTE is alive and fairly well today, with a B+ rating. So regardless their warts, Iām looking seriously at GTE now.
With GTEās financial strength rating, Iād keep those CDs within the NCUA limits. So $250k individual accounts + $250k joint accounts. So 3 accounts would yield you about $25k/yr there, all with NCUA insurance. The real risk however is if they do go belly up in 1-2 years, your fixed income options may very well be pretty bleak.
There are other, more powerful, credit unions in the Tampa region. If the NCUA had one of them take command at GTE, there is always the possibility the rate and deal could be sustained. I donāt really see GTE turning turtle in the near term. It will take a significant and sustained financial downturn to take 'em out.
My 3.3% add-on promo CD account at GTE is open, but unfunded. The rate is locked for 30 days, during which interval I must fund the account or lose it.
I was not able to open the account online while retaining the 30 day funding option with rate lock. Online, only instant funding is acceptable. Was successful, though, with a telephone call to them. I am an existing GTE member, obviously.
This was a help for me, as I have CDs elsewhere which will mature within that 30 day window. Earlier today I was facing need to close other CDs early, an alternative which I prefer avoiding. So now have a bit of breathing room.
The rep at GTE told me they are swamped with new CD applications. In this falling interest rate environment, I believe her.
I hope they donāt obviously since their add-on CDS are my parachute against tumbling rates. But Iām cautiously optimistic on their ability to handle large influx of money as time goes on. If rates continue to go south, and these add-on CDs becoming increasingly more compelling to redirect cash into, I donāt know how a bank their size will handle obligation to pay the rates advertised as the balance grows in those CD accounts. But hey maybe they got a better crystal ball than meā¦
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