I have PSECU under scrutiny at this time. I STRONGLY recommend all members sign up for the virtual annual meeting upcoming on six July, which is the Monday after Independence Day.
I attempted within the last hour to elicit from them some indication regarding how things are going, given the pandemic. There was no response to that other than to be certain to attend the annual meeting. Which I shall do.
Are you concerned that they might stop the automatic scheduled top-ups for their CDs?
That of course. But equally or more important I am concerned about how PSECU is doing in the wake of the pandemic, and its devastating economic impact.
Itâs not PSECU alone. I have several financial institutions in my sights at this time for the same reason. It would be inadvisable for me to be adding to CDs at a financial institution which is at serious risk of going belly up. I could end up getting my money back . . . a âworse than deathâ scenario in todayâs very low CD interest rate environment.
When I have a CD somewhere, earning me 3% or 4%, last thing I want is for the financial institution to fail precipitating return to me of my funds!
Lets think about that for a moment. You are watching these financial institutions in order to do what exactly? If I add money to a bank, get two months of interest at 3.5% and then the worse that can happen is I get my money back and have to invest it at pitiful returnsâŚas opposed to what? If you have somewhere else more reliable that gives the same or better return put the money there to start withâŚotherwise you are no worse offâŚeither way you are going to end up with funds you will have to invest at a pitiful return. I fail to see the benefit to giving myself an ulcer over what might happen. Thatâs why you donât go over the fdic amountâŚif you are worried about losing your interest then by all means have that withdrawn monthly so you are staying AT the FDIC limit and not over. If you pull it out BEFORE it fails you are going to eat the EWP which is going to lower your overall interest rate significantly anyway.
As opposed to, in the first place, having placed the money with a more viable financial institution. I have multiple options for add-ons. The money needs to go into the strongest institution.
We agree on this. Last thing I would wish for you is ulcerative onset. Relax. Youâre gonna be fine. Trust me.
Me?
Iâm gonna continue doing my due diligence so I donât come down with an ulcer myself! 
The bottom line in any of the scenarioâs is at the time you have funds available to invest you pick the addon with a combination of the best interest rate and the highest rating at that time. Staring at them before you have the funds isnât going to do you any good because again EWP. Especially since their updated scores are delayed by a month.
If that is your approach, Iâll take no issue. That is not my approach. I prefer to maintain a weather eye at all times, always being aware of the lay of the land.
Why are you assuming Iâm without funds?
Gosh, if only. While perhaps technically true customarily, in the wake of the pandemic those updatings are pretty thin soup. Iâm doing what Iâm able to know as much as I can regardless. Itâs the best I can do. Sadly
I assume you do not have the funds because you stated that you had multiple add-ons available. If youâre sitting on funds when you could put them in add-ons and make a higher interest rate then thatâs rather silly.
There are times, when making assumptions about another personâs finances, when such assumptions can mislead.
Ok then you are saying you do have fund sitting around making less interest then you could be making. Either Iâm right or Iâm wrong. You donât get to declare âThere are times you might be wrongâ without acknowledging this time I was NOT.
In any case this debate serves no purpose. I gave you the benefit of having common [financial] sense and you choose to argue I canât know that for sure. WhateverâŚyou win. You seem to bask in making everything adversarial.
Perhaps, as in my case. You have more funds available in savings or money market for emergency. You do not want to tie up all your funds to add-on CDâs etc.
While your point is valid in the general sense we were specifically talking about funds available to invest into an addon. I was not referring to anyoneâs emergency fund, checking, savings etc. I donât consider those funds available for putting into the addon simply because youâve already designated them for another purpose. Emergency, day to day living expenses etc. Heck I have an obnoxious amount sitting in checking right now simply because it has to be there for TAXES since we have to pay for 2019 federal, state and two quarters of 2020 estimated taxes for both of those. Iâd LIKE to move it to savings but you sure donât wanna risk not being able to get the funds transferred in time when July 15th comes around.
I would personally be surprised if PSECU has not weathered the storm. I live in PA and itâs membership is generally comprised of State workers whose jobs have all been stable through the pandemic.
If you have several institutions, why consider strength before APY? I mean, if you have Bank A addon CD at 3%, Bank B addon CD at 3.25% and Bank C addon CD at 3.5%, why not put all your money into Bank C? If it fails and returns your money, then itâll be time to place the money in the lower yield banks, no? The only reason I see would be FDIC limits obviously.
You could always run into a perfect storm scenario but the chance of all of them failing at the same time is less than just one of them at a time, especially if they operate in different markets. At which point it doesnât matter where you put your money in initially, but at least you enjoyed higher yields while it lasted.
Now at equal or near equal yields, the bank financial strength could become more important obviously.
I understand your thinking. But it is important also to consider that any financial institution, with 30 daysâ notice, can terminate the add-on provision of its CD accounts. Should that happen one needs to move quickly to access and deposit funds into the CD before time runs out.
That money could, I suppose, come out of an existing add-on CD account elsewhere, following payment of the requisite EWP. My own preference is to play things day by day in hope some much shorter existing CDs I own might actually mature, saving me the EWP.
Also you have to consider any financial institution that closes off its add-on feature is likely doing so because it is under duress. That is an unstable situation.
As I wrote up thread, âspreadingâ remains an important objective to me. I did it the other way back following the 2008 crash. I didnât lose any money. But I was seriously uncomfortable having a large percentage of my money in just a single institution. To the extent I can spread things around, I certainly will do so. Do not want all eggs in just one or two baskets.
That only means you wonât be able to put new funds in though but your current amounts should keep yielding the same as before.
In my scenario above, if Bank C closes their addon option, you have 30 days to put whatever money youâd like in (probably not worth breaking EWP on other addons), and then youâll be back to one less addon option. But still, putting all your currently available funds in your top yielding addon CD would seem like the best choice, no?
The only counter scenario I can think of is if all banks terminate their addon options, and then your top yield goes belly up and you get your CD money from them back. Thatâd be a very rare scenario overall I imagine, unless you went only for banks with very poor financials. And I think youâd have some time to see it coming. Once banks end their addon options, youâd probably have good grounds to ask yourself whether itâs not a good time to pay the EWP on the riskiest CDs.
That said, I totally understand the added comfort of knowing you donât have all your eggs in one basket. I guess itâs a trade off vs how much yield/income youâre giving up for it. Again the old risk-adjusted returns I guess.
Yes, thanks. Back in 2008 I only had the one option. Am in better shape now with multiple options, having lived through that earlier experience.
There is very little time left now, only about ten more days, before we (I hope) are able to see at least a little bit of what has been behind the curtain for so long. I anxiously await that new data before making moves of any kind. It has been a really long wait.
Do appreciate the insightful and smart post by zzz . . . something I had not considered and a really helpful factor to add into the decision mosaic. Wonder if zzzâs thinking might also apply to NFCU. Not really sure. Still mulling the concept.
I live in the suburbs of the capital of PA, Harrisburg, and PSECU is very popular here and across much of the rest of the state. I am not sure when they expanded their membership to allow anyone in the US to join but for a very long time they were exclusive to state workers and other businesses across the state that offered membership to their workers as an exclusive benefit. I am describing, obviously, how many other credit unions developed but they remain very popular here for run of the mill banking and loans - checking accounts, car loans, personal loans, credit cards, mortgage loans, helocs etc. And they still maintain relationships with companies to offer membership as a âbenefitâ of employment which I find amusing. They seem to have a very loyal following. I have a checking account with them and their 2% cash back VISA card in addition to the CD. Like I said upthread, I would be very very surprised if they do not weather the storm with so many of their members in very stable state jobs. I will say, however, their auto loan rates are actually below what they are paying us on our CDâs so that is a bit of a concern! However, I routinely look at their repossessed inventory of vehicles to see if they have anything interesting as the prices are usually good. They currently donât have any repossessed vehicles listed for sale which I see as a positive. Annual meeting is coming so weâll find out soon.
I have been browsing around looking for a place to park money that is becoming available. I am primarily considering 3yr CDs and the rates all look miserable. The best I can find is the 1.77% jumbo CD from Hughes. I regret not jumping onto Keesler membership last year. 
These are very difficult and trying circumstances for us savers.
While I feel blessed to have several add-on CD options, I am chastened and just a bit frightened by the realization I did not think, at time of their purchase, that I ever would need them!
To have been so wrong; itâs scary. You wonder what else youâre getting wrong . . . right now!
I know this is not wrong: black swans suck. I hate 'em.