Looking for On-line CDs with Sound Institutions

[peterinwa]

Hello,

I need to get five CDs so I'll have the full FDIC coverage in each, and even though they have FDIC coverage I want to be sure they are established, sound institutions.

I lost a CD in the "savings and loan scandal," and FDIC covered it fine. But I lost a few week's interest, negating the higher rate I got by choosing a very high rate from a not-so-established institution.

I can easily find lists of the best CD rates on the web. I'd just like to know the names of some savings institutions that are relatively sound.

So far I'm thinking ING Direct, WaMu, and World Savings would be good choices.

I'm not looking to analyze these institutions or learn about ratings or anything that complex. I'd just like the names of some more big outfits that aren't about to go under like a small, community bank might.

Thanks so much,

Peter

[disneysteve]

Go to bankrate.com and search for CDs there. You'll find some of the best rates and all with FDIC insured institutions.

[scfr]

Hello,


I lost a CD in the "savings and loan scandal," and FDIC covered it fine. But I lost a few week's interest, negating the higher rate I got by choosing a very high rate from a not-so-established institution.


Peter

How long did it take you to recover your money from the FDIC? Was it a couple weeks, or closer to a month? There has been some discussion on this board about how long it takes to recoup funds from the FDIC, and it would be nice to hear from someone who has actually been through it.

[peterinwa]

When was the Savings and Loan Scandal? Maybe in the '80? Anyway, I'm not really sure but two weeks has stuck in my mind.

I know it wasn't much longer.

[peterinwa]

I just had to vent that I have never hated anything to do with finance more than trying to find five banks for my five CDs.

I love to embellish, but I actually spent five or six hours yesterday working up a spreadsheet and picking five banks... eliminating ones that looked too risky.

Today I'm phoning them and finding out how hard it is to move money around. At best there are wire transfers with fees which I suppose I shouldn't be so petty about. At worst World Savings tells me I have to mail the money or just stop off at a branch. That's on-line banking? I don't think so! I don't live in a state with a branch and I'm not about to lose interest with the mail!

Grrrr.

Maybe the mattress isn't such a bad idea after all.

Peter

[poundwise]

ING, Wamu, etc. would be lousy choices. You can get a better rate with an online savings account from GMAC or Emigrant that you can with a CD from ING for instance.

Check out IndymacBank and their current offering of 5.55% APY on either a 5 month or 1 year CD. That's a great rate from a solid institution.

Also, AmTrust Direct offers a 5.41% APY, 1 year CD with only $1,000 required.

[InDebtInDC]

Do you guys think CDs are a good idea if you have other investment options available?

[disneysteve]

Do you guys think CDs are a good idea if you have other investment options available?

It depends on what the money is for. I have money in a CD. I also have money in checking, money market, stocks, bonds, mutual funds, savings bonds, real estate, etc. CDs are perfectly good for the right reason.

[disneysteve]

picking five banks... eliminating ones that looked too risky.

Peter, what do you mean about banks that looked too risky? What are you basing your risk assessment on?

[zee8]

I read ING direct is offering 5.21% APr for 6 moths cd certificaticate. My question is , if you put 100$ for six months will the bank give you your 5.21$ at the end of six month? Has anyone tried this?

ING is FDIC insured by the way.

[zee8]

CDs

, etc. CDs are perfectly good for the right reason.

Could you give one example that you know of for CD is a good enough option?

[disneysteve]

I read ING direct is offering 5.21% APr for 6 moths cd certificaticate. My question is , if you put 100$ for six months will the bank give you your 5.21$ at the end of six month?

No. If the rate is 5.21%, you would have to keep the money invested for 12 months to earn $5.21. You would earn half that, or about $2.60, in 6 months.

[disneysteve]

Could you give one example that you know of for CD is a good enough option?

Some people keep part of their emergency fund in CDs. An EF is not something that you need to access all at once, but rather over a period of time. So you can keep some in a money market and some in a CD, or a series of CDs laddered to mature at different times, perhaps one every 30 days.

Another example would be money that is being set aside for a particular purpose. For example, our daughter's bat mitzvah is next September so we will have a set expense to pay for at a known time. We could put a chunk of cash into a 1 year CD. It would mature just before that bill comes due.

[peterinwa]

ING had a great rate but it was lowered before I applied. Surprisingly -- for a bank -- Wamu had a great rate for a 6 mo CD... 5.5 APY.

I ended up getting one CD with Wamu and one with Discover. Both great rates.

I learned something about all this in the process. I have a rich friend with a rich partner. One plays this game, moving CDs around for the best rates, while the other simply doesn't think it's worth the bother.

One thing I'm learning is that your money ends up sitting for days without interest. After getting it all wire transferred into my checking account, it will now take days for the CDs to open.

For this reason, I compromised and left half my money with my broker. I will put it in CDs through him. The rates are lower, but it's so easy. You move it into a CD and then the day it matures it drops back into your money market.

IndyMac and others I looked at had low bankrate.com ratings, or wouldn't open an account by transferring money from your checking account. World Savings asked me to come into a branch with my check, or mail it which means a week without interest. This is on-line banking?

Thanks for all your info everyone. I'm set for six months!

Peter