Should I renew

[Duchesse]

Re: Should I renew

I want to thank all of you for your advice. I have visited all of the sites recommended and then some.

For anyone in the same boat as I am surf over to interest.com as well. They have a great calculator.

My funds mature on the 15th of May so I had better decide.

I already purchase SPY, DIA, and QQQQ monthly in my IRA.



GMAC and Pentagon Federal Credit Union are the clear winners.

Anyone here have any personal experience with their (Pentatgon's) online banking?

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One other thing, there are "eligibility" requirements to join the Pentagon Federal Credit Union. The have a questionnaire for you to check your status. If you are not in the military, retired from the military or have some other sort of affiliation with the military then you must join the National Association for Military Families which has yearly dues of $20. This makes you automatically eligible to join the credit union.

[Duchesse]

Re: Should I renew

To: Sweeps


I really liked your idea for laddering, I even printed a copy so that I could study it. One thing more. I hate to be a pain in the a** but those 3 month CD's are a waste of time. I can get better rates with a Money Market account .

Can you give me another laddering example using 6month, 9 month and 12 month and 15month CD's.
E*trade is the only one I found with a 15 month CD (5.16%).

18 month GMAC, E*trade both (5.16%) and Ing(5.00%)

2year GMAC 5.21%

[CJsoccerchic]

Re: Should I renew

Sweeps - NICE laddering - do you do it yourself?
and I think the same as Duchesse - you can make more money in a MMA, so another example would be great!

[Duchesse]

Re: Should I renew

I linked to this from Jeffrey's PF Blog. This site has info on a 5+% savings account and 5.4+% CDs. Might be worth checking out.

http://bankdeals.blogspot.com/

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That CD 5.51% is at World bank and is offered at the branch only. Their online bank CD is 5.16%

That same blog says that the best 6 month CD rate at this time is at E*trade 5.21%

[Duchesse]

Re: Should I renew

Sweeps - NICE laddering - do you do it yourself?
and I think the same as Duchesse - you can make more money in a MMA, so another example would be great!

I doubled checked and both GMAC and E*trade have 3 month CD with rate at 4.75% and 4.74% respectively. So I think I have it, thanks. At this point I don't have an account with either one of these institutions. I'd better get on it!

[sweeps]

Re: Should I renew

I really liked your idea for laddering, I even printed a copy so that I could study it. One thing more. I hate to be a pain in the a** but those 3 month CD's are a waste of time. I can get better rates with a Money Market account .

Can you give me another laddering example using 6month, 9 month and 12 month and 15month CD's.

Hmm, ok. If you want a ladder of 15-month CDs with one maturing each month, you could do this:

May: Deposit $14,800 in the MMA and $1,300 each in a 6-mo, 9-mo, 12-mo and 15-mo CD.
June: Withdraw $5,200 from the MMA and deposit $1,300 each in a 6-mo, 9-mo, 12-mo and 15-mo CD.
July: Withdraw $5,200 from the MMA and deposit $1,300 each in a 6-mo, 9-mo, 12-mo and 15-mo CD.
Aug: Withdraw $1,300 from the MMA and deposit $1,300 in a 15-mo CD.
Sept: Withdraw $1,300 from the MMA and deposit $1,300 in a 15-mo CD.
Oct: Withdraw $1,300 from the MMA and deposit $1,300 in a 15-mo CD.
Nov: Roll May's 6-mo CD into a 15-mo CD.
Dec: Roll June's 6-mo CD into a 15-mo CD.
Jan: Roll July's 6-mo CD into a 15-mo CD.
Feb: Roll May's 9-mo CD into a 15-mo CD.
Mar: Roll June's 9-mo CD into a 15-mo CD.
Apr: Roll July's 9-mo CD into a 15-mo CD.
May: Roll May's 12-mo CD into a 15-mo CD.
June: Roll June's 12-mo CD into a 15-mo CD.
July: Roll July's 12-mo CD into a 15-mo CD.

EDIT: Ok, just saw your last post. I'll leave this here anyway in case you change your mind.

[Duchesse]

Re: Should I renew

Here's what I decided to do.

As all of you know the best MM rate I can get is 4.75%. I saw no sense in tying up my money for 3Months in a CD 4.75%.

So, in May,

I bought a 6month 5.21%, 9month 5.16% , and a one year 5.30% CD .

I will purchase a 1 year CD in June ,
July,
August ,
September,
October, from my (GMAC 4.75% MM).

In November

I will roll over the 6month I bought at Etrade 5.21% into a 1 year CD.

I will then purchase a l year CD for December and
January. GMAC MM

In February,

I will roll over the 9month I bought at GMAC 5.16% into a 1year CD. I will then purchase a 1 year CD for March
and April. GMAC MM

When May arrives,

Voila, I will have a 1year CD 5.30%( or better if rates go up) maturing every month.

[markio26]

Re: Should I renew

i never renew... unless the rate is very high.. i go for the longest term.. our local bank has a cd that you don't need to ladder... they just charge you on the money that you withdraw and use.. they also, bump it up when the rates go higher than your cd rate... i would not put all of my eggs in one basket.. if this is your only money... do $1000 in an emergency fund first... then i use capital one for cd.. bofi for small business money (ebay, hgp, good rebated deals). make sure your yearly bills are covered with your wages....ingdirect is for our fun money, vacations and such.

[Duchesse]

Re: Should I renew

Thanks for the advice Mark.

I chose CD's because I am diversified enough, in fact I may be spread too thin (stocks, bonds, indices, Money Markets, Mutuals, real estate). This is my CD money which I chose to ladder because with the ladder it becomes liquid every month and it is not at risk. This helps me to sleep at night and balance my portfolio.

[TeenInvestor2688]

Re: Should I renew

is it correct in saying that a 4.5 6month cd is only getting 2.25 percent for the 6 months? Basically you would get half of the interest. So with a 4% 3 month CD, you would get 1% for that 3 months? If this is true, what is the purpose of a 3 month cd, just if you will need the money soon?

[Duchesse]

Re: Should I renew

To Teen:

Yes you are right. That is why I decided to forget the 3 month and start at six months. I will be getting 5.21% or half of that for the 6 month CD, but this is the same way that interest is compounded at the bank, there I would get 4.75% maximum at this time. The money must remain for 1 year for you to get the interest promised whether it be a CD or a Money Market account. I know it's a little work but it's fun for me and the money is not at risk!

[sweeps]

Re: Should I renew

is it correct in saying that a 4.5 6month cd is only getting 2.25 percent for the 6 months? Basically you would get half of the interest.

Actually you would get a little less than 2.25%. The 4.5% is the APY, which means the money must be invested for a full year in order to attain that full yield.

So with a 4% 3 month CD, you would get 1% for that 3 months? If this is true, what is the purpose of a 3 month cd, just if you will need the money soon?

If you want to think of it that way, sure, but compare to other investments the same way. For example, if a stock earns a steady 10% return but you hold it for only 3 months, you're really only earning 2.5%.

[Duchesse]

Re: Should I renew

E*trade CD rates



3month 4.75 APY 4.64APR

6month 5.21APY 5.16APR

1year 5.3 APY 5.16APR