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|Subject: Re: CDs or similar investemnts||Date: 4/10/2004 9:38 AM|
|Author: Lokicious||Number: 9904 of 36082|
Didn't see previous message.
NCUA is the equivalent of FDIC. I believe the general view is, if either insurance were to fail (through too many bad loans) it would be FDIC, since big banks take a lot more risks than credit unions. (In hard times, my credit union may get some credit card defaults, but it isn't going to have to write off loans to dictators in 3rd world countries whose new governments say, collect from the dictator not our people.)
The Pentagon CU rate sounds great: my CU is giving 4% and has historically been on the high end. The problem with waiting is, unless rates go up a lot soon, you'll lose more interest waiting than by taking the plunge and seeing rates go up while you're stuck in the lower rate. If you're talking a big lump sum, you might want to do a 1-5 year ladder, then roll over to 5 years as they come due. I don't know that this would get you a better overall return than the lump sum in a 5 year, even if rates go up in the interim, but it will get you liquidity for the long haul, which is important to me as I see needing the money in another 10 years of so. If you are planning on continuing investments in CDs (or bonds, if the rates improve), then you can create an ongoing 5-year ladder and might as well just lump sum now.
I believe the Pentagon CU, like all credit unions, has a restricted membership to be eligible. I believe if you haver served in the military, you would qualify (or worked for the Pentagon in some capacity). They've been lossening CU eligibility requirements in recent years, so there may be other ways in—we got my in-laws into our credit union because they were related to a CU member.
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