Anyone contemplating opening a 6% PenFed CD who thinks they have until the end of the month? Wrong!PenFed's website no longer states that rates are good through 10/31. It now reads "Rates are accurate as of 10/9/2007" (today's date). In speaking with a rep this morning, I was informed that the rates are good ONLY through this Friday. I doubt they are going up after that. ;-(Ken
Merde!Is that legal?Anyway, thanks for the warning. Was planning on October paycheck, but I guess this means I don't need to hold off on some purchases until next credit card cycle starts in a few days.
Interesting...I spoke with one of their reps several days ago and she told me that while the offer was subject to change at a moment's notice, it was unlikely to be dropped until the end of the month since the committee/board which decides on the rates isn't going to meet again till next month. We'll see...
the committee/board which decides on the rates isn't going to meet again till next month.Perhaps they called an emergency meeting. ("Emergency! We're getting flooded with millions of dollars!") :)Well, if the rep who told me that this morning was wrong, she cost me $15 (I had to wire the money in).Ken
Perhaps they called an emergency meeting. ("Emergency! We're getting flooded with millions of dollars!") :)I think Pen Fed is very interesting from a supply and demand perspective that actually sheds light on the liquidity crisis and supports my theory that the finance industry should have its margins squeezed to the bone, which is why the hedgies and big investment banks, trying to get huge gains that make no sense in the market, become loan sharks.I think my local CU, for a big university, has a reasonable mix of borrowers and savers, and manages to keep most of its members savings at home by offering top tier, but not fire sale, CD rates.I think Pen Fed does not have enough savers among its legitimate members (armed forces, Pentagon employees, vets who joined while in the service). So they have actively sought people like us to get enough savings to provide loans to their legitimate members. I don't think they have a choice. However, those of us who only use Pen Fed to get fire sale rates won't put money into Pen Fed except when they have rates above, preferably well above, what we can get elsewhere. I would think their committee of rate deciders has a very tough job. They need to attract enough money to cover their loans. They need the money to come in with cash flow to cover their loans, otherwise they are sitting on January money on which they are earning short term treasury rates (probably), which going to be significantly lower than what they are paying in interest, and they still need to offer loans at attractive rates compared to banks, which should be easy for a big credit union with good cash flow, since they don't have to worry about profit ((just staying even) and paying huge executive salaries.
I called this morning to inquire and Friday is indeed the last day for this round of higher interest rate CD's. Rep told me that they had taken in 110 million in this offer to date so they ended early. I guess they have attracted enough for their purposes.
I called a second time. You guys are right....probably done by Friday. I would've had to take a $20 penalty on a CD that comes due at the end of November in order to fund another one with PenFed. Given the tight situation now, I suppose I'll just wait until January.
Thanks Ken for the warning. I had assumed that I had the whole month to make up my mind. I called this morning and ACH'ed certain amounts for 3,4,5 and 7 yr. Wow, almost missed it.thanks again.LD
Thanks Ken for the warning. I had assumed that I had the whole month to make up my mind. I called this morning and ACH'ed certain amounts for 3,4,5 and 7 yr. Wow, almost missed it.They originaly listed the offer as good through the month. I believe this is the first time, at least while I've been watching, they have changed a fire sale date.Thanks to Ken's alertness (and the general perspective of this board that beleives in sharing timely information), some folks are being able to get in under the wire. (I'm going to get a small amount more, but really wanted to use my end of month paycheck.)We now know that we have to be alert and that it may be better to get fire sale CDs in small lots, instead of waiting for cash flow to get fewer CDs.
Down to 5%. Got in under the wire yesterday, though less than if I could have used October paycheck.Thanks to Ken and the rest of the alertness staff.
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