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Market USA FCU Dropped VIP Checking Rate: ...

Tuesday, September 6, 2011 - 5:21 PMMarket USA Federal Credit Union - Details
from (4%, $50K) to (3%, $50K). 

There is no place to hide!

Some account hopping is in the plan.
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
1. Tuesday, September 6, 2011 - 7:57 PM
51hh--you seem to have a number of these RCAs.  Just curious--what is your threshold for determining if they are worth keeping?  I have 2 myself, both have recently dropped their rates significantly; hardly seems worth keeping.  Thanks for the feedback.
larkinlarkin65 posts since
Jun 18, 2010
Rep Points: 295
2. Tuesday, September 6, 2011 - 9:03 PM
Hi Larkin,

My threshold is time-varying; was 5%, then 4%, now 3%... I doubt that I will stoop lower; i.e., below 3%.  It is just not worth the RCA effort for anything below 3%.  The 3% threshod is set due to my HELOC rate at 2.24% (40% of my total RCA fund is from HELOC). 

The reason that I am leaving Market USA at 3% is that I have a few 4% and 3.5% inactive RCAs; so now seems to be a good time to transfer my Market USA fund over there. 

Just my case.  I think most, if not all, RCAs will come back to 3% pretty soon. 



51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
3. Wednesday, September 7, 2011 - 2:26 AM
A yen carry trade model without the FOREX risk.  Assuming you have a 1M HELOC @ 2.24% how does the 1-1.5% average float reasonably compensate you at those "few 4-3.5%" active RCAs when the required min monthly transactions per institution is 10-12 with less than an avg 50k balance cap?  20 RCAs - 240 monthly transactions - max 10k annual gain.  Sounds more like a frenetic accounting nightmare or a gymnastic feat of transactional swiftness and grace than a cogent investment strategy.  Is the HELOC rate indexed or is it fixed as plunging deposit rates squeeze the model into fractional insignificance/obscurity/extinction?
CraigPDCraigPD94 posts since
Jun 12, 2010
Rep Points: 336
4. Wednesday, September 7, 2011 - 7:09 AM
Craig: Luckily I do not have $1M HELOC to juggle with:D
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
5. Wednesday, September 7, 2011 - 8:40 AM
I have 12 RCA's with 280K in them. I average 4.24% interest with them requiring 136 debits, combined. The debits for me are no big deal to make.

While I miss the 6% RCA days, I still have 2 accounts that are at 5.01% and 2 at 4.51%. Who knows how much longer they will last, but for now they are great to have. while the nearly $1000 per month in interest is not as nice as the $1300 of just less than a year ago. it beats the $1400 PER YEAR that the big banks are paying (.5%).

Seems to me that given today's market that 3% is better than one can get anywhere else, and maintain liquidity. I think the same argument can be made for 2 to 2 1/2 %.

So, for now, I just try to get the most I can.
pdxmalepdxmale91 posts since
Jul 11, 2010
Rep Points: 271