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Branches In Florida And Georgia

Rod
  |     |   1 posts since 2016

I was told that State Farm Bank has 2 branches on the East Coast.  One in Florida and one in Georgia.  Is this true?

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Answers
CDInvestor1
  |     |   18 posts since 2015
From my understanding, State Farm Bank is an online bank based out of IL.  I don't know of any stand alone banks, but you can do certain transactions through any State Farm Agent.
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Bozo
  |     |   1,375 posts since 2011
My local State Farm agent handles everything with regards to State Farm Bank. The best thing about State Farm Bank is the agent rate-lock on CDs. Anyone who has anguished over a custodian-to-custodian IRA CD transfer will appreciate. In addition, the agent handles all the paperwork (not a minor benefit, in my opinion).

My agent was quite candid when she told me the Bank was basically a loss-leader for agents. The agents make their money on insurance and annuity products, not Bank deposits.
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lou
  |     |   1,004 posts since 2010
What exactly is an agent rate-lock? Does that mean they will lock the rate until the funds are transferred?
Also, can you get better rates if you go through an agent?
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Bozo
  |     |   1,375 posts since 2011
Two questions. As to the first, yes, the rate is locked on application with the agent. Second question, no. The rate is the rate. The key issue is the ephemeral nature of CD rates these days. A financial institution might advertise a rate of "X", but by the time you actually move the funds (a huge issue in custodian-to-custodian IRA CD transfers), the rate goes "poof". Then, you either accept the rate "when the funds hit" or try to back out of the transaction.
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lou
  |     |   1,004 posts since 2010
Thanks for the answers.

The custodian-to-custodian rules are absurd when they cause savers to lose the CD rate because it takes too long to transfer the money. And now it is even more ridiculous with the new 60-day rollover rule that only allows one rollover for all accounts in a 12-month period. Thanks IRS for making it as hard as possible to comply with your stupid rules.

One of the presidential candidates has proposed to abolish the IRS. Sounds good to me.
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Bozo
  |     |   1,375 posts since 2011
Lou, I don't believe the new rollover rule applies to custodian-to-custodian transfers. As I understand it, in a C-to-C transfer, the account holder never touches the funds. They simply go from "point A" to "point B". By contrast, in a rollover, the check actually goes to you. The sixty-day rule then kicks in, and you get one rollover per 12 months. As a general rule, I have always avoided rollovers. Whenever I have an IRA CD maturing, I either (a) keep it where it is, or (b) do a C-to-C.

Stated another way, I think you can do all the C-to-C transfers you like in a 12 month period without running afoul of the new rule.
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lou
  |     |   1,004 posts since 2010
Bozo, last year after a flawed court decision, the IRS changed the rollover rule to permit only one rollover per 12 months for all your IRA accounts. In the past the one-per-12-month rule applied to each of your IRA accounts, so moving funds as a rollover from bank A to B  did not prohibit a rollover from bank C to D or even a rollover from bank E to B.

Because of the timing problem of custodian transfers, I use to rely on rollovers to ensure that I didn't lose the advertised rate for CDs. Now you are afforded only one opportunity to do that every 12 months. Just another ridiculous rule to make our lives more difficult.
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Bozo
  |     |   1,375 posts since 2011
Lou, I will admit to having zero knowledge of how to use rollovers to rate-lock.  I always have used the "old-fashioned" method. I first note my intention to do a C-to-C transfer of my IRA CD. I then ask if the financial institution is willing to "rate-lock" on application. If not, I either move on or take my chances.

Mind you, it's not like the "wild, wild, west" of a few years ago, but thirty basis points is thirty basis points.

For example, an IRA CD at Alliant (2.2%, five years) compared to an IRA CD at Patelco (2.5%), when applied to the maximum NCUA-insured amount is more than beer money.
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lou
  |     |   1,004 posts since 2010
As an aside, I seem to remember you were purchasing 10-yr CDs at around 6% during the 2007-8 time frame. Was it KeyDirect, which isn't open to new customers anymore. I only remember this because I considered going out ten years but it didn't seem prudent to me at the time. Another great move on my part.
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Bozo
  |     |   1,375 posts since 2011
My goodness, you have a good memory. Thanks to Ken's blog, I "went long" in 2008 and bought a KeyDirect IRA CD at 5.75%. It matures in January of 2018.

I chuckle every year as the CD goes up in value.
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Bozo
  |     |   1,375 posts since 2011
Lou, remember that "return on capital" is seldom as important as "return of capital".
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lou
  |     |   1,004 posts since 2010
Very true!

I bought the 5-yr CD at KeyDirect in Jan of 2008, thinking it made more sense. Well, it matured 2 years ago after which I closed the account with them. I remember reading your rationale for going out ten years and it made a lot of sense to me, but I didn't do it. Congratulations on your foresight!
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lou
  |     |   1,004 posts since 2010
Does Patelco waive the EWP for IRA CD owners who are 59.5-years or older?

I learned from you many years ago that certain credit unions and banks were doing this. Although I have never exercised this option, it's still neat to know it's available if I need to use it.
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lou
  |     |   1,004 posts since 2010
Regarding KeyDirect, I should warn you that pulling the money out of the bank after my CD matured was exceedingly difficult, much more so than any other credit union or bank I have dealt with. I instructed them not to rollover the CD (not an IRA CD) and to transfer the funds to my checking account with them. I can't remember the particulars but I do remember they made it way harder than it should have been.

I also didn't want to close my account with them, but they forced me to close it because of the fees I would have incurred. All in all, a very unpleasant experience
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Bozo
  |     |   1,375 posts since 2011
Re: Patelco and the EWP, I don't think so, but it wouldn't hurt to ask.
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