3.75 Rate Cd Maturing May 2, 2024

Ltssharon | Mar 20, 2023 | 471 posts since 2020

Hi. Half of my money is invested at the credit union Advantis, in a 5 year cd which Matures April 2, 2025. It is earning 0.0375 , so of course I have been happy with it. It is insured ncua with two beneficiaries for 500k. I take the interest out monthly so it has close to the 500 but does not go over it. On this site Advantis has a B plus rating.

Here is my question:Is it time to take it out, pay the big 270 penalty and look for something better for a 5 year cd, or should I let it stay and see what I can get May 2024?

Side note: I also have my IRA there, to the max, at a similar high rate for, yep, you guessed it, until May 22, 2024.

Thanks for your thoughts.

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Answers

JeffinEasternFL | Mar 20, 2023 | 744 posts since 2020

Run the CD calculator that is on this site (and of course consider the small tax advantages well of an EWP), then decide. It's then easy!...if it works you can be getting anywhere from $5.50% at 3 years to 5.05% for 5 years and 5% in between! Just sayin...

Ltssharon | Mar 20, 2023 | 471 posts since 2020

Hi Jeffin. I went to the calculator, and pretended the 3.75 percent cd was five years long. It said in that case, YES, pay the penalty and reinvest at 5.05. I think I will. I had to pretend the 3.75 percent cd was five years in order to "compare what would actually be the result". Thank you. No sense waiting any longer that I can see.

lou | Mar 20, 2023 | 1,004 posts since 2010

It will take roughly 2 yrs and 3 months for you to breakeven if you close the CD and pay the 270 day penalty. You only have 2 more years until maturity. The question is do you want the certainty of knowing what rate you can get for a 5-yr CD now or wait until April of 2025 to find out. I usually don't like to close CDs if the breakeven is longer than 2 yrs but in this case I can see it's a close call. Not sure what I would do.

GH1 | Mar 20, 2023 | 1,053 posts since 2017

yes i agree i have one that if i break and pay. says will make 200 more , same thing is it worth it, 500 yes 800 yes i question 200 but it is more

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