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Consolidate Multiple Iras At Different Fis After The Cds Mature, Or Not?

senda
  |     |   126 posts since 2015

I have IRA CDs at multiple various CUs that will be maturing in the coming 1-3 years. (I think I have IRA CDs at 4 different CUs). One of the CUs is Navy (which allows you to Add On to their IRA CDs between Jan 1 - April 15 each year).

Question:

(1) When the IRA CDs at the other CUs start maturing -- assuming there are no current "specials" at those places (probably not) -- is it better to simply renew at the various CUs at whatever rate they have and keep them in 4 different places, or to close out the IRA accounts as they mature and transfer them all into one place (like Navy).

(2) None of the CUs I have them at have yearly IRA fees, but don't a lot of places charge when you close out your IRA accounts? Like $25-$50 usually?

(3) Does anyone know: For NavyFed, usually you can only add on to IRA CDs from Jan 1 to April 15th of each year, but is that time restriction only for NEW yearly contributions to the IRAs, or for rollovers as well? In other words, if I had an IRA CD at another CU mature in (say) August, could I do a transfer of funds into an existing NavyFed IRA CD in August, or must I wait until Jan-April?

Just wondering what everyone's thoughts are. I opened up IRA CDs at multiple places because they were 3% CDs (and at least one of them other than Navy also allows adding onto them). But that means that I now have scattered IRA CDs at 4 different places (not so bad for non-IRA stuff, but more of a headache for IRA funds). As far as totals, if I were to combine them all, the total would still be way, way under the NCUA insurance limit. Just wondering what I should do as they start maturing over the next 1-3 years.

Thoughts?

Thanks!

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Choice
  |     |   937 posts since 2020
I planned all my IRAs to mature in spring knowing the NFCU rules of (IRA) engagement in order to transfer in their window of opportunity…ie applies to new contributions and…. I recently negotiated a cost free transfer of an IRA (remember the transferor wants to remove higher rate CDs from its balance sheet, too!) before maturity to NFCU…went very nicely …before tax due date!  The “killer” is the lack of diversity …the price one pays for rates!  I recommend one has an exit strategy or what do I do next?  Downside of zero rates is not nice but one needs to plan for the full landscape of possibilities 
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senda
  |     |   126 posts since 2015
NavyFed Update: So with NavyFed you can Add On to any NavyFed IRA CD between Jan 1 - April 15th. But I just called them to ask if you can add on ANY time (not just Jan-April) if it's a rollover... and their answer was "Only if your IRA CD with us allows Add-Ons at any time". So if one has an IRA CD at another place that matures OUTSIDE of Jan - April and you transfer those funds to NavyFed... if your curreent NavyFed IRA CD allows Add-Ons at any time (some do), then you can immediately transfer it to that NavyFed IRA CD. But if your NavyFed CD does NOT allow Add-Ons at any time, then you'd have to transfer it to a temporary IRA Savings account and wait until Jan-April comes, to move/add it onto the CD with them.

Choice: Interesting that you were able to negotiate an early transfer to get them to Navy during that window...
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Choice
  |     |   937 posts since 2020
Everything is negotiable…rule number 1…never said no to an offer ….
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alan1
  |     |   880 posts since 2015
I would transfer the funds to Navy, unless there's a reason to keep the money at their current locations, or to transfer the funds elsewhere (and there can be a host of reasons to transfer IRA funds elsewhere). But much of that is personal to me, rather than a financial recommendation. A lot of that has to do with my laziness and, additionally, my dislike of having to do IRA trustee-to -trustee transfers. (I agree with you -- they're a "headache".) So it's my preference to reduce the number of places where I have IRAs.

Navy has often had good specials on IRAs. My experience with their customer service is excellent, but I have never done trustee-to-trustee transfers into, or out of, a Navy IRA.

As to fees for closing IRA accounts -- I've known of some banks and credit unions that impose such a fee, but not all that many -- I wouldn't call it "a lot of places". (That may simply reflect my ignorance.) My impression is that the fees are generally in the $20-$50 range.
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111
  |     |   672 posts since 2019
I've ended up with IRAs at 3 different locations, but that's partly because only some of my IRA funds are in CDs while the rest are in stocks, funds or ETFs, so perhaps my experience isn't directly applicable to the question. If I was older and had RMDs to mess with, then I might lean more towards consolidating.

Regarding Navy FCU and IRA CDs - last Fall when I did a trustee-to-trustee transfer from my IRA at Vanguard to my 3.75% IRA add-on CD at Navy, neither charged me a fee. At that time I asked the Navy representative whether, following maturation of the CD in 2022, they would charge me a fee to do another trustee-to-trustee transfer FROM Navy to an IRA with another financial institution - they said, no fee. They also said they would not charge a fee to close my Navy IRA account if I wanted that done. But yes, some FIs do charge fees for these things, so it's not consistent.

I've been able to add both current-year contributions and trustee-to-trustee rollover contributions to my Navy IRA CD, at any time. However, that CD is “natively” an add-on CD, so it is not included in the special period from January to April each year. My understanding is, that period is only for regular NON-add-on IRA CDs, so I don't know if the rules are different.

Finally, note that Navy's natively add-on CDs often have maximum limits - on mine it's $150K (of principal). This thread prompted me to call them to ask whether they would be flexible enough to waive that limit “because of COVID, or anything else going on these days ...”. The answer, as expected, was no. (Oh well.)

I've always found Navy to be competent and easy to deal with.
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me1004
  |     |   1,381 posts since 2010
The answer to your question about consolidating would be an opinionated one. It really comes down to your opinion.

1) As with any setup for CDs, you might want to consolidate them into as few as possible to make it easier to deal with. But, you might want to set them up in tier renewals, at different maturities, so you can have some come due regularly yet still take advantage of higher longer term rates — you would spread them out to a five years term, make them five, have one renew each years over five years.

2) Of course, do consider fees at any place you put them. As for the question of whether there is a close out fee, you would have to ask each institution. But if so, that also would be a consideration overall, as if you make them tiered over five years, and five accounts, that would be five close out fees instead of one.

3) You will get your best and most reliable answer to that from NavyFed.

As for leaving them where they are, I have only rarely gotten best rates at the same place where the CD matures (although coincidentally, I just did in the past five months at three CDs that matured). But, the time involved in moving an IRA can lose you whatever best rate you were targeting at another institution.
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Ally6770
  |     |   4,310 posts since 2010
What I have done at institutions that want to charge to close an IRA is when the CD matures transfer it to an IRA savings at that institution. Then I have the new institution ask for all but a $1 leaving the IRA open. In a few days I will have the new institution request to close the account sending all the money to them. There is not enough money to charge the fee. Actually it was a person working at one of the institutions that told me how to do this to avoid the fee.
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Choice
  |     |   937 posts since 2020
$1 works for me with a couple CUs
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Ally6770
  |     |   4,310 posts since 2010
Some charge for a transfer and for those I have had them make the check out to the new institution for the benefit of my name as a tradition or Roth IRA and have give me the check. Does not count as if I was doing it myself and I mail the check by regular or certified. (this was a local credit union)
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Choice
  |     |   937 posts since 2020
That is a direct transfer! Having the check also provides an opportunity to correct typos! Good reason to also have IRAs at local FIs…same day for delivery. Recent issue was with local branch people at NFCU even though national IRA experts for the Cu are on board with doing it that way, ie the local branch sends check to NFCUVirginia…never have transferor send check!
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