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6 Year Cd At Department Of Commerce Federal Credit Union

Ltssharon
  |     |   472 posts since 2020

6 year cd's are hard to find, and I guess most people aren't really that gun ho for them.

Has anybody else out there bought the 6 year 4.23 percent department of Commerce federal Credit Union 6 year CD? if so, what was your reasoning for buying it? The early withdrawal penalty is 180 days.

Anybody have thoughts about it?

Thank you.

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3


rockies
  |     |   295 posts since 2018
@Ltssharon
I have no direct experience with Department of Commerce FCU (DOCFCU), but I do have some thoughts/feedback. First, Ken made the following comment in a December 5, 2022 DOCFCU post.

"Customer/Member Service
Several recent DA reviews have reported problems with DOCFCU's customer service. Readers had trouble connecting to a CSR, and once connected, the CSRs weren't able to answer important CD questions. Caveat emptor."

Here is the post.
https://www.depositaccounts.com/banks/department-of-commerce-cu/offers/

Additionally, I see DA gives them only a B+ health rating and bauerfinancial.com rates them at only 3 stars (on a 1 to 5 scale) if this is important to you.

Other options:
I am assuming this is in a taxable account...not an IRA. If so, here are a few alternatives.

First National Bank of America offers a 72-Month certificate at 4.40% APY, but early withdrawal penalty is a stiff 540 days on certificates of 48-84 Months. By the way, FNBA also offers an 84-Month certificate at 4.50% APY.
https://www.fnba.com/online-banking/online-cd-rates/

Celtic Bank is offering 4.25% brokered CDs in durations of 6-, 7- and 8-Years on fidelity.com. I assume they are available from other brokers as well. However, these CDs are subject to Blue Sky laws and, therefore, cannot be purchased in Ohio or Texas due to individual securities regulations. This is only an issue if you live in one of these states.

And, lastly, you might consider U.S. Treasurys in the secondary market at durations of 6 years with yields-to-maturity of 4.12% to 4.19%. If you are holding in a taxable account and you pay state/local income tax, the taxable equivalent yield of these may exceed the 4.23% from DOCFCU.

I hope something here is helpful.
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8
Ltssharon
  |     |   472 posts since 2020
very very helpful. I got confused and made a mistake that cost me 600 bucks in the secondary treasury market. Alan helped me, and so now I clearly understand the secondary market.

The article you directed me to was SO SO helpful. Especially the part of no partial withdrawals. I do not care for that at all.
Thank you.
]
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4
betaguy
  |     |   181 posts since 2022
Most banks don't allow partial withdrawals.
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2
Evil_Capitalist
  |     |   157 posts since 2022
Considering where interest rates are headed this summer, I would strongly advise against any long term CD that offers less than 5.25%.

I realize that there are currently no long terms CDs even offering 5.00%, and that is my point. ;o)

Stash your free cash in a HYS and wait till July.
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2
MY2CENTSWORTH
  |     |   440 posts since 2016
Why is July special? What about August and beyond too?
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2
alan1
  |     |   880 posts since 2015
betaguy -- Where did you obtain the information that most banks do not allow partial withdrawals? I've never come across information on this matter. (Full disclosure: I have never looked for information on this matter.)

My experience is quite different, but I've only had CDs at dozens of banks and credit unions (hardly a representative sample).
Thanks.
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3
betaguy
  |     |   181 posts since 2022
my comment was based on hear-say and reading a few CD disclosures (not dozens).
If you say it is not the case, then so be it.
By "partial withdrawals" I'm assuming he meant on early withdrawals (not at maturity).
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2
John19
  |     |   397 posts since 2022
I agree with EvilCapitalist, not the right time for this deal imo. Not a very good bank either.
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2


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