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I Closed A Savings Account In A Credit Union In Florida Yesterday.

Ally6770
  |     |   4,310 posts since 2010

She said to check it in a few days to make sure it didn't just have a zero balance but that the account was closed.

Actually when I went into my checking account here in Michigan this morning because I hadn't kept track of the debits on my last trip out of the house during the weekend and the money from the account that I closed yesterday was already credited and available in my account. Not even 24 hours.

This is the place that I closed my Roth IRA early because it needed to be split. It had no penalty and I am actually making a little over $300 a month more now. They said when you are 591/2 and have a Roth there is no penalty. Not sure if this is with all Roth IRA's or just with this particular credit union. I might try it with my other Roths later this week.

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txFish1
  |     |   479 posts since 2023
@Ally just curious are you saying they told you there was no tax penalty on a Roth IRA or there was no EWP for closing the CD early? I am almost certain there is no tax liability on a Roth IRA at all if you are over 59 1/2 and have had it for 5 years but I would think FI's would still charge you for an early termination of a CD but I may be wrong.
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Ally6770
  |     |   4,310 posts since 2010
I was not charged a penalty. They do charge for the closing of the CD early or regular closing.  I was charged $25 for closing the IRA but knew that before I opened the account.  A credit union that I used to have accounts with also charged $25
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txFish1
  |     |   479 posts since 2023
I will have to call EECU here in Texas and see what their policy is on IRA CD's. Thanks
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SouthernGirl
  |     |   210 posts since 2022
Ally6770,
Hello. I believe this particular credit union is Achieva Credit Union. In July 2018, Achieva IRA CD allowed EWP to be waived for traditional and roth CDs for age 59 1/2. On April 20, 2023, Achieva deleted that provision from the Truth in Savings Disclosure which applies to new IRA CDs purchased on or after that date.
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Confused1
  |     |   87 posts since 2018
Ally, are you talking about Achieva CU? I seem to remember they had a very forgiving policy 5 years ago for early withdrawals after 59 1/2 but I'd have to pull my paperwork.
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racecar
  |     |   628 posts since 2014
Ally6770 What CU was it you closed the Roth CD out early without a penalty (other than the $25)?

If it's a Roth CD (as opposed to a non-Roth IRA CD) most places charge an EWP fee to take money out of a Roth IRA CD early (not just the $25 for closing out your IRA account, but an EWP as well). This is because Roths don't have required RMDs like non-Roth IRAs do, so most banks and credit unions treat Roth CDs like normal (non-IRA) CDs, with their standard EWP for getting the funds out early, even if you're over 59.5.

There are only a few places that let depositers over 59.5 take out some or all of their Roth CD funds early without a penalty from the bank/credit union, so I'm curious to know which CU it was.

One is GTE, which allows you 20% EWP-free per year on a Roth CD if over 59.5, and I heard NWFCU allows the whole thing EWP-free if you're over 59.5 and it's a Roth CD you want funds out of before the maturity date (again, this is not tax penalty but a bank penalty, and separate from the fee most places charge for closing out your IRA/Roth IRA at a bank or credit union).
So which CU was it at? Thanks!

PS: Just saw the post from SouthernGirl. So... is that poilcy still in effect, even if it's not in the ToS disclosure anymore?
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SouthernGirl
  |     |   210 posts since 2022
racecar,
I believe policy is still in effect on IRA CDs opened prior to April 20, 2023.
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Ally6770
  |     |   4,310 posts since 2010
SouthernGirl, Is this no penalty for IRA's if you are 591/2 at all credit unions, or just Achieva. Is this also for banks?
I have never cashed a CD or IRA in early in all the years since the 70's. I have had rates raised by asking on existing CD's though at different times.
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SouthernGirl
  |     |   210 posts since 2022
Ally6770,
It is only a select few. Achieva (in the past), NWFCU, Penfed (?), and Grant County State Bank in Indiana. However, you can always ask. I believe Navy FCU will waive it for a distribution. I do not believe Navy FCU will waive it for a direct transfer. So, there may be other FIs that will waive if for a distribution, based on age, prior to RMDS. Interestingly now, Achieva will waive it for required RMDS and disability.
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Ally6770
  |     |   4,310 posts since 2010
Navy once overnighted a check for $5 for us. This was a few years ago. It had to be an IRA. I have purchased my first Non -IRA with them a while back. I try to have a traditional IRA there and will transfer my last one there in Jan when it matures. I always convert some to a Roth in Dec and put it in a Roth IRA saving and then into an existing Roth IRA CD if mine are higher than anything else that they offer the first of the year. I think it was last year the rates went up at one point and they raised the rates of all the IRA's and the reg CD.
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Confused1
  |     |   87 posts since 2018
If it was Achieva I was also able to pull $75K+ in interest penalty free earlier this year.
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Ally6770
  |     |   4,310 posts since 2010
I have posted in the past that it was Achieva. But I wanted to split it because of the size of it. And called them about it and they told me there was a $25 to close it. I knew that when I opened it. I probably should have $1 in it and had that $1 transferred to the Roth savings account when it matured.
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