Picking up Nickels

Friday, January 04, 2008

Lock in CD rates now: FOMC rate cut looms

Today's announcement of the rise in the unemployment rate for December is just the latest indicator that the Federal Reserve will aggressively continue to cut rates when they meet on January 30th.

If you've got any cash hanging around, now is a pretty good time to lock it in at current interest rates while you still can.

Old favorite Penfed is offering decent CD rates for longer terms (5 year 5% APY/7 year 5.25% APY), although these rates aren't as competitive as their January offerings from previous years.

I had a little bit of cash available to lock up for a shorter term, so I decided to bite the bullet and join the Patelco Credit Union since it has switched back to NCUA Federal deposit insurance as of January 1st. Patelco is a solid credit union that has been around since 1936. And although the name sounds like it is derived from the Indian surname Patel, it is actually an acronym for the Pacific Telephone and Telegraph Company, whose employees it was initially formed to serve.

I've already opened a 7% APY 1 year CD ($1k max) and a 5.5% APY 9 month CD at Patelco. These CDs can be funded by mailing a check or electronically via ACH, although I would think twice about funding by check (for more details, please see my comment in the post at the Bank Deals blog).


  • An update on the Patelco 5.5% APY 9 month CD:

    Apparently, the routing and account numbers printed on the checks for Vanguard Brokerage money market accounts are not the ones that should be used for ACH transfers. I did just that when I opened my Patelco 9 month CD last week and my CD was not funded properly.

    After a little research, I did find out that you can generate a Direct Deposit form at vanguard.com (link), which will give you the correct routing and account numbers to use for ACH transfers.

    Hopefully this information will help someone from making the same mistake that I did.

    By Blogger Frugal Frugalson, at 1/11/08, 10:01 AM  

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