Anyone use ally 5 yr CD's?

Discussion of the Cash portion of the Permanent Portfolio

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Wonk
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Anyone use ally 5 yr CD's?

Post by Wonk » Wed Feb 16, 2011 7:28 pm

Seems like a good place to park cash (2.39%) with only a 60 day penalty for early withdrawl.  FDIC insured and all.  To date I've been happy with Everbank, but this looks appealing for funds I don't expect to tap for at least a year or two.  Any ally customers here?
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moda0306
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Re: Anyone use ally 5 yr CD's?

Post by moda0306 » Wed Feb 16, 2011 7:37 pm

I am.  I am happy, though I haven't had to withdraw my funds in the midst of a financial panic the likes of which would test the reliability of even the FDIC.

All kidding aside, I'm very happy with Ally.  Great rates, easy to use, and they don't screw with you as far as I can tell.  In fact, I almost feel a little guilty doing exactly what you mentioned.  Like I'm cheating or something.

I feel like the guy buying a hammerdrill from home depot knowing he's going to bring it back as soon as he's done with the project.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

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fnord123
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Re: Anyone use ally 5 yr CD's?

Post by fnord123 » Wed Feb 23, 2011 3:19 pm

I've got about half of my cash PP portion in Ally 5 year CDs, , 30% of my cash PP in the Fidelity stable value fund, one PenFed 7 year CD, and the rest in Ibonds and bank savings accounts.  My PP Cash portion is has an overall CAGR of 2.91% as a result of this, which is way better than the 0.1% it would be if I was all in 3-6 month treasuries.

For 2.91%, I'm willing to accept the FDIC risk, that I believe to be minimal.  I think the point when the FDIC fails is the same point when we are in some sort of doomsday scenario when treasuries fail as well - the government would just print money to avert both scenarios imo.
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moda0306
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Re: Anyone use ally 5 yr CD's?

Post by moda0306 » Wed Feb 23, 2011 3:27 pm

What is the redemption penalty on the PenFed 7 year CD.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."

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fnord123
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Re: Anyone use ally 5 yr CD's?

Post by fnord123 » Wed Feb 23, 2011 6:53 pm

12 months, but Penfed's 7 year rate is high enough that after year 2 Penfed is still a better deal. See http://www.depositaccounts.com/blog/201 ... enfed.html.
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Re: Anyone use ally 5 yr CD's?

Post by fnord123 » Wed Feb 23, 2011 6:58 pm

Correction - with newer (smaller) interest rate difference between Ally and Penfed, it takes until year 5 for Penfed to be the better choice. See http://www.depositaccounts.com/blog/201 ... posit.html.
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Lone Wolf
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Re: Anyone use ally 5 yr CD's?

Post by Lone Wolf » Thu Feb 24, 2011 7:46 am

fnord123 wrote: My PP Cash portion is has an overall CAGR of 2.91% as a result of this, which is way better than the 0.1% it would be if I was all in 3-6 month treasuries.
I was just curious as to the breakdown you have here to get a 2.91% overall rate.  That's good in this environment.

Ally CD: 2.4%
PenFed CD: 3.0%
Stable Value Fund: I don't have access to these so I don't know how well they pay.
I-Bonds: CPI-U has been all over the place, but mostly low-ish
Savings Account: 1.2-1.4%?
fnord123
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Re: Anyone use ally 5 yr CD's?

Post by fnord123 » Tue Mar 01, 2011 2:47 pm

I got my Ally and Penfed CDs when the rates were higher than the current #s, that's why I have 2.91%.  Otherwise I think I'd be closer to 2.5% of so.  The Stable Value Fund is around 4% FWIW.
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moda0306
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Re: Anyone use ally 5 yr CD's?

Post by moda0306 » Wed Mar 02, 2011 8:48 am

What is a "stable value fund?"
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Re: Anyone use ally 5 yr CD's?

Post by julian » Thu Mar 03, 2011 8:46 am

The Ally 5 yeard CD is the way to go
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Re: Anyone use ally 5 yr CD's?

Post by fnord123 » Thu Mar 03, 2011 11:15 am

moda0306 wrote:What is a "stable value fund?"
http://www.thestreet.com/story/739812/w ... -fund.html

In a nutshell, it is a privately insured cash-like investment available in some 401k plans. It isn't as safe as FDIC insured instruments or treasuries, but offers a significantly higher return (around 4% for mine). That being said, the additional risk has caused me to reduce my exposure to it - currently around 30% and dropping slowly as I put more cash into other instruments (laddered CDs mostly)
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