Comments on: What are “No Penalty” CDs?

By: Nickel

Nickel — Sun, 09 Aug 2009 21:31:47 +0000

To those wondering about why CD rates at some banks are lower than checking.savings, I think this is a sign that the banks intend to drop their rates further in the not so distant future.

By: Yvette

Yvette — Sun, 09 Aug 2009 21:14:55 +0000

I didn’t know that how I was buying CDs had a name — CD ladder, but it’s good to know that my thinking isn’t re-creating the wheel. I must be on the right track.

P.S. I too think it’s weird that ING savings and orange electric carry a higher interest rate than its CDs.

By: Dan

Dan — Sun, 09 Aug 2009 20:50:57 +0000

We are holding a large amount of cash for a down payment on a house. We can’t take much risk with this money and we will need it potentially within a few weeks when we find our new place. So we have a bunch of no-penalty CDs with Ally, each holding a few thousand. When we need the money, we simply break all the CDs. Perfect for our situation, of course not for everyone.

By: RB @ RichBy30RetireBy40

RB @ RichBy30RetireBy40 — Sat, 08 Aug 2009 14:56:20 +0000

Are we talking about “option CDs” here? It’s just the same. The “cost” is simply a lower interest rate return for the option of being able to withdraw your money without penalty. The penalty usually is 3-6 months worth of interest.

I used a 1 year option CD earlier this year. I put about $200,000 into it at 2.5%. 3 months later, the stock market was considerably lower, so I took about $50,000 and invested it in the stock market, but I was also nervous, so I took the other $150,000 and locked it up in a 5 yr CD at 4.5%. Ideally, I should have dumped everything in the stock market, but one never knows.

It’s good to have the option of no penalty though!

Best,

RB
RB30RB40

By: Hanna

Hanna — Sat, 08 Aug 2009 03:10:45 +0000

It is a little weird when the cd offer a bit of a less interest rate than just having a savings account..ING Direct for example.

By: Nickel

Nickel — Fri, 07 Aug 2009 19:01:40 +0000

GM: Unfortunately, no.

Here’s the scoop:

“The Notes are presently being offered and sold solely to residents of the states of California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin, West Virginia, and Wyoming, and are not presently being offered or sold to residents of any other state, the District of Columbia, any other territory or possession of the United States, or any foreign country.”

By: GM

GM — Fri, 07 Aug 2009 18:14:40 +0000

Is the Lending Club program offered in all states?