It seems Pentagon Federal Credit Union runs the fire sale of year each December. This year it’s 5 year certificates @ 3% APR. I’ve never gotten in on the action before, but this year I was feeling a little saucy and jumped in on the action.
I was feeling a little excited that for some odd reason the US government increased the fix interest rate component for Ibonds from 0% to 0.2%. This is a big deal, but it still leaves the composite rate at 1.38%. I’m still probably in for at least $10k of Ibonds sometime before May 1, 2014. Ally has a 5 yr CD @ 1.59%. One of my other credit unions has a 5 yr CD @ 1.75%. Either way, none touch 3% right now.
PenFed does have an early withdrawal penalty on their 5 yr CD of the last 365 days of interest. With the crappy interest rates the last 3 years, I’ve moved a lot of my emergency funds to vehicles which are considered to be less liquid, but don’t increase risk. Turns out, CD’s and Ibonds are more liquid than one would initially think. While Ibonds aren’t redeemable for the 1st year, when you are able to redeem, it is almost instant. I’ve unfortunately had to break some CD’s early as well, and it happens almost as fast as the Ibonds. CD’s and Ibonds (once past a year) are as liquid as a high yield savings account.
I’ve already opened 10 – $1000 CD’s. I’m going for another $10k sometime later this week, and will probably do some $2500 CD’s. Potentially another $20k…
Where do you all keep your emergency fund? And what is your current rate?