PenFed Cd accounts

[Anonymous]

Hi, I am a very conservative investor who has all retirement savings in CD accounts, and right now I am losing money since the interest rate is like less than 1% in my bank. I see that PenFed has about 3% interest rate and I wold love to rollover my funds, but I am a little uneasy since it is technically not a bank but a mutual fund. I would appreciate any input about their being safe for CD deposits. They are insured but not by FDIC.

[Anonymous]

Anonymous wrote:Hi, I am a very conservative investor who has all retirement savings in CD accounts, and right now I am losing money since the interest rate is like less than 1% in my bank. I see that PenFed has about 3% interest rate and I wold love to rollover my funds, but I am a little uneasy since it is technically not a bank but a mutual fund. I would appreciate any input about their being safe for CD deposits. They are insured but not by FDIC.

Ugh, OP. Seriously? How old are you? That's not smart right?

[Anonymous]

OP, are you already retired? If not, how many years away?

[Anonymous]

You can get that rate (or higher) at multiple banks in a brokered account (Fidelity or Vanguard etc). All of the ones I've ever seen at Fidelity are FDIC insured. Another advantage that might appeal to you would be you can have all your money at the brokerage but still qualify for FDIC insurance amongst multiple banks- ie you can buy 250k from Capital One, another 250k from Ally and so on.

[Anonymous]

Hi OP - I know 1yr CDs are paying ~3%. So if you only use CDs, you should have no problem finding CDs at that rate or slightly higher.
If you are considering a different investment vehicle that is SIPC insured - well I don’t think it’s a CD. It could be a money market fund or some kind of mutual fund. Though I don’t think Penfed offers mutual funds. Oh - but credit unions are federally insured by a different agency then FDIC - which covers banks. That must be what you mean. So yes - credit union offering are indeed insured.

Make sure you keep everything titled in an IRA if you’re moving between banks/credit unions.

[Anonymous]

This is a joke right

[Anonymous]

I don’t think Pen Fed has mutual funds. How old are you, are you still working, and are you sure all your investments are in CD’s? How much do you have saved? I know you are a conservative investor but 100% CD’s is not a good allocation at all. As you can see, you’re losing money due to inflation for one thing.

[Anonymous]

PenFed is a credit union, which is insured by NCUA. They’re the equivalent to FDIC for credit unions. I don’t know why OP is calling it a mutual fund, which has nothing to do with PenFed or CDs.