Comments on: Patelco Credit Union’s New Member Certificate: 7.0% APY!

By: BankVibe

BankVibe — Thu, 11 Jun 2009 22:48:15 +0000

Thanks for your input FarmerFrank! As always, your investment experience adds tremendous value to our site!

By: Farmer Frank

Farmer Frank — Thu, 11 Jun 2009 05:49:49 +0000

To Ian:

You can’t in any way go wrong putting a thousand dollars into a 1-year CD at Patelco at 7% interest. Why pass on the 7% based on speculation of what their rates will be a year from now? Remember, $1,000; no more and no less, so we aren’t talking about a great deal of money here. And, what does a 1.50% present day rollover interest rate have to do with a 7% rate, for one year, starting now?

In 12 months you may indeed see much higher interest rates (and can roll it over then). Maybe they’ll be less than 1% and you’ll be glad you spent a year earning 7%! At present, they aren’t promoting rollover rates, only today’s 7% rate, which is a humdinger in my book! In my judgment, future rollover rates aren’t an issue when deciding what to buy (or not buy) today. What matters is the 7%-for-a-year (starting now). When next year BECOMES “today” you can make the decision then. Happy investing!

By: Ian

Ian — Wed, 10 Jun 2009 17:14:14 +0000

I wouldn’t hesitate to pull the trigger on this CD if they had something better than a 1.50% 12 month CD to roll it into after maturity IMO

By: Farmer Frank

Farmer Frank — Wed, 10 Jun 2009 06:07:21 +0000

CORRECTION: I just went to Patelco’s web site and searched the rate tables for reference to the children’s savings program, but found no mention of it. Perhaps they phased it out without much fanfare. My sincerest apologies to the readers for what now appears to be misinformation.

By: Farmer Frank

Farmer Frank — Wed, 10 Jun 2009 05:00:53 +0000

To Seth: No, they didn’t. Their 1-year rollover rates WERE much lower (but had always been), so it seemed in my family’s best interest to redeem the CDs after one year and look elsewhere. We received notices (mail) several weeks before maturity reminding us of the approaching date. Several days after maturity I contacted them (within their grace period) and asked to redeem the CDs. No arguments, persuasion to the contrary, promotional pitches of other products, etc. In less than a week our checks arrived for the redemption amounts of the CDs. And…we’re still on good terms! We couldn’t be more pleased.

To Blogging Banks: If there was a catch, I never found it. I must summarize their dealings with my family as honest, honorable and open. I believe it (7%) is their way of attracting new customers, many of whom will choose to stay on board for the longer term. The extra $40 is just that; the CD is limited to new customers only, with a $1,000 investment, no MORE and no LESS. How can it hurt to park a grand at Patelco for a year? As today’s young folks would say, ‘It’s a no-brainer.’ By the way, folks, they have a great program for younger (children) savers that pays 8%, but I’m not up on the details. Check their web site for the minutiae.

By: Blogging Banks

Blogging Banks — Tue, 09 Jun 2009 13:29:48 +0000

Well there’s always a catch But an extra $40 with the 7% yield is certainly worth it to open a CD at patelco, vs a comparable 1 year CD at 2.5%-3%.

By: Seth

Seth — Tue, 09 Jun 2009 05:39:12 +0000

Farmer Frank,

Did they try to roll over your account into another 1 year CD with a lower rate?

By: Farmer Frank

Farmer Frank — Tue, 09 Jun 2009 05:01:12 +0000

My family bought two of these CDs in May 2008 (curiosity), matured in May 2009, each yielded $1,069 and odd-change. I thought it was a FINE showing for a thousand dollar investment over one year! NO regrets! Thank you, Patelco CU! Had the rollover rates been a bit more attractive, maybe in the 3.00% APY range like Melrose CU, Patelco would still have our money. We need to use our noses to sniff things out and find the best.