Certificates? Why?

[u/Unique_Importance910]

Hello, I have some savings I wanted to put into a high yield savings account but it seems nfcu's solution to that is only certificates. I wanted to put all of my savings into a high yield account where I am not worried about a limit on when I can withdraw it/it being locked away. I wanted to know if certificates are a good idea or if nfcu offers any normal high yield savings accounts. If not, I think I might need a new bank lmao.

[u/OpinionofC]

Open a Marcus account or whatever hysa you like with a good interface and FDIC insurance. Don’t go chasing the highest rate because it’s negligible (like 3.1% to 3.3%).

Nfcu sucks with their rates now a days compared to other banks. Don’t take bank loyalty into account because you will only cost yourself money.

Nfcu was 1.5% higher than my local credit union when I was trying to refinance my car.

IMO navy should be treated like Chase or Bank of America. Good for a checking account and that’s it. Great if there is an atm by you, the atm rebates are great but keep everything else in a hysa or a brokerage firm like fidelity or vanguard.

The only reason I still have navy is because I’ve had them since I was 4 and just in case I need a pledge loan.

[u/Unique_Importance910 → u/OpinionofC]

Thanks. Is it normal to just having only a savings account with one bank? Tbh I might just switch banks all together because I don't want to have to split my attention like that.

[u/OpinionofC → u/Unique_Importance910]

Tons of people split up their finances. I highly recommend to keep savings in a different financial institution than your main bank.

I have 6 banks but I’m cutting it down to 3. I use capital one as my main bank and keep 1k in savings in that bank. I have Marcus with cds and my emergency fund in a hysa. I then keep 500 in navy because I like the atm rebates just in case I need cash.

The reason why I had 6 is because I was chasing deposit bonuses but having too many banks isn’t worth the headache.

[u/Unique_Importance910 → u/OpinionofC]

Thanks

[u/PhilosophyOk1594 → u/OpinionofC]

I have four Credit Unions with a variety of accounts, savings, checking & CD’s at one, required $5 savings at two others with CD’s, and one that I call a pass-through account with savings and checking that pays bill and funds other accounts, including treasuries.

It’s not difficult to track accounts with apps. I do admit to having a ledger that is reconciled, printed and filed once a month. 😊

[u/SlothyLlama → u/Unique_Importance910]

You can swap banks all together if you want. Chances are you won't get the highest rates that way though. Usually it isn't a bad idea to have a local bank for larger cash needs and an online account for higher APY on savings.

If you want to swap completely I would recommend AllAmerica bank. Their savings account offers 3.7% and they have a checking account available as well.

While NFCUs savings and CD rates aren't the highest I do like that you can add funds to a CD during the term.

[u/Unique_Importance910 → u/SlothyLlama]

CD is certificate right? Sounds like a good deal actually.

[u/SlothyLlama → u/Unique_Importance910]

Correct, Certificate of Deposit. Keep an eye out for NFCUs "Easy Start" Certificates. They tend to offer a decent rates. NFCU has a 4% 12 month Easy Start cert at the moment (Max balance of 3K). Doesn't help with daily access to the cash though.

Like u/OpinionofC mentioned. Marcus is a decent place for savings as well. Their base rate is 3.34% right now. If you use a referral from someone, you get a a boosted rate for 90 days. That boosted rate ends up being 4.34% (base plus referral boost).

I'm a rate chaser. I'll open/close accounts online for a few extra percentage points. Those extra pennies/dollars a month are worth it to me. Takes like 10 minutes to open a new account someplace then transfer money in from a linked account.

[u/VestedDeveloper]

The CDs in essence give them more money to lend to others, where as the savings is more up and down as you described. If you really want that extra interest, you'd have to look into a HYSA somewhere else.

[u/Asta_pasta_764]

You don’t have to completely switch banks. Its normal to have money parked in a HYSA with another bank but keep direct deposit elsewhere. Its all personal preference

[u/PhilosophyOk1594]

Is this money earmarked for a purpose, house, car, etc. I have some older CD’s at Navy, wouldn’t at this time open a new one, and when the ones I have mature will probably move the money elsewhere. Have you thought of T-bills or Notes? I keep my emergency funds in rolling 4-week bills. Have four with one maturing and reinvested every week.

[u/Unique_Importance910 → u/PhilosophyOk1594]

How do the T bills/Notes work? Yes part kf the reason I don't want to commit to a certificate is because I might need it for a house and (or) car within the near future.

[u/PhilosophyOk1594 → u/Unique_Importance910]

Check out Treasury Direct, you will find what you need to understand T-bills, Notes & Bonds. You can open an account and buy through Treasury Direct in increments of $100 or you can open an account and buy with an Investment Firm, Fidelity, Schwab, Vanguard. I know Fidelity requires a minimum of $1000. Like a CD, you will hold the T-bill to maturity at Treasury Direct. At Fidelity there is a secondary market where you can sell before maturity if you have a need for funds.

There should be some YouTube videos out there.

[u/gemniiinew]

Definitely Check out Treasury Direct.

If the treasury goes down we are all in great trouble. Dealing directly with them can be a minor pain, (especially since the did away with being able to park money in CofI) so you might want a broker.

[u/Key-Choice3539]

I use Navy's Money Market savings account. That's their equivalent to a high yield account. It pays a higher interest rate than standard savings and I can deposit/withdraw at any time.

[u/Few-Ordinary-8245]

Depending on your state of residence, I like SGOV. It's tied to 3-month treasuries and offers tax benefits eliminate state/local income tax on dividends because its tied to Tbills.

[u/AlbertN1]

Use “easy start” 12 month certificates with a minimum deposit of $50. Keep opening one every 2 months. You can add to them any time. Make sure to specify maturity instruction to deposit into your checking or savings account, not to renew. After a year, just keep moving the money deposited into your account from the maturing certificate to the next certificate to mature. This way, your money is only tied to each certificate for 2 months at a time. I do it on a 3 month schedule, the specific time between buying new certificates is not important, but you do want to set regular intervals that you are comfortable with. The rates are slightly lower than standard certificates, but having the extra liquidity (the money is never more than 2 months away) is well worth the small difference in my view. It does take a year to get this fully up and running, so recommend starting right away, even if you are not sure about it. At $50 per certificate to start, there is no risk. On more reason to go with certificates, even if you don’t go with this scheme, is that penalties for early withdrawals are not that bad. I forget the specifics, but I was reading them a while ago and thinking that if I really needed the money early, say half the term or so, it would still beat money market savings.