Boring Cash Alternatives & NFCU Special IRA CD 3% APY

zenbrew

Have been using ETFs such as MINT & NEAR for cash substitutes for years though after this past Monday, I'm not so sure. They have always been fairly stable. At one point Monday, NEAR fell by over 4%. It was down for over several hours by over 2%. Though by the end of the day, things evened out & was only down by about .24%. Not sure what computer algorithm had that jumping like that. Maybe this has happened before though I'm not typically around my computer watching intra-daily pricing.
Fortunately I was already in the process of moving money over to Navy Federal into this IRA CD. It's a 37 month CD with a 3% APY. $50 minimum to open. $150,000 maximum which you can fund at any time in that period. You do have to be a Navy Federal Credit union member. Talking to a representative, their board typically meets at the end of the month & sets their rates in the first week of the month though they can potentially change things at any time. This time period works well for myself & when I'll need the money. Schwab at this time has 3 yr CDs at 1%. It took about a week & a half to transfer assets from Schwab to Navy Federal. The downside- totally boring. No drama.

https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php

Crash

3% sounds good. I was earlier touting NFCU's 3.5% CD, but the amount you're allowed to deposit is small: $3,000.00.

catch22

A view.....

MINT & NEAR, last 3 years.

zenbrew

Crash said:

3% sounds good. I was earlier touting NFCU's 3.5% CD, but the amount you're allowed to deposit is small: $3,000.00.

That was the CD that originally got me to look at & join Navy Federal. Not only is that amount very small but comes with a qualifying requirement of a direct deposit (which I didn't really notice beforehand).

zenbrew

catch22 said:

A view.....

MINT & NEAR, last 3 years.

Thanks. That pretty much looks what I was feeling. Though MINT seems a better choice. I generally like ETFs for cash alternatives as I can access it any time & not worry about short term redemption fees.

Baseball_Fan

Dominion Energy Reliability Investment (DERI)

Dominion Energy Reliability Investment (DERI) is an investment product backed by Dominion Energy. Under this program, Dominion Energy borrows directly from investors and, in return, they receive a competitive floating interest rate and easy access to their money.

pays 2.45%, 2.70% for >$50k

Works like money market, not FDIC, can access/redeem your funds at any time via phone call or writing a check against your funds

online access, can link bank accounts

Best,

Baseball Fan

msf

Corporate money market accounts used to be more common, but many shut down a few years ago. GE Interest Plus was one such account.

Dominion Energy is a holding company rated BBB and these unsecured notes are junior to all notes and other liabilities of its subsidiaries. I'm not suggesting that this account cannot serve a useful purpose; just be aware of the risks.

Here's an old WSJ article (2004) on this type of account:
Corporate Money Funds Offer An Alternative Savings Method
https://www.wsj.com/articles/SB107464416174007045

The reason you might want one is simple: the rate of return can run as high as 2.6%, compared with returns of less than 1% on most similar saving vehicles. ...

These products are well-liked by companies because they help them diversify their lender base ...

Like all things in investing, increased reward is always burdened by an increase in risk -- and corporate money-market accounts aren't any different. On the surface, they're like any other savings account: You can withdraw money whenever you choose, write checks and -- in some cases -- even pay bills online.

But with a corporate money-market account, your savings go toward funding bonds issued by the company -- and therein lies the risk. By taking this route, you're essentially investing in that company's corporate debt. That means you have to be entirely comfortable with one company's ability to pay its bills ...

The best way to determine the risk of a corporate money-market account is to review the company's corporate-debt rating. Corporate-debt ratings describe companies' creditworthiness and are provided by ratings companies such as Standard & Poor's, Moody's Corp. and Fitch Ratings.

DERI Prospectus:
https://www.sec.gov/Archives/edgar/data/715957/000119312519094557/d929220d424b5.htm

Dominion Energy credit ratings:
https://investors.dominionenergy.com/fixed-income/dominion-energy/default.aspx

msf

DERI APRs are now down to 1.75% (under $10K), 1.85% (up to $50K), and 2.00% (over $50K)
https://investors.dominionenergy.com/fixed-income/dominion-energy-reliability-investment/default.aspx

GM Financial Right Notes® are currently paying 2.00%, $500 minimum.
https://www.rightnotes.com/

For something safer, and with a lock on rates, Marcus (Goldman Sachs Bank) is still offering 7 month no penalty CDs ($500 min) at 1.70%.

Marcus just lowered the APY on its savings account from 1.70% to 1.55% today, so the CD rates may not last much longer. They also offer an 11 month no penalty CD at 1.60% and 13 month no penalty CD at 1.50%.
https://www.marcus.com/us/en/savings/no-penalty-cds

To see these rates you have to go to the open CD page. The drop down list of CD terms shows you the rates.
https://www.marcus.com/us/en/savings/new/account-creation?accountType=NPCD&term=7

Other uninsured notes similar to DERI, offered with lower APYs:
Duke Energy PremierNotes® Investments: 1.46% (< $10K), 1.51% (up to $50K), 1.66% (over $50K)
Ford Credit Ford Interest Advantage: 1.46% (< $10K), 1.51% (up to $50K), 1.66% (over $50K)
Ally Financial Demand Notes: 1.16% (< $15K), 1.36% (up to $50K), 1.51% (over $50K)

The Ford page has a link to its rate history, so you can see how rates have been dropping. Though when they first got started in 2017 they were yielding only about 1%.

Crash

zenbrew said:

Have been using ETFs such as MINT & NEAR for cash substitutes for years though after this past Monday, I'm not so sure. They have always been fairly stable. At one point Monday, NEAR fell by over 4%. It was down for over several hours by over 2%. Though by the end of the day, things evened out & was only down by about .24%. Not sure what computer algorithm had that jumping like that. Maybe this has happened before though I'm not typically around my computer watching intra-daily pricing.
Fortunately I was already in the process of moving money over to Navy Federal into this IRA CD. It's a 37 month CD with a 3% APY. $50 minimum to open. $150,000 maximum which you can fund at any time in that period. You do have to be a Navy Federal Credit union member. Talking to a representative, their board typically meets at the end of the month & sets their rates in the first week of the month though they can potentially change things at any time. This time period works well for myself & when I'll need the money. Schwab at this time has 3 yr CDs at 1%. It took about a week & a half to transfer assets from Schwab to Navy Federal. The downside- totally boring. No drama.

https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php

********************************
...Just noticed: the listing which shows each of these two particular "featured" products each carry a footnote. #1 and #2. But the explanation for #2 does not exist, at least it does not exist right THERE, where it might do someone some good.

zenbrew

This is from the NFCU website tonight:
Certificate Special Offers
Rates effective as of: 15 April, 2020 12:01 AM ET
Product Minimum Deposit Term Dividend Rate APY†
Special 37-Month IRA/ESA Certificate1 $50 37 months 2.96% 3.00%
Special EasyStart℠ Certificate2 $50 12 months 3.44% 3.50%

1Limit one Special 37-Month IRA/ESA Certificate per member. This offer, including the stated Annual Percentage Yield (APY), is effective December 6, 2019. Navy Federal reserves the right to end or modify this offer at any time. The Special 37-Month IRA/ESA Certificate has a $50 minimum and a $150,000 maximum balance. Only available for IRA/ESA Certificates. Additional deposits are allowed at any time, subject to the maximum balance. IRA/ESA certificate subject to IRS contribution limits. Penalties apply for early withdrawals from certificates. Other restrictions may apply.

2Limit one Special EasyStart Certificate per member. This offer, including the stated APY, is effective Dec. 10, 2018. Navy Federal reserves the right to end or modify this offer at any time. Penalty for early withdrawal. The Special EasyStart Certificate has a $50 minimum balance and a $3,000 maximum balance. Additional deposits are allowed at any time, subject to the maximum balance. Certificate owner(s) age 18 and older must have Direct Deposit of Net Pay or payroll allotment and a Navy Federal checking account within 90 days of the certificate issue date. If these requirements have not been satisfied by the 90th day, your Special EasyStart Certificate dividend rate will be reduced to the prevailing dividend rate of the standard EasyStart Certificate for the remainder of the certificate's term.

https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php

Crash

Ah, thanks. They hid it in a drop-down menu.