When will this stop?

[HLS]

There is desperation in the air…

There are people who are buying T-BILLS at less than 2% return who are well aware of what FDIC institutions are offering.

The Discount Rate is what ELIGIBLE institutions can borrow from the FED at, which is 2.25% this week.

The Fed Funds Rate is what banks lend to each other at, which is currently 2.00%

The 11th District Cost Of Funds Index (COFI) is
the weighted average interest rate paid by 11th Federal Home Loan Bank District (CA,NV,NV) savings institutions for savings and checking accounts. It is currently 3.28%

So, this means that the public is loaning to the higher paying banks who appear to be in some sort of trouble,
because the other banks may not trust them.

If they were ELIGIBLE to borrow from the Federal Reserve or other banks, they sure wouldn’t be offering to pay double that rate because they are generous.

They can never borrow their entire assets from the FED, nor other banks, but if they were solid, they wouldn’t be offering such high rates. They do need a base of consumer deposits, but understand why some are offering MUCH higher rates than others.

When looking at 4.50% instead of 2.50%, it’s not just “2 points” it is 80% more….
Don’t assume that FDIC ins. means ZERO risk…

Although we all expect FDIC to step up to the plate the next business day to offer coverage to a failed bank, this just may not be possible if it is a large bank.

I don’t know what the worst case scenario is,, I suppose that it is paying back the principal over time, without paying any interest on the funds ?

[eagleeye]

My 15-mo 6% NFCU CD matures at the end of July so this is a very interesting topic to me. I also have a 5.5% CD at Countrywide. I plan to move those funds back to NFCU upon maturity next month. Currently NFCU’s jumbo 12-mo CD rate is 3.05%. It kills me when I think about how much less interest I’ll be earning. I will be reinvesting over $500K. I have a great deal of confidence in NFCU so I’m not worried about exceeding the FDIC limits. That being said, if there is an equally safe alternative out there that will return a higher yield I’d love to hear about it. Thanks!

[eagleeye]

My 15-mo 6% NFCU CD matures at the end of July so this is a very interesting topic to me. I also have a 5.5% CD at Countrywide. I plan to move those funds back to NFCU upon maturity next month. Currently NFCU’s jumbo 12-mo CD rate is 3.05%. It kills me when I think about how much less interest I’ll be earning. I will be reinvesting over $500K. I have a great deal of confidence in NFCU so I’m not worried about exceeding the FDIC limits. That being said, if there is an equally safe alternative out there that will return a higher yield I’d love to hear about it. Thanks!

[eagleeye]

My 15-mo 6% NFCU CD matures at the end of July so this is a very interesting topic to me. I also have a 5.5% CD at Countrywide. I plan to move those funds back to NFCU upon maturity next month. Currently NFCU’s jumbo 12-mo CD rate is 3.05%. It kills me when I think about how much less interest I’ll be earning. I will be reinvesting over $500K. I have a great deal of confidence in NFCU so I’m not worried about exceeding the FDIC limits. That being said, if there is an equally safe alternative out there that will return a higher yield I’d love to hear about it. Thanks!

[eagleeye]

My 15-mo 6% NFCU CD matures at the end of July so this is a very interesting topic to me. I also have a 5.5% CD at Countrywide. I plan to move those funds back to NFCU upon maturity next month. Currently NFCU’s jumbo 12-mo CD rate is 3.05%. It kills me when I think about how much less interest I’ll be earning. I will be reinvesting over $500K. I have a great deal of confidence in NFCU so I’m not worried about exceeding the FDIC limits. That being said, if there is an equally safe alternative out there that will return a higher yield I’d love to hear about it. Thanks!

[eagleeye]

My 15-mo 6% NFCU CD matures at the end of July so this is a very interesting topic to me. I also have a 5.5% CD at Countrywide. I plan to move those funds back to NFCU upon maturity next month. Currently NFCU’s jumbo 12-mo CD rate is 3.05%. It kills me when I think about how much less interest I’ll be earning. I will be reinvesting over $500K. I have a great deal of confidence in NFCU so I’m not worried about exceeding the FDIC limits. That being said, if there is an equally safe alternative out there that will return a higher yield I’d love to hear about it. Thanks!

[HLS]

I cannot believe that anyone has a great deal of confidence in an institution…
You are free to do what you want, it’s your money.

Credit Unions are NOT covered by FDIC, they have their own oversight. http://webapps.ncua.gov/ins/

You can probably get closer to 5% for CD’s today fron FDIC insured joints…. just don’t believe that there is NO risk, regardless of what the $10 an hour customer service rep tells you.

The best rates consistently seem to be online, never at a brick & mortar bank.

I wouldn’t even risk the interest above $100K in any one account.

When you realize what is behind the numbers on your statements, just understand that it ISN’T your cash that you deposited.

It’s the “Full Faith AND Credit of the US Govt”

Comforting ?? Good Luck eagle.

[HLS]

I cannot believe that anyone has a great deal of confidence in an institution…
You are free to do what you want, it’s your money.

Credit Unions are NOT covered by FDIC, they have their own oversight. http://webapps.ncua.gov/ins/

You can probably get closer to 5% for CD’s today fron FDIC insured joints…. just don’t believe that there is NO risk, regardless of what the $10 an hour customer service rep tells you.

The best rates consistently seem to be online, never at a brick & mortar bank.

I wouldn’t even risk the interest above $100K in any one account.

When you realize what is behind the numbers on your statements, just understand that it ISN’T your cash that you deposited.

It’s the “Full Faith AND Credit of the US Govt”

Comforting ?? Good Luck eagle.

[HLS]

I cannot believe that anyone has a great deal of confidence in an institution…
You are free to do what you want, it’s your money.

Credit Unions are NOT covered by FDIC, they have their own oversight. http://webapps.ncua.gov/ins/

You can probably get closer to 5% for CD’s today fron FDIC insured joints…. just don’t believe that there is NO risk, regardless of what the $10 an hour customer service rep tells you.

The best rates consistently seem to be online, never at a brick & mortar bank.

I wouldn’t even risk the interest above $100K in any one account.

When you realize what is behind the numbers on your statements, just understand that it ISN’T your cash that you deposited.

It’s the “Full Faith AND Credit of the US Govt”

Comforting ?? Good Luck eagle.

[HLS]

I cannot believe that anyone has a great deal of confidence in an institution…
You are free to do what you want, it’s your money.

Credit Unions are NOT covered by FDIC, they have their own oversight. http://webapps.ncua.gov/ins/

You can probably get closer to 5% for CD’s today fron FDIC insured joints…. just don’t believe that there is NO risk, regardless of what the $10 an hour customer service rep tells you.

The best rates consistently seem to be online, never at a brick & mortar bank.

I wouldn’t even risk the interest above $100K in any one account.

When you realize what is behind the numbers on your statements, just understand that it ISN’T your cash that you deposited.

It’s the “Full Faith AND Credit of the US Govt”

Comforting ?? Good Luck eagle.

[HLS]

I cannot believe that anyone has a great deal of confidence in an institution…
You are free to do what you want, it’s your money.

Credit Unions are NOT covered by FDIC, they have their own oversight. http://webapps.ncua.gov/ins/

You can probably get closer to 5% for CD’s today fron FDIC insured joints…. just don’t believe that there is NO risk, regardless of what the $10 an hour customer service rep tells you.

The best rates consistently seem to be online, never at a brick & mortar bank.

I wouldn’t even risk the interest above $100K in any one account.

When you realize what is behind the numbers on your statements, just understand that it ISN’T your cash that you deposited.

It’s the “Full Faith AND Credit of the US Govt”

Comforting ?? Good Luck eagle.

[eagleeye]

Thanks for the insight HLS. Let me clarify what I mean by complete confidence in NFCU:

“Navy Federal—Strong, Safe and Secure

With 3 million members and $3 billion in reserves, Navy Federal is in sound financial condition, even as we expand our branch and ATM network to serve our growing membership.

Our soundness is based on our exemplary business practices:

We have never engaged in sub-prime mortgage lending
We adhere to sound financial underwriting practices
We provide members with professional guidance, which matches them with the right loan product option
We are regularly audited by PricewaterhouseCoopers LLP, an independent auditing firm

And members can enjoy added peace of mind knowing that their savings are federally insured through the National Credit Union Administration, a U.S. Government Agency. For more about savings insurance, see details at “Your Insured Funds.” (388kb)

Founded in 1933 during the Great Depression to provide its members with an economic safety net, Navy Federal remains a resource members can count on. Surplus funds resulting from our sound lending practices are returned to member-owners through higher dividends, reduced loan rates and service enhancements.”

Maybe I’m naive but that’s good enough for me.

[eagleeye]

Thanks for the insight HLS. Let me clarify what I mean by complete confidence in NFCU:

“Navy Federal—Strong, Safe and Secure

With 3 million members and $3 billion in reserves, Navy Federal is in sound financial condition, even as we expand our branch and ATM network to serve our growing membership.

Our soundness is based on our exemplary business practices:

We have never engaged in sub-prime mortgage lending
We adhere to sound financial underwriting practices
We provide members with professional guidance, which matches them with the right loan product option
We are regularly audited by PricewaterhouseCoopers LLP, an independent auditing firm

And members can enjoy added peace of mind knowing that their savings are federally insured through the National Credit Union Administration, a U.S. Government Agency. For more about savings insurance, see details at “Your Insured Funds.” (388kb)

Founded in 1933 during the Great Depression to provide its members with an economic safety net, Navy Federal remains a resource members can count on. Surplus funds resulting from our sound lending practices are returned to member-owners through higher dividends, reduced loan rates and service enhancements.”

Maybe I’m naive but that’s good enough for me.

[eagleeye]

Thanks for the insight HLS. Let me clarify what I mean by complete confidence in NFCU:

“Navy Federal—Strong, Safe and Secure

With 3 million members and $3 billion in reserves, Navy Federal is in sound financial condition, even as we expand our branch and ATM network to serve our growing membership.

Our soundness is based on our exemplary business practices:

We have never engaged in sub-prime mortgage lending
We adhere to sound financial underwriting practices
We provide members with professional guidance, which matches them with the right loan product option
We are regularly audited by PricewaterhouseCoopers LLP, an independent auditing firm

And members can enjoy added peace of mind knowing that their savings are federally insured through the National Credit Union Administration, a U.S. Government Agency. For more about savings insurance, see details at “Your Insured Funds.” (388kb)

Founded in 1933 during the Great Depression to provide its members with an economic safety net, Navy Federal remains a resource members can count on. Surplus funds resulting from our sound lending practices are returned to member-owners through higher dividends, reduced loan rates and service enhancements.”

Maybe I’m naive but that’s good enough for me.

[eagleeye]

Thanks for the insight HLS. Let me clarify what I mean by complete confidence in NFCU:

“Navy Federal—Strong, Safe and Secure

With 3 million members and $3 billion in reserves, Navy Federal is in sound financial condition, even as we expand our branch and ATM network to serve our growing membership.

Our soundness is based on our exemplary business practices:

We have never engaged in sub-prime mortgage lending
We adhere to sound financial underwriting practices
We provide members with professional guidance, which matches them with the right loan product option
We are regularly audited by PricewaterhouseCoopers LLP, an independent auditing firm

And members can enjoy added peace of mind knowing that their savings are federally insured through the National Credit Union Administration, a U.S. Government Agency. For more about savings insurance, see details at “Your Insured Funds.” (388kb)

Founded in 1933 during the Great Depression to provide its members with an economic safety net, Navy Federal remains a resource members can count on. Surplus funds resulting from our sound lending practices are returned to member-owners through higher dividends, reduced loan rates and service enhancements.”

Maybe I’m naive but that’s good enough for me.

[Author]

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