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Registered: ‎08-16-2007
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Re: Do I have a problem? ;)

I believe you can also add funds to an already existing CD once during the term. Might be easier than opening new ones all the time. I would love to be your banking rep, if I were a banker, lol they get points for every new account usually. :-)

Personal credit is good. Working on business credit now.
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Registered: ‎02-09-2012
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Re: Do I have a problem? ;)

I think this is where the "laddering" she mentioned, comes into play.

 

I'm certainly going to play around w/ these things over the course of this year, as I have money tha goes to USAA bi-weekly, and just sits there in checking and savings, gaining next to nothing.  Same for BOA, and same for a local CU.

 

The % I get out of these CDs and having some fun "laddering", may make it worth it in the long run.

 

I'll try different amounts at different maturity dates.  I'm certainly going to be placing my EF into a 91 day CD (I have cash on hand, here at the house) just to see how it goes.

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Registered: ‎08-13-2009
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Re: Do I have a problem? ;)

Hold_the_cheese_plz - for you game of CD bingo, decide often you would like a CD to mature.  One of my goals is to have one mature every week.  So the first year, I purchase one every two weeks and let them roll over.   The second year, I purchase on every two weeks.  It's not an exact science, but in year three, I should have an average of four CD's maturing each month.  

 

With the CD's at Navy, I can add to them at any time, any amount.  Once I get to year three, instead of opening up new ones, I will be adding to the existing CD's.  All Navy CD's are one year.

 

With USAA CD's, I can add in increments of $25.   For the kids, I add money once or twice a year for bdays/holidays.   Those just keep rolling over until high school or college graduation.   With mine, I add when I can and keep it for emergencies.   The kids CD's are for one year.   Mine is usually for 6 months.

 

With Ally CD's, the goal is one per month.   I can do any amount of money and plan to let them roll over.   I can't add to them, but I can bump up the rate twice during the four year term.  All Ally CD's are 4 yr terms.

 

The overall goal is to have CD's maturing every week and to have (initially) 10k a year maturing.   Then 15k a year maturing.  Then 20k a year maturing, etc.

 

I will probably schedule a few big ones/or a set amount to mature and cash out at retirement.  I will probably have several months of no income as I transistion to a retired person receiving a pension.

 

And it IS fun for us to play CD bingo.  :smileyhappy:   

 

Repo-ed - Play with your goals first.   Do you want to have a CD mature the 1st of every month?  Or have x amount mature each month? Mine started with let me do something for the kids graduations.  So the amount was what I had been putting into savings.  Once I had them established, then I focused on me.   Then it became a "ohhh!  I gotta get that 3% rate at Navy!!"   Once that was done, then it became I absolutely MUST purchase one CD per paycheck no matter what.    Once I was pretty consistent with that, I noticed the grand total growing in my chart...  Then I was driven to make sure I had 10k that was rolling over each year...and it grew from there.

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Re: Do I have a problem? ;)

I'm there w/ you. I created my two sheets and my first deposit cleared this morning and my 2nd CD depo will come through on the 17th, at which point, I'll open my 3rd. I'm going for large one, right out of the gate through USAA.  It will be my EF and will try the 91 day first, then go from there.  Being sure to keep cash on hand at the house, as a just in case.

 

You've really got me excited here!  I have money going to a couple of different accounts every week and they do little to nothing for me.  I'll take a little more or not-much any day.

 

5/2012: 560 credit scores across the board and $500 secured CC
12/2014: 750+ scores across the board and $80k in revolving credit

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Valued Contributor
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Registered: ‎09-01-2011
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Re: Do I have a problem? ;)

How much do you get hit for in taxes having all these accounts?



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Contributor
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Registered: ‎08-20-2011
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Re: Do I have a problem? ;)

Actually the better thing to do, if you're putting your EF in CDs, is to ladder them, or stagger them out, instead of putting them all in at once.  If you're going to do it all at once and don't care about pentalties from withdrawal, might as well go for a 5 or 7 year CD.

 

Example:  Divide your funds by 4.  Every month, put 1/4 of it in to a 3 month CD.  This way you always have 1/4 available in cash, and get 1/4 available each month.  Or, if your fund is bigger, do the same but using 6 month CDs.

 

 

 

I'm currently keeping 1 month worth of expenses in savings, then buying a 6 month CD at the start of each month.  Better rates than keeping it all in savings, but a months worth of expense coming avaible each month if / when needed.

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Re: Do I have a problem? ;)


Linuss wrote:

Actually the better thing to do, if you're putting your EF in CDs, is to ladder them, or stagger them out, instead of putting them all in at once.  If you're going to do it all at once and don't care about pentalties from withdrawal, might as well go for a 5 or 7 year CD.

 

Example:  Divide your funds by 4.  Every month, put 1/4 of it in to a 3 month CD.  This way you always have 1/4 available in cash, and get 1/4 available each month.  Or, if your fund is bigger, do the same but using 6 month CDs.

 

 

 

I'm currently keeping 1 month worth of expenses in savings, then buying a 6 month CD at the start of each month.  Better rates than keeping it all in savings, but a months worth of expense coming avaible each month if / when needed.


Good strategy.

 

I'm nervous as heck to lock my EF into a 91 day.  Thankfully I've never had to dip into it for an emergency, and with my luck, that time would come now, haha.


Ug, just need to suck it up, and put that money to work.

5/2012: 560 credit scores across the board and $500 secured CC
12/2014: 750+ scores across the board and $80k in revolving credit

Get those baddies removed!!!
Valued Contributor
Posts: 2,698
Registered: ‎08-13-2009
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Re: Do I have a problem? ;)

Repo-ed - I can understnad being nervous about putting the money into a CD.   The idea to divide it up into 4 parts and invest at 4 different times is a great option!

 

Someone had asked about income taxes.   Yes, I do have to include the interest earned on my taxes.   It's not that bad.  The amount of interest I earn each month varies (increases), but I don't think it bumps me into the next tax bracket.   YET.   That day may come.  And there's something really cool about seeing the amount earned add up each month.   :smileyhappy:

 

This was really cool.    I have the opportunity to buy a very, very distressed property for 23k.  DH and talked about how to pay for it.  Two really cool things happened.

 

1.  I have more than 16k in CD's.  The thought of cashing them out for buying this distressed property never came up.  :smileyhappy:

2.  DH told the realtor that we must absolutely pay CASH for the property.  He's called two days in a row trying to close the deal.   DH told him that the earliest we could make a verbal commitment was Tuesday - when the banks are open.  :smileyhappy:   Why?   To give us time to think about it.  Can we say zero percent loan?  Worse case scenario, 2% loan.

 

Anyways, once the CD"s every payday become a habit, you probably won't even think of cashing out the CD's for things that come up.

Valued Contributor
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Registered: ‎08-13-2009
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Re: Do I have a problem? ;)

PS - Remember I said the goal was for 10k to mature in a year, then bump that up to 15K, 20k, etc?

 

2012 - almost 12k maturing

2013 - 15 k maturing

2014 - 20k maturing

 

Just let everything keep rolling over...

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Registered: ‎02-09-2012
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Re: Do I have a problem? ;)


IOBA wrote:

Repo-ed - I can understnad being nervous about putting the money into a CD.   The idea to divide it up into 4 parts and invest at 4 different times is a great option!

 



I may need you to go over this part, one-more-time.  4 different parts; 4 different times.

 

(I accidentally (or not) opened another today, thinking I could future date it for next pay period.  Whoops.

 

Do they send you those info packet mailers with EVERY CD you open?

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