CD Rates
Credit Union CD Rates:
The table below shows today’s highest yielding CD rates offered from credit unions throughout the country. The majority of these institutions can accept new members from almost every state, however, you may need to open a qualifying checking account or share savings account in conjunction with your membership.
| Credit Union | Term | APY | MIin. Deposit | Details |
|---|---|---|---|---|
| Patelco Credit Union | 1 year CD | 5.00% | $1,000 | *New Member CD Only. Minimum and maximum deposit set at $1,000. Visit patelco.org. |
| Navy Federal Credit Union | 1 year CD | 3.00% | $50 | This is their promotional "Easy Start Certificate." It has a $3,000 maximum deposit amount and you must also have a direct deposit set-up from a NFCU checking account and monthly automatic deposit of at least $15. Contact NFCU at navyfederal.org. |
| Digital Credit Union | 5 year CD | 2.72% | $500 | Not Available in IRA. Contact dcu.org. |
| Wings Financial Credit Union | 5 year CD | 2.50% | $500 | Contact wingsfinancial.com |
| Melrose Credit Union | 3 year CD | 1.91% | $5,000 | This is a share certificate. Contact melrosecu.org |
| Digital Credit Union | 36 - 47 months | 1.76% | $500 | Not Available in IRA. Contact dcu.org. |
| Digital Credit Union | 12-23 months | 1.25% | $500 | Add-on permitted for 12 months terms. Minimum add on $100. Contact DCU.org. |
| Lookheed Federal Credit Union | 1 year 'Bump' CD | 1.25% | $1,000 | *Must have combined loan + savings of at least $20k to earn advertised rate. Rate will be 0.50% lower if requirements aren't met. Visit lfcu.com. |
| Melrose Credit Union | 1 year CD | 1.15% | $5,000 | This is a share certificate. Contact melrosecu.org. |
| Connexus Credit Union | 1 year CD | 1.10% | $10,000 | Must have active checking account. "Xtraordinary Checking Account" providing promotional APY of 2.0%. Contact Connexuscu.org |
What are Bank CDs (certificates of deposit) and Why Invest in Them? –
In today’s troubling savings environment there is a hard case to make for bank deposits. Their current interest rates, or APYs (annual percentage yields), are uncharacteristically low due to a few external factors. The main one being the fact that the Federal Reserve is keeping key rates at near zero levels in an attempt to stimulate borrowing amongst prospective home buyers and small businesses. And because of the direct correlation between loan rates and savings rates, when one is low the other is typically low as well. So now that we have an extremely low interest rate landscape for mortgages, we thus, have a low interest rate climate for savings accouts and bank CDs as well.
So why invest? Despite their rates, consumers have still been flocking to these products as a safe haven for cash they would have otherwise kept as just that – cash. Rather than simply keeping large sums in a checking account, where they will be depreciating at the rate of inflation, a bank CD will at least help hedge against inflation by providing an, albeit rather small, interest rate. So with the stock market in disarray and gold seemingly near it’s peak, risk adverse savers (especially those deciding what to do with money in an IRA) are still relying on bank deposits as a risk free investment.
Why are CD Rates risk free? Bank deposits are federally insured by the FDIC up to $250,000. Therefor, even if your bank happens to go belly up while you hold a deposit with them, the federal government will still pay you your principal WITH accrued interest up to $250,000. This limit was previously set at just $100k before the bank collapse of 2008. It is set to expire in 2012, but will likely get extended.
CD rates – fixed or variable? Interest rates provided on these deposits are fixed rates. When you sign up for a, say 2 year CD, with an advertised interest rate of 2.0% APY, you will incur a fixed 2.0% yield until maturity.
Comparing CD rates – Most people searching for deposit products on the web, would like to know a few things about the prospective product before they commit to it. 1) What is the APY or annual percentage yield? Using our tables above you can compare APY’s of banks from around the country as well as credit unions to make sure your money is maximizing its utility. 2) What, if any, are the minimum deposit requirements? Many banks and credit unions will require you invest a minimum amount to open a CD with them. It usually varies between $0 and $10,000 with some banks offering a higher APY for “jumbo CDs.” A jumbo CD is anything over $100,000. 3) What is the bank’s overall health? Using our table above we have a 5 star health rating figure which can allow you to compare the health of your prospective new bank. Even though your money is FDIC insured, it’s still nice to know your bank is reliable and stable.
