The Best Credit Union CD Rates – September 2018
Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case? … Continue reading The Best Credit Union CD Rates – September 2018The post The Best Credit Union CD Rates – September 2018 appeared first on MagnifyMoney.
Posted — UpdatedBest CD rates for credit unions with no cost to join
The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)
Unify Financial Credit Union – 1-Year Share Certificate, 1.75% APY, min. deposit $1,000
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.75%, compared to the national average of 0.92% in June. You would earn $17.50 on a $1,000 deposit. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.
NASA Federal Credit Union – 1-Year Share Certificate, 1.00% APY, min. deposit $1,000
If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.
Best credit union CD rates with restricted memberships or membership fees
Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.
CommunityWide Federal Credit Union – 12 Month CD, 2.50% APY, min. deposit $2,000
Once you’re a member of CommunityWide Federal Credit Union, you can open a 12-month CD with a minimum of $2,000. Their early withdrawal penalty equals the withdrawn amount multiplied by the number of days that remain in the term.
Connexus Credit Union – 12 Month Certificate, 2.50% APY, min. deposit $5,000
With a $5 donation to the Connexus Association, anyone can join Connexus Credit Union. The Connexus Association assists educational institutions by providing scholarships and financial information. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $5,000 deposit.
If you’re able to deposit $5,000 into Connexus’s 12 month CD, you’ll earn $125 by the end of the term. However, if you withdraw funds early, you’ll be penalized with 90 days’ worth of interest.
PenFed Credit Union – 1-Year Money Market Certificate, 2.45% APY, min. deposit $1,000
NCUA Insured
Alliant Credit Union – 12-17 Month Share CD, 2.45% APY, min. deposit $25,000
With a minimum deposit of $1,000, you could earn an APY of 2.45% on a 12-17 month CD. If you deposit $25,000 or more, you would be able to earn an APY of 2.50% with the same term. An early withdrawal penalty of 90 days’ worth of interest may be imposed if you withdraw funds prior to the CD’s maturity date.
With a $10 donation to Foster Care to Success, you can easily become a member of Alliant Credit Union. You can also become a member if you are an employee or retiree of certain organizations, related to existing Alliant members, or live or work in qualifying communities.
USAlliance Financial – 12 Month CD, 2.28% APY, min. deposit $500
Once you’re a member of USAlliance Financial, you can open a 12-month CD with a minimum of $500. Their early withdrawal penalty equals 180 days’ worth of interest earned on the amount you withdraw.
Best CD rates for credit unions with the best mobile apps
By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.
Redstone Federal Credit Union – 12 Month MemberPlus Regular Share Certificate, 2.17% APY, min. deposit $1,000
You can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.
However, if you do qualify for membership, you could earn an APY of 2.17% with a minimum deposit of $1,000. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.
Eastman Credit Union – 1-Year Investment Certificate, 2.00% APY, min. deposit $1,000
Wright-Patt Credit Union – 1-Year Certificate, 1.76% APY, min. deposit $500
Delta Community Credit Union – 1-Year Certificate, 1.25% APY, min. deposit $1,000
3 questions to consider before opening a credit union CD
What is the biggest difference between having a CD with a credit union versus a bank?Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs), as of March 2018. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).
Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.
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