Deal Summary: 3% APY 5-month add-on CD, Maximum deposit $10k.
Navy Federal Credit Union’s (Navy Fed) has come out with another high-rate add-on certificate special. This new one has a 3.00% APY with a term of 5 months. The downside is a maximum balance of only $10k. Thus, if you’re not already a Navy Fed member, this special may not be worth the effort. However, if you’re already a Navy Fed member with enough extra cash sitting in savings or checking accounts, this is easy money. Just log into Navy Fed’s online banking and open the CD with money from one of your Navy Fed checking, savings or money market accounts. If your initial deposit is $10,000, you’ll earn about $125. That’s $83 over what you would earn in a 1% savings account.
The features of this special CD are similar to Navy Fed’s past 17-month and 20-month CD specials. Minimum deposit is $50. It’s not available for IRAs or ESAs. Deposits can be made anytime subject to the maximum balance. Only one special 5-month CD is allowed per member. I was told by a CSR that it’s really a maximum deposit of principal, and not a maximum balance. If you specify the CD to redeposit the interest, the balance (principal plus interest) may exceed $10,000. Only the principal cannot exceed $10,000.
As stated in Navy Fed’s Certificates brochure, the Early Withdrawal Penalty reads as follows:
Certificates with a one-year term or less: Forfeiture of all dividends on the amount withdrawn for 90 days or from the date of purchase or renewal (whichever is less).
Thanks to DA reader, Anon456, for posting on this CD in the DA Forum.ADS3
In February, Navy Fed expanded its field of membership, allowing many more people to join. All veterans of the U.S. Armed Forces are now eligible. In addition, if your immediate family member had ever been in the military (even if they’re now deceased), you are eligible to join. Please refer to my February blog post for more details.
Navy Fed has an online membership application. The application guides you through membership qualifications. The first question asks:
Are you or have you ever been affiliated in any way with the Armed Forces, DoD, Coast Guard or National Guard?
Joining Navy Fed and/or opening Certificates can be done online or at any of 295 branches located in 30 different states, the District of Columbia, and Guam.
Note, there used to be a backdoor to Navy Fed membership through the San Diego Council of the Navy League. However, this ended in May. Joining the Navy League will no longer qualify you for Navy Fed membership.
Credit Union Overview
Navy Federal Credit Union (NCUA Charter # 5536) has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 5.41% (excellent) based on March 31, 2017 data. In the past year, Navy Fed has increased its total deposits by $6.9 billion, an excellent annual growth rate of 13.23%. Please refer to our financial overview of Navy Federal Credit Union for more details.
Navy Federal Credit Union is considered to be the largest credit union in the world. Headquartered in Vienna, Virginia, Navy Federal has grown from its initial seven members in 1933, to over 6.8 million members and assets in excess of $81 billion.
How the Certificates Compare
When compared to the 194 similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide, Navy Fed’s 5-month CD is way out in front for a $10k deposit.
Another alternative to this special CD is an internet savings account. DollarSavingsDirect’s savings account currently has a 1.40% APY. If this rate holds for 5 months, you’ll earn about $58 for a $10k balance. With a $10k initial deposit in this Navy Fed 5-month CD, you’ll earn about $125. That’s $67 more than what you would earn at DollarSavingsDirect (assuming the savings account rate remains at 1.40% APY).
The above rates are accurate as of 7/31/2017.