6.25% 24-Month Flex CD Available Until Nov 17th at United Services
Nov 7, 2006 - 8:00 PM by Ken Tumin
As clearly stated on the home page at United Services Credit Union, you have until November 17th to take advantage of their Flex CDs. The best deal is the 6.25% APY 24-month Flex CD. There's also a 6.00% APY 12-month Flex CD. According to the credit union's description, the 12 and 24-month Flex CD's have a minimum deposit of $2,500. You can add additional money during the term and/or make one penalty-free withdrawal.
Several readers had reported being told these CD's had ended. But with the bold notice on the home page, it seems the credit union has made the official decision to extend them until the 17th. Hope this means the rates will also remain the same until the 17th.
Several readers have also been told by the credit union that all retirees are eligible to join, not just retirees from the employers listed on their field of membership page.
Please see my previous post for more information on these CDs, the credit union and the eligibility requirements. One thing to note is that United Services is a small credit union, so it may have trouble maintaining this promotion if demand is large.
Special thanks to the several readers who have provided their experiences with United Services.
Several readers had reported being told these CD's had ended. But with the bold notice on the home page, it seems the credit union has made the official decision to extend them until the 17th. Hope this means the rates will also remain the same until the 17th.
Several readers have also been told by the credit union that all retirees are eligible to join, not just retirees from the employers listed on their field of membership page.
Please see my previous post for more information on these CDs, the credit union and the eligibility requirements. One thing to note is that United Services is a small credit union, so it may have trouble maintaining this promotion if demand is large.
Special thanks to the several readers who have provided their experiences with United Services.
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Anonymous - #1, Wednesday, November 8, 2006 - 10:46 AM
They require a federal tax form showing that you are retired. Or they let you join a small organization (I forgot the name) for extra $25 nonrefundable fee.
They also need your signiture NOTARIZED on your application form.
Anonymous - #2, Wednesday, November 8, 2006 - 9:06 PM
My set-up experience here has been excellent. French Broad Food Coop can be joined for $25 to make you eligible if you aren't a retiree. I waited at the SS Admin for 2 hours to get the letter confirming my SS benefits, which eliminated the need for a $25 French Broad membership. They also need a copy of SS card and driver's license, & notarized signature cards for savings account and CD. Savings Account must keep $25 minimum balance & $5 is a non-refundable set-up fee (so send this $30). Dividends will be paid into the savings account every month. There is no online service, but you can email instructions to move the interest back into the CD to earn at 6.25%. Any other money added to the CD anytime, is also earning at 6.25%.
Anonymous - #3, Friday, November 10, 2006 - 11:14 PM
Most often it is the APY of a CD that matters. The nominal/advertised APY here is 6.25%, which is pretty good for a two year instrument with a $100K maximum. But this is one of those unusual cases where it is the APR which should be your focus and not the APY. The APR of this two year Flex CD is 6.25%! If you have less than $100K available to invest, the manual compounding option is fine and will provide you a circa 6.42% APY. If you have $100K in the CD, elect their "monthly interest check" option. You can then reinvest the interest easily at circa 5.25+% in a MM account. Your overall APY with this method will be only a few basis points below the aforementioned 6.42%. Whichever aproach you take, your APY will be north of 6.25%.
Banking Guy (anonymous) - #4, Saturday, November 11, 2006 - 2:38 PM
Thanks everyone for the additional info.
That's a good point about the APR. I'm not sure why they don't list the APY as 6.42%? Is the "monthly interest check" option considered to be the default?
Anonymous - #5, Saturday, November 11, 2006 - 3:56 PM
The reason they advertise a 6.25% APY is that a higher APY requires account owner intervention to obtain. As an earlier poster correctly pointed out, you MAY move interest back into the CD at your option. But United Services will NOT perform this transfer for you automatically each month. You must intervene and request, each month, to move interest back into the CD. This is what I meant by "manual compounding". Also, the monthly interest check option is not the default. The default is for them to deposit interest each month into a share/savings, MM, or checking account, whichever you might open and designate. Since everyone is required to open a share/savings account, it is that account to which interest will be directed unless you specify a different option. United Services deserves high marks for their honesty and forthright representation. While the higher APY can be achieved, it is NOT automatic. If you open the Flex CD and then take no further action, your APY will be the "as-advertised" rate of 6.25%, equal to the APR.
Anonymous - #6, Saturday, November 11, 2006 - 6:01 PM
Does joining the French Broad Food Coop make you their "employee", which seems to be the requirement for joining the CU? Also, can this be done in a week? The French Broad Food Coop requires you to mail them a check; hence if there is any paperwork on their part and one needs some additional info from them (e.g a #) to apply for CU membership, there is little chance of getting through in a few days. Has anyone tried? If so, please share your experience.
EV
Anonymous - #7, Thursday, November 16, 2006 - 9:44 AM
I asked the CSR on 11/15 if the 6.25% was the rate or yield. The explanation that I was given was that it is both. I'm not sure that makes sense considering compounding. I did not ask how often interest posts or compounds, but I will. Does anyone know? Also, I did not get the impression that there is a $100,000 maximum on this account, but will find out. I'm setting mine up with 2 POD beneficiaries to obtain NCUA coverage up to $200,000.
Anonymous - #8, Thursday, November 16, 2006 - 10:04 AM
ANSWERS: Apparently, the 6.25% rate and yield are the same because the interest is transferred to the required savings account each month. You must maintain a $25 balance in the savings account, but you can go online and transfer the interest back into the CD with each posting. This contadicts the 11/08 posting that said there is no online service. Also, there is not an account maximum. Information as per Sharon at the Old Ft. Ashville branch. She's very knowledgable. Also, my SS is direct deposited and they accepted my Medicare card and copy of the direct deposit statement as proof of retirement, so no need to wait 2 hours at the SS Admin. office.
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