Dedicated to Deposits: Deals, Data, and Discussion

6.25% 84-Month CD at Navy Federal Credit Union

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Navy Federal Credit Union increased the yield on its 7-year share certificate from 6.00% to 6.25% APY for a minimum deposit of $20K. All other rates seem to have remained the same since my last report in October. The yield for a $1K minimum deposit is 5.75% APY. The same rates apply to the IRA certificates. The early withdrawal penalty for the 7-year CD is up to 1-year of interest.

Perhaps Navy FCU is feeling some competition from Penfed's 6.25% CDs. Penfed still has the better deal with a minimum deposit of only $1K and terms from 3 to 7 years that qualify for the 6.25% APY (see my Penfed post). Navy did have the best CD deal last summer when they were offering an 18-month CD with a yield of 6.25%.

The field of membeship includes all active, reserve and retired Department of the Navy personnel and their familiy members. The membership application is available online. I've been told by readers that if you have some connection with the Navy but you don't seem to qualify based on the website, you should call. The customer service representatives often find more ways that you can qualify.

Branches are located around the US and the world.

Navy Federal is federally insured by the NCUA. It's the largest US credit union. It has over $27 billion in assets and over 2.8 million members.


Comments
19 Comments.
Comment #1 by Max (anonymous) posted on
Max
I just opened this account right now. I was going to open the penfed account for 7 years anyways, but they gave me such a hassle in regards to funding the account that I just gave up on it. If you are a new member at penfed, you can't ACH transfer more than 10k online or over the phone. Even if you speak with a supervisor! I highly recommend Navy Federal over penfed to anyone who was planning on going 7 years with 20k+ and is a new member to penfed (like I was because I just wanted the CD).

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. I wonder why Penfed makes it difficult to fund larger CDs.

Were you able to open the Navy CD online using an ACH transfer?

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Comment #3 by Max (anonymous) posted on
Max
No, it wasn't through an ACH transfer, it was the same system that citibank uses where they write a check on your behalf from your account using your ABA routing number and Account Number. They said it takes anywhere from 48 to 60 hours to receive the payment and open the account. The good thing about that though is this rate was just instated and the board for NAVY FCU only meets once a month (the 17th of the month) so the rate is guaranteed until then. Penfed rates will probably go down at the end of the month I think. Also, there is no limit to the amount you can send NAVY FCU in this manner.

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Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
This looks like one significant advantage that Navy has over Penfed. I hope Penfed will improve their system to make it easy to go above $10K.

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Comment #5 by SVG (anonymous) posted on
SVG
Max,

>>Penfed rates will probably go down at the end of the month I think<<

Yes, a Penfed CSR told me that the rates will be revised by end of the month.

Hopefully another financial institute will come-up with a good rate next month ...

- SVG

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Comment #6 by SVG (anonymous) posted on
SVG
Banking Guy,

Penfed has a way of depositing check from home. Members who are with Penfed for more than 6 months can take advantage of this.

However for folks who are not members and want to open an account, the 10k limit perhaps is a turn-off.


- SVG

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Comment #7 by Anonymous posted on
Anonymous
As a new member of Penfed, I was able to link my GMAC to Penfed share account and ACH over $10K.

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Comment #8 by Anonymous posted on
Anonymous
Bankguy, For the penfed cds, i was wondering if i can just open a share account with ONLY 5 dollars, so that in the future if i need to transfer over 10k there would be no hassle. Is there any fee doing this such as not having an X amount of min? I looked but couldn't find any.

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Comment #9 by Anonymous posted on
Anonymous
Have had NFCU CD's for years. One thing I like about them that Penfed does not do is that you can withdraw any or all the earnings anytime after they have posted to the CD without penalty and without breaking the CD, and without having to have choosen the option to have earnings paid to you instead of accumulating. I like that I can just let it keep accumulating but know I can get to it if I need or wnat to. Can go to NFCU site and see balance and there is a clear notation of the amount of the "dividends available for withdrawal" When I had a CD there that wasn't worth breaking to get a higher rate I simply took the available dividends out and bought higher CD with that.

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Comment #10 by Banking Guy (anonymous) posted on
Banking Guy
SVG, thanks for the info on Penfed. Looks like there are advantages of joining Penfed early so it's easier to fund CDs for the future.

I think someone could join with only a $5 deposit in the savings account without any maintenance fees. I'm not aware of inactivity fees. Note, you still have to be eligible to join (potentially a $20 fee for the association).

About connecting your GMAC account to the Penfed savings account, that sounds like a great idea. Thanks!

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Comment #11 by Anonymous posted on
Anonymous
Hi, guys. Does anyone know if there is a way of becoming a member at NFCU for folks who are not associated with Navy? Penfed has an "easy" membership requirement through sponsorship but I could not find anything like it for NFCU.
Thanks

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Comment #12 by Anonymous posted on
Anonymous
I joined PENFED a couple weeks ago with the $5 fee. Today I am opening the 3yr 6.25% CD for $58,000.,by mailing a personal check with overnight delivery. I was told by the SR that they would probably lower the % rate on 2/1 to perhaps 6% which is still not a bad rate. The SR told me to check tomorrow on the internet to see if my funds are showing on my account. PENFED seems very easy to manage.

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Comment #13 by SVG (anonymous) posted on
SVG
I'm not sure about this approach but perhaps the folks who are hitting 10K limit at Penfed might want to try this.

As I recall the 10K limit is a per day limit. Therefore if you want to transfer something like 20/30K then you might call them on 2/3 successive days and open a certificate of 10K on each day. ... I know its a bother ... but perhaps it might be better than spending time going to Kinkos to do FedEx.

If you want to open Certificate for more than 30k then perhaps you're better off actually spending time to do FedEx.

- SVG

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Comment #14 by SVG (anonymous) posted on
SVG
>>Penfed has an "easy" membership requirement through sponsorship but I could not find anything like it for NFCU.<<

Indeed. Even a foreigner who has SSN can qualify for Penfed membership! On the other hand, NFCU seems to have left no easy way of qualifying for the membership (even for an American).

- SVG

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Comment #15 by Max (anonymous) posted on
Max
You could always live for 1 day with a navy federal member to gain membership so long as you sign up that day. The only requirement is that you are living with that person while you sign up. You don't have to be related to them. Also, once your a member of Navy Federal, it is a lifetime membership, you don't need to maintain any accounts there.

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Comment #16 by Max (anonymous) posted on
Max
By the way, another important thing to note, penfed's rate is actually higher than NFUC's. If you notice Penfeds divident rate is 6.07 and NFCU's is 6.06. After doing some quick math I come out to the following APY's. Penfed: 6.257
NAVYFU: 6.247

So, for NAVYFCU to state that they have 6.25% APY is just as justifiable as Penfed saying they have 6.26%. But then again, if you put in less that $50k, the overnight shipping or wire transfer will probably equal it out so it doesnt matter, but for those who are putting more, it makes a small difference.

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Comment #17 by Banking Guy (anonymous) posted on
Banking Guy
Max, you have a good eye for the details.

About NFCU's membership restrictions, I wonder how NFCU was able to get to be the biggest credit union in the nation.

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Comment #18 by rate freak (anonymous) posted on
rate freak
MANY MANY comments for NFCU.

I agree that the past 6.25% 18 month CD was the best offered of its time. I missed it because it was over 1 year in time. Oh well.

I enlisted in the Navy in 1995. It was harder to join at that time, and was for military members stationed or based overseas only. I was flown over to Japan to catchup with the ship I was assigned to, and took the opportunity to join NFCU over there. Now, it seems to have expanded it's membership base.

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Comment #19 by Anonymous posted on
Anonymous
I am searching for a way to join NFCU. My Navy relatives are died and the CSR says they won't qualify to help me join. Is there any other way to qualify. HELP please.

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