Dedicated to Deposits: Deals, Data, and Discussion

Update on Navy FCU - Money Market Account, CDs and My Experience Joining

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Navy Federal Credit Union
Unfortunately, Navy Federal Credit Union ended its 6% 15-month CD in April. Their new deal that started in May is a new high rate tier on their Money Market Savings Account. The yield is 5.24% APY for balances over $50K. Rates for balances under $50K range from 3.78% to 4.82% APY. Balances under $2.5K earn no interest. It's also available for an IRA.

Although the 6% CDs are over, they still have very competitive CD rates especially for deposits of $20K and over. These yields range from 5.30% APY for a 1-year term to 5.70% APY for a 7-year term. These same rates are available for an IRA.

Share Certificate Details

The early withdrawal penatly is 90 days of interest for the 12-month CD, 180 days for the terms over 1 year and under 7 years. The 7-year CD has a penalty of 365 days of interest. Note, you don't have to worry about the penalty eating into the principal. For example, if you close a 2-year CD 4 months into the term, you'll just lose the interest earned during those 4 months. Also, the penalty applies only on the amount of the principal withdrawn. If the early withdrawal of principal reduces the balance below the required minimum, the CD will be closed and the penalty will be applied to the entire principal. The grace period when the CD matures (in which you're allowed penalty free withdrawal) is 14 calendar days.

Navy FCU Membership Eligibility

Update 5/29/08: Field of Membership has been expanded to include all US military.

Field of membeship includes all active, reserve and retired Department of the Navy personnel and their family 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. However, unlike Pentagon FCU, there aren't any easy ways to join for those without any Navy connection.

My Experience Joining Navy FCU and Opening a Share Certificate

In April I was able to join Navy FCU to take advantage of the old 6% CD. I was eligible based on my dad's membership. He was in the Navy and receives disability. If you're eligible, I recommend joining before the promos become available so you can quickly take advantage of them. Membership and account access do take some time. In addition to competitive regular CD rates, Navy FCU does seem to have fairly frequent CD deals with very high rates. Last summer they were offering a 6.25% 18-month CD.

Below is the timeline of my experience gaining membership into Navy FCU and opening up a certificate:
  • 4/5/07 (Thursday)- Applied online. Had my dad's access number for the application
  • 4/11/07 (Wednesday)- Received welcome package in the mail. Package included my access number and share savings account number. I was required to fill out and sign the application (many fields were the same as the online application). I mailed this signed application with a check for the share savings account (only $5 is required)
  • 4/18/07 (Wednesday) - I called Navy FCU and was able to confirm the account was opened but the check had not yet posted. I requested online access. They must send the letter by mail with a code before you can get online access. From my GMAC money market account page, I initated a link to my Navy FCU savings account.
  • 4/20/07 (Friday) - I called Navy FCU and received confirmation that the check had been deposited. Also I received the amounts of the GMAC trial deposits. I verified the trial deposits at GMAC to complete the linking process.
  • 4/22/07 (Sunday) - Initiated ACH transfer from my GMAC account into my Navy FCU savings account.
  • 4/23/07 (Monday) - GMAC transfer was deposited in my Navy FCU savings account. Received letter from Navy FCU with the online access code.
  • 4/24/07 (Tuesday) - With the online access code, I was able to log into my Navy FCU account. Opened the CD from the online account by selecting the link "Purchase Share Certificate Form". Funded CD with money from my savings account. Application provided options for dividend distribution (re-deposit, deposit to savings or check). Also, you could add a joint owner. I had to log out and log back in before I could see the CD with the rate in my account summary.
  • 5/4/07 (Friday) - Received Share Certificate Confirmation Notice in the mail. There was nothing to sign, and nothing was required to be sent back.

The applications don't have fields for payable on death (POD) beneficiaries. I contacted Navy FCU about this and they said that they now allow PODs for the savings, checking, money market and share certificates. If a POD is used, there can be no joint owner on the account. You must fill out a POD designation form.

So it took almost 3 weeks to apply and open the CD. I could probably have done this quicker by calling and requesting online access as soon as I received the welcome package. I could have also initiated the trial deposits at GMAC at this time. But I was just quick enough to open the CD before the end of April when the CD special ended.

General Navy FCU information

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.
  Tags: Navy Federal Credit Union, CD rates

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Comments
9 comments.
Comment #1 by Bozo (anonymous) posted on
Bozo
When the Navy Federal Credit Union is worth the hassle (I already belong to Patelco), I will play the "Navy Veteran" card.

For now, it's interesting, but
not tempted.

I'm not going to crawl on my knees
and beg to lend them my money.

Cheers,

Bozo

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Comment #2 by Anonymous posted on
Anonymous
Banking guy, how was it possible to initiate a transfer on Sun. 4/22 from GMAC, and have it deposited in the NAVY by Mon. 4/23?

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Comment #3 by Anonymous posted on
Anonymous
I also got in on the Navy FCU 6% 15 Mo Share Certificate. I had a relative that I used to qualify but it did take some time. Once enrolled I transfered funds from my savings acct by wire and it was almost immediate, if wired by 9am the money was at Navy FCU by noon PST. They extended their rate for an extra month, I believe the rate was for Feb and March. Now I'm using FNBO, their 6% savings is even better because it is liquid. Maybe Navy will come out with an interesting opportunity for us after Sept. 28. So far Money Guy has come through each time my money matures.

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Comment #4 by Anonymous posted on
Anonymous
My experience is that they're better at processing CD purchases in the branches than online. The POD designation is easily accomplished by filling out a 2-ply paper form, such that you get a carbon copy of the designation. They also accept checks to fund the CD purchase, effectively giving you a couple days' float. Like someone said earlier, I just wish they were offering better rates right now.

Also: My local NFCU branch is in an urban location with very limited on-street parking. Fortunately, they offer free garage parking if you show them your membership card. Very customer-friendly.

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Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
About the speed of the transfer from my GMAC account to my Navy FCU account, I was surprised to see it done so fast. I initiated it on Sunday and it showed as being deposited on Monday. I didn't log in to check the deposit until Tuesday so it might not have shown up until late Monday.

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Comment #6 by Anonymous posted on
Anonymous
Banking Guy I was very interested in what you wrote about your dad. My understanding, perhaps wrong, is that past naval service alone does not qualify an individual for membership in NFCU. Career navy retirees qualify, AFAIK, and I assume active duty personnel. Do you agree it was your dad's (navy) service-connected disability that qualified him (assuming he was not a career man)? Or do you think anyone with past navy service, but without the disability and not a career person, could qualify? I have spoken with NFCU in the past, and it was tough going. Maybe they have loosened up just a little, re membership I mean. I'd love to find a way in.

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Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
In the online application, if you select military, the next page has Membership Eligibility Category. From this field you can select the following:

Navy/Marine Active Duty Personnel
Navy/Marine Officer Candidates
NROTC
Navy/Marine Corps Reservists
Navy/Marine Corps Retirees
Navy/Marine Corps receiving disability
Army/Air Force Active Duty at a Navy Facility
Coast Guard Active Duty at a Navy Facility

My dad received a medical discharge while he was in the Navy and continues to receive disability. This allowed him to qualify.

I was definitely fortunate to be able to join. Good luck in finding a way.

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Comment #8 by Anonymous posted on
Anonymous
Thank you, Banking Guy. That explains how your dad won entry. I did not know about the special provision for those receiving disability. If I find a way in I will report back. Please, do not hold your breath.

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Comment #9 by Anonymous posted on
Anonymous
I have been on active duty in the Marine Corps. for over five years and banking with NFCU. While all in all they may have some great rates on CDs and so on you may want to do some heavy research before switching entirely to this bank. Especially if you do most of your balancing/transfers with online access. I even use a register to back up all my purchases and my balances are always displayed late/wrong. Thought maybe it was just me but soon found by asking around at the barracks I work in that it has happened frequently to others as well. Even checked with my local branch and was told, "...oh it should be right in a couple days.". So I guess in the mean-time I'll just sit here and wait for my banking institution's online access to "catch-up". Constantly delayed accurate balance displays with sometimes innaccurate displays altogether can lead to some active-duty junior personnel finding themselves in a overdraft fee bonanza. Especially the ones without any real experience banking or even something as simple as classes on how to balance their register. Just a little advice to the younger active-duty crowd. So as far as regular banking and checking is involved. Be prepared to always have a couple hundred dollars in your accounts held hostage.

Thanks for the detailed Post Banking guy

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