Dedicated to Deposits: Deals, Data, and Discussion

Survey of High Yield Stimulus CDs

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I've seen several credit unions offering certificate of deposit promotions tied to the IRS stimulus tax rebate checks. Instead of having multiple posts on all of these, I thought I would just have this one post. If you've seen others that I've missed, please leave a comment.

Many of these special CDs have high yields, but they all have a small maximum deposit. The typical limit seems to be $1,200. This low maximum is the reason why I haven't reported on too many of these. But if you have a small balance, and the bank or credit union is conveniently located, the deal may be worthwhile.

To measure the value of one of these CDs, I compare it against a comparable online savings account. For today's rate environment, I'll use 3% APY as a respectable yield. I then compute how much extra someone would earn in one of these CDs compared to the savings account. Here's an example.

Assume a 5% special 3-mo CD with a maximum deposit of $1,000. Here's how I compute its value:

Interest rate advantage = 0.05 - 0.03
= 0.02
Extra earnings for 1yr = $1,000 * 0.02
= $20
Extra earning for the
specific CD term = (3mo/12mo) * $20
= $5

In the above example, you'll only earn $5 over what you would have earned if you had just kept the money in a 3% account for those 3 months. As you can see with a low maximum deposit and a short term, this kind of special CD could be more trouble than it's worth. With this in mind, below is a list of some promotional stimulus CDs that I've been able to find. All yields are based on APY. The extra amount is based on what I described above. If you've seen others, please leave a comment.
  • 20% 6-Month Max $600 (extra $51) at Meridian Trust FCU. Membership open to those who live in parts of Wyoming.
  • 9.00% 9-Month $2K Max (extra $90) at Elevations CU. Scheduled to end on 5/30. Located in Colorado. See my post regarding eligibility.
  • 5% 12-mo $3K Max (extra $60) at Mission FCU. Membership available to those who live or work in San Diego.
  • 5.09% 10-month $1.2K Max (extra $21) at Wings Financial CU. Membership limited to those involved in airline industry.
  • 5.70% 7-Month $1.2K max (extra $19) at SecurityPlus FCU. Membership open to those who live in Baltimore. Credit to this FW thread
  • 4.00% 7-Month ? Max (extra ?) at North Star Community CU. Membership open to those who live in parts of North Dakota
  • 4.25% 18-Month $1.2 Max (extra $22.5) at Erie FCU. Contact credit union for membership info.
  • 10.00% 12-Month $600 Max (extra $42) at Keys FCU. Membership open to those who live in the Florida Keys.
  • 5.00% 5-Month $1.5 Max (extra $12.5) at Tucson Old Pueblo CU. Membership open to those who live in parts of Tucson.
  • 5.50% 5-Month $1.2K Max (extra $12.5) at Partners 1st FCU. Membership open to those who live in parts of IN, VA, KY and MD.
  • 7.00% 12-Month $1K Max (extra $40) at Patelco CU. It's a long offered new-member special rather than a stimulus CD, but it's better than many of the offers above and it allows easy membership (see post).
  • 7.50% 12-Month $1K Max (extra $45) at Meriwest CU. This is also a new-member special rather than a stimulus CD (see post)

Thanks to the readers who mentioned some of these special CDs in the comments.

Updated 5/20/08: Added Meridian Trust FCU and Elevations CU to the list.
  Tags: CD rates

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Comments
Comment #1 by Anonymous posted on
Anonymous
Good way to handle this, without cluttering up the rest of the board. I like how you described the yield in terms of $.

1