Survey of High Yield Stimulus CDs

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