Dedicated to Deposits: Deals, Data, and Discussion

Self-Help Credit Union - CD Rates and a Big Policy Change

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Self-Help Credit Union
Self-Help Credit Union has been offering some attractive CD rates lately. The most competitive rates currently range from 3.75% APY for a 12-month term to 4.76% APY for a 60-month term. The minimum deposit is $500. Below is the full list of rates:

CD Rates as of 6/16/08

Term APY
3-month 2.85%
6-month 3.31%
12-month 3.75%
24-month 4.05%
36-month 4.41%
48-month 4.63%
60-month 4.76%

Membership is open to anyone who pays a $25 one-time fee. $20 of that fee is a contribution to the Center of Community Self-Help (CCSH). The other $5 represents your non-refundable share ownership in the Self-Help Credit Union. Please see the credit union's Account Opening Page and Membership FAQ Page for more details.

Branches are located in Wilson, Laurinburg and Wilmington, North Carolina. Self-Help Credit Union is federally insured by the NCUA (Charter # 66258). It has $302.9 million in assets and 13,203 members.

Big Policy Change

I first reported on Self-Help in 2005 when it was offering very competitive CD rates. The rates seem to be most competitive in a rising rate environment. My last post was a year ago, and their rates haven't been anything special to report since then.

The CDs had a very nice feature of allowing unlimited additional deposits during the term. When I was looking back at their CD overview page, I noticed that they no longer list this add-on feature. When I contacted Self-Help, I was informed that they are ending this add-on feature for both new and existing CDs starting on July 1, 2008. If you currently have a Self-Help CD, I would recommend calling the credit union. It seems like they may make exceptions on a case by case basis. Since this add-on feature was specified in the Truth in Savings disclosure, it would seem to me that it should be guaranteed to last through the CD term just like the rate should be guaranteed.

I'm sure the credit union probably realized that the unlimited add-on feature is very costly in rate environments like we have today. However, there is one CD feature that is heavily in the credit union's favor. That's the early withdrawal penalty. The penalty is half of the interest for the term of the CD. So for a 60-month CD, that's 30 months of interest which is much higher than the typical 6-month interest penalty.

This reminded me of a similar case at United Services Credit Union which happens to also be a North Carolina chartered credit union. It had offered a 2-year CD back in 2006 with a 6.25% APY that included an add-on feature. After a few months into the term, they notified the CD account holders that they were ending the add-on feature. Many readers sought help with credit union regulators on this issue. I'm not sure if they had any luck in forcing the credit union to honor its add-on feature policy.
  Tags: CD rates, Self-Help Credit Union

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Comments
Comment #1 by Anonymous posted on
Anonymous
Banking Guy I am a USCU member. You are spot on with your comments. In addition, I can tell you their president resigned as a result of that debacle. It took them a LONG while to locate a replacement. The new president was named only relatively recently. It's JMHO, but I don't think they will be offering add-on CDs again any time soon. OTOH, in the rising rate environment I see coming, add-on CDs should not be a threat for a bank or for a CU.

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