Dedicated to Deposits: Deals, Data, and Discussion

4.50% 13-Month Add-On CD at Air Force Federal Credit Union.

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Air Force Federal Credit Union
Update 8/30/08: This CD special is no longer listed at the credit union's website. Please check with the credit union for the latest specials.

Air Force FCU has recently started a special add-on certificate with a yield of 4.50% APY and a 13-month term. The minimum deposit is $5,000. The add-on feature has a few restrictions:
  • Add-On during the term - $25,000 maximum add-on OR the amount of the initial opening balance, whichever is greater
  • Additional deposits of at least $5,000 may be made at any time during the term up to the maximum add-on amount
This CD is also available in an IRA. It can be opened online or at a branch.

This is similar to the special add-on CD that the credit union was offering in June 2007. However, it didn't have any add-on limitations last year.

Field of membership includes all US Armed Forces (either active or retired). There are also a few other select employer groups, but unfortunately, there doesn't seem to be any easy way to join for those without any military affiliation. Please refer to the Air Force FCU eligibility page for the FOM details. Membership requires a minimum balance of $5 in the savings account.

For the credit union's soundness, BauerFinancial gives it a 5-star rating (superior) and Bankrate.com gives it a 2-star rating (below peer group). Both are based on 3/31/08 data. I'm not sure why there's so much difference. This is the biggest difference I've seen between the two rating services. The credit union's financials are available at this NCUA page. From these numbers, I can confirm that it had a net income of -$73K for the first 3 months of the year, and this is mentioned in Bankrate's summary page. I don't know how BauerFinancial justifies a 5-star rating.

Branches are located in San Antonio, Texas. The credit union is federally insured by the NCUA (Charter # 8169).

Thanks to the reader who emailed info on this special CD.

Other High Certificate of Deposit Rates

For those who can't qualify for this credit union, WaMu is still offering a 4.50% APY 13-month CD (both online and at its financial centers). However, it doesn't have an add-on feature (see post). You can also get a similar rate for a 12-month at KeyDirect (see post).

Other high yield CDs are listed in my weekly CD rate summary

  Tags: CD rates, Texas, Air Force Federal Credit Union

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Comments
3 Comments.
Comment #1 by Anonymous posted on
Anonymous
Hi I'm not familiar with the add-on feature. Does the 25K max mean the max amount of the CD (including the initial deposit) is 25K? Say I open with 5K, so my add-on is capped at 20K, am I right? Also, how do they calculate interest? If I make two add-ons during the life of the CD, the final interest will be the sum of three different interest amount arrived at separately? Thanks for any help.

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Comment #2 by Anonymous posted on
Anonymous
Further, instead of making add-ons, can a depositor open the CD with say $30K (exceeding 25K)? Or is this one-time deposit is also capped at 25K? Thanks.

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
I interpret this that the maximum add-on is the greater of either $25,000 or your initial deposit. I don't see any limitations on the balance.

So if your intial deposit is $50,000, you could do a maximum additional deposit of $50,000.

If your initial deposit is $10,000, you could do a maximum additional deposit of $25,000.

For interest, I assume the new add-on deposit would be averaged in with the current money for that month of the deposit. Interest is compounded and paid monthly.

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