Dedicated to Deposits: Deals, Data, and Discussion

4.00% 7-Month Add-On CD at America's Credit Union in WA - Easy Membership

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Update 2/14/09: New lower rate Super Bump Flex Certificates have been posted: 2.50% APY 3-month

Update 1/24/09: New lower rate Super Bump Flex Certificates have been posted: 3.25% APY 6-month and 2.75% APY 3-month

Update 12/15/08: The term of the Super Bump Flex CD has changed from 15 to 7 months.

America's Credit Union continues to list a competitive yield on its Super Bump Flex Certificate. It's a 4.00% APY 15-month certificate with a minimum deposit of $500. This rate is shown in the credit union's rate table as of 12/15/08. The 4% APY is nice, but what makes this a very good deal is the add-on feature of the Super Bump Flex certificate. This is described in the Truth-in-Savings disclosure (pdf):
You may make deposits of at least $100 at any time during the term of your Flex Certificate provided the principal balance does not exceed $100,000.

The certificate also has a rate-bump feature, but I doubt this will be useful in the next 15 months.

My last post on this credit union was in early October when it was offering a 5% 24-month Super Bump Flex Certificate. That 5% CD didn't last through October, but this 4% CD continues. The 4% was nothing special, but now with interest rates plummeting, it's a great deal. It can be especially useful if you have CDs maturing in the next few months.

Several readers commented about their experience joining this credit union in my previous post. Here are a few of the useful comments:

Application related comments:

They told me that they would fax me the application. Then they just need that back in mail with a notarized copy of drivers' license and SS card and they require a $50 deposit into a savings account before you can open the cd.

Rate locks moment account is opened. It does NOT lock with a postmark. To be sure of rate you would have to wire funds AND get the application and notarized documents to them.

I live in Portland Oregon, but drove into the most Southern branch of America's Credit Union. If you go into the branch, they waive the fee to join the association. This is something to consider if you are relatively close to a branch. I saved notarizing my documents, FedEx/mailing fees, and I saved the $33 joining fee.

CD features related comments:

The rate is locked in for the term. Any time deposits are made you are still getting the rate the CD was opened. The term does not change with the deposits.

The interest rate hike applies NOT if the interest rates go up in general, but ONLY and ONLY if the credit union opts to raise the rate on THIS specifi product. IF that happens (don't hold your breath) then YOU must find out about it and call them to have them hike it. They will not raise it unless you call them.

Anyone seems to be eligible to join this credit union via membership into an association. Below is an excerpt from the credit union's About Us Page:
We do not have zip code or employment restrictions. Just join the Association of the United States Army. Membership is open to everyone!

Civilian membership into this association costs $33. You can be immediately eligible to join the credit union if you are in the military. Please refer to the About Us Page for the full details.

Branches are located in the Washington State cities of Fort Lewis, DuPont, Olympia, Lakewood, Tacoma, Spanaway and University Place.

America's Credit Union continues to have decent financial ratings for soundness: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both are based on 9/30/08 data. The credit union is federally insured by the NCUA (Charter # 9373).

Related Pages: Bank of Washington, CD rates, America's Credit Union

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Comments
9 Comments.
Comment #1 by Anonymous posted on
Anonymous
America Credit Union's rate page now shows this to be a 7 month flex certificate at 4% APY, not a 15 month certificate.

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
I was afraid it was going to change to today. It had been a 15-month term for the last 2 months. At least they kept the 4%.

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Comment #3 by Anonymous posted on
Anonymous
This credit union continues to concern me just a little. And I am a member. Reason for concern is the old "too good to be true" maxim. More and more people today, as re financial things, are learning "too good to be true" turns out not to be true.

Please don't misread this. I'm loving my ACU membership right now. This is certainly NOT a message of complaint. I have been very well treated by ACU, and I like the people there with whom I've come into contact. But regardless I am limiting my further exposure to ACU. Diversification just seems prudent in times like this. Because if these super flex deals at ACU go belly up with rates down at, for example, 2% or lower, I don't want to have too much money coming back to me from the NCUA and needing reinvestment at that point.

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Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
I should have mentioned that there has been a credit union which ended the add-on feature of a special CD for existing account holders. Many readers who were account holders filed complaints about this breach of contract, but I'm not sure if they were successful.

These add-on CDs do create risk for institutions in a falling interest rate environment. They could have $5 million of high interest deposits turn into $100 million. That's probably why banks like WaMu have limited the add-on to 100% of the initial deposit.

Shortening the term from 15 months to 7 months does help them reduce the risk.

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Comment #5 by Anonymous posted on
Anonymous
Agreed, Banking Guy. You are thinking of USCU, I believe. I don't know the outcome, either, of any lawsuit which might have gone forward. I do know, though, that the President of USCU at the time resigned or was fired just a few months after the deal went down. My USCU CDs paid off recently without difficulty. But as you point out, they did need to reign in their deal early and there was a howl of protest - at the very least.

Without question my experience with USCU has colored my thinking. But I'm also factoring in that these are FAR more stressed financial times than anything that was going on late in 2006.

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Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
Yup, USCU was the one. Another credit union that ended their add-on feature was Self-Help CU. However, according to the SHCU CSR, it appeared they were willing to make exceptions for existing CD account holders. No readers reported issues with them.

With a few hundred rate chasers, I could see how a credit union with an add-on CD could find itself in trouble in our current environment.

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Comment #7 by Anonymous posted on
Anonymous
Curious whether the $33 fee to join the Army Organization is requires renewal annually or every 3-years for more.

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Comment #8 by Anonymous posted on
Anonymous
A friend of mine phoned about opening a 4% account today and was told that TUESDAY IS THE LAST DAY OF THIS DEAL! That means all of the paperwork, etc. has to be in ON TUESDAY for the 4% rate for seven months.

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Comment #9 by Anonymous posted on
Anonymous
Update - I called Saturday 1/17 and the rep told me the last day of the flex cerification program was yesterday. One thing I'd like to mention that I had contacted them 3 times in 2 weeks asking for an application to be mailed and never received it. Yesterday I left my name and address again and was told this program was over that day. Very disappointed with their lack of service.

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