Update 12/09/08 6:00pm EST: The CD special has ended. They must have attracted a ton of deposits.
Agriculture FCU has just started a new risk free certificate with an APY of 4.25% and a 10-month term. Minimum deposit is $5,000, and the money must be new to the credit union. The risk free option gives you the opportunity to make one penalty free withdrawal during the term of the certificate. The credit union's promotion page lists the 4.25% APY as of 12/08/08.
The reader who informed me of this special mentioned that it will likely end this Friday (12/12/08). Last year when AFCU was offering a 6% 10-month CD, it launched the promo on Monday, and it ended on Friday. The small print of the promo states that it could any at any time.
To make it even more flexible, you should be able to open several of these CDs (each has a minimum of $5,000). When you compare it to a savings account, you have much of a savings account liquidity but you also have a higher rate that's locked for 10 months. If interest rates continue to decline, this rate lock could come in handy.
I emailed the credit union in October about their previous Risk-Free CD. Here is an excerpt of their reply:
you can withdraw the entire amount and all the dividends will be included with the withdrawal up to the date the withdrawal was made. Yes you can request to have this done by phone , email, secure email or by mail. No, there is no limit to the number of certificates that you wish to have opened.
Field of membership includes members of CityDance Ensemble. CityDance has open membership to anyone that pays membership dues of $20.00. This membership can be done at the same time that you apply for credit union membership. They have an online membership application in which you can join CityDance for $20, join the credit union for a $5 initial deposit to the Primary Share account, and open the CD. You do not have to renew your CityDance membership to maintain membership at the credit union.
The FOM also includes those who live, work or worship in Washington DC plus other group affiliations. See site for the full details.
Save $5: The membership page has a special promo for new members
We’ll deposit the required minimum balance of $5.00 to their accounts when they use promotion code 1234 to join.
I joined AFCU and opened a CD in November 2006. For more information on AFCU and the CDs, please refer to my November 2006 AFCU post. If you already are a member of AFCU and want to open another account online, please see my July 2007 post in which I described my experience opening my second AFCU CD.
Back in 2006 and 2007, AFCU had many great CD specials with rates of 6% or higher. There haven't been too many great CD specials since then, but their CD rates have remained fairly competitive.
Branches are located in Washington DC, Riverdale, Maryland, and Alexandria, Virginia. AFCU is also part of National Shared Branching network in which you can use local credit unions to access your account and conduct many transactions.
AFCU has some strong financial ratings for soundness: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both are based on 6/30/08 data. The credit union is federally insured by the NCUA (Charter # 16400). It has $201.6 million in assets and 23,599 members.
Thanks to the reader who emailed me info on this new special.