I was pleasantly surprised to see Melrose Credit Union maintain their CD rates into June. Many other credit unions and banks have cut their rates in the last few weeks, and now Melrose's 1- and 2-year CDs are especially competitive (3.03% APY 1-year and 3.19% APY 2-year as of 6/12/09). For longer term CDs, Pentagon Federal Credit Union still has the best deals.
Melrose CDs have a minimum deposit of $5,000 ($4,000 for IRA certificates). Below is a full list of the CD rates as listed in the credit union's rate table as of 6/12/2009:
CD Rates as of 6/12/2009:
Term Rate APY
1 year 3.00% 3.03%
2 year 3.15% 3.19%
3 year 3.30% 3.34%
4 year 3.45% 3.49%
5 year 3.85% 3.91%
The last time Melrose cut its CD rates was at the start of April. They don't always limit their rate cuts at the start of a month. In February, they cut their CD rates near the middle of the month. So it's possible these current rates may be cut before July, and that is a valid concern for those considering these CDs.
At the top of the rate table, it states that "your certificate will be the rate that is in effect the day your completed paperwork and funds are received." Several readers have reported that Melrose is slow in opening accounts by mail. They now have an online application with ACH funding, however, the process can still be slow. A reader commented in my last Melrose CU post that it's "A slow process by online & mail (5 days) despite funding from ACH." If you do apply online, they also need copies of a photo ID and proof of address. For the proof of address, the reader mentioned that a cell phone bill didn't work. A utility bill is recommended. The reader also mentioned that Melrose ran a hard credit check for opening CDs.
Readers who have been able to visit their branch in Queens, New York have reported an easier time. Here's a reader's comment from my last Melrose post:
Fortunately I live on Long Island and the drive into Queens is worth it. I have had absolutely no problems when dealing in person. The staff could not be more helpful. Never had a problem opening or closing or maturity.
At the bottom of the first page of the online application, there's a link to the disclosure which provides details of the CDs. Certificate dividends are compounded and credited to your account every quarter. You can also have the dividends paid to your Share Account every quarter.
The early withdrawal penalty as described in the disclosure is confusing. The penalty appears to be 90 days of interest for the 1-year term and 180 days for the longer terms. In addition, if you don't withdraw all of the money, the CD interest rate is reduced for the entire life to the share savings rate.
Anyone can join the credit union. According to Melrose's membership page:
Since Melrose Credit Union has an open New York State charter there are no geographic or group affiliation field of membership restrictions. So, regardless of where you live or how you earn a living, you may qualify for membership.
Financial Health and NCUA Status
For those who are looking for sound financial institutions, Melrose CU may be one according to the rating services: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both are based on 12/31/08 data.
Melrose is located in Briarwood, New York which is in Queens. It's federally insured by the NCUA (Charter # 62005).
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