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CD Rates Fall at Melrose Credit Union But Remain Competitive - Available Nationwide

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Melrose Credit Union
Melrose Credit Union lowered the rates on all of its certificates yesterday. All but the 5-year CD rate were cut by 5 basis points. the 5-year CD rate fell by 11 basis points. Even with these cuts, the rates remain competitive. Below is a full list of the CD rates as listed in the credit union's rate table as of 9/30/2009:

CD Rates as of 9/30/2009:

Term Rate APY APY Change
1 year 2.20% 2.22% -0.05
2 year 2.45% 2.47% -0.05
3 year 2.95% 2.98% -0.05
4 year 3.30% 3.34% -0.05
5 year 3.75% 3.80% -0.11

Minimum deposit is $5,000 ($4,000 for an IRA). Dividends accrue daily and are compounded quarterly. Members have the option to have their quarterly dividend transferred to another share account.

Early Withdrawal Penalty:

One thing that has been very confusing about Melrose certificates has been the early withdrawal penalty. It appears the early withdrawal penalty is quite severe. Readers have reported that the early withdrawal penalties are listed in the share certificate account disclosure that is made available near the end of the online application. Note, this is different than what's listed in the disclosure at the start of the application. Here's how the penalty is described:
  • 9-12 Months term: Forfeiture of the first 90 days Dividend and a Reduction of Rate to 1.50%
  • 18-60 Months term: Forfeiture of the first 180 days Dividend and a Reduction of Rate to 1.50%
Note, the 1.50% used to be 2.50% and this appears to be based on the current rate of Melrose's share savings account. A reader asked Melrose about what exactly is meant by this reduction of rate. According to the credit union CSR "The rate drops to 1.5% for the full term and is in addition to the dividend forfeiture."

Joining and Opening Accounts

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. When you first join, you have to mail in signed forms even if you use their online application.

Several readers have described their experience opening accounts at Melrose in the comments of my June Melrose post. One way to expedite the CD application process is to first become a member with a $1 fee and a $25 deposit in the share savings account. Once you're a member, you can then fund a CD using money in the share savings account. A reader commented about using a local credit union that belongs to the CU Service Centers to make a deposit into his Melrose savings account. Then, he faxed in the completed and signed CD application. The CD was funded the same day from the money in the share savings account.

For more details about Melrose CDs and the application process, please refer to my June Melrose post and the comments at the bottom of that post.

Membership

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

Melrose Credit Union's rating for safety and soundness has actually gone up at Bankrate.com from 4 stars to 5 stars which is the highest rating. This is based on 3/31/09 financial data. Melrose continues to have the highest rating of 5 stars at BauerFinancial based on 6/30/09 financial data.

Melrose is located in Briarwood, New York which is in Queens. It's federally insured by the NCUA (Charter # 62005).

Other Competitive Certificate of Deposit Rates
  Tags: New York, Melrose Credit Union, CD rates, IRA rates

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Comments
4 comments.
Comment #1 by Anonymous posted on
Anonymous
Sounds like a great outfit...

From Melrose site: "...Melrose IT Supervisor Sammy DeJesus, was tragically taken from us February 2 after succumbing to injuries sustained on January 30..."

From local paper: "Strip Club Brawler Takes A Deadly Fall... 28-year-old Sammy DeJesus of Caldwell Avenue in Maspeth was fatally injured after getting into a fight with 27-year-old Andrew Rodriguez of Main Street in Kew Gardens Hills on the staircase outside Goldfingers' nightclub at 92-77 Queens Blvd..."

1
Comment #2 by Anonymous posted on
Anonymous
I tried to join last year, in a joint account with my husband. After going through the entire process, I was told I needed to send in a copy of my MARRIAGE CERTIFICATE (my husband and I have different last names, but we've been married for over 30 years!). That seemed so bizarre and unreasonable to me that I told them to forget the whole thing, and withdrew my application!

1
Comment #3 by David (anonymous) posted on
David
They have just reduced their savings account rate today. It went from 1.50 % down to 1.25 %

1
Comment #4 by Anonymous posted on
Anonymous
The "no geographic or group affiliation field of membership restrictions" is a big surprise.
Opening an account always required proof of residence in NY - utility bills, rent receipts, proof of mortgage payments, deed, etc. My adult daughter living at home couldn't open an account since she doesn't pay rent or own property.

1