Dedicated to Deposits: Deals, Data, and Discussion

Competitive 5-Year CD at Northwest FCU with Useful IRA Feature - Available Nationwide

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Northwest Federal Credit Union
Northwest Federal Credit Union continues to offer some competitive CD rates. The most competitive is currently the 5-year CD with a 3.54% APY for a minimum balance of $25,000. Lower rates are available for smaller balances, and a 3.64% APY is available for a $100,000 minimum. In addition, higher rates (up 0.25%) are available to Premier Checking members and Heritage Club members. These rates are based on the credit union's rate sheet (pdf) as of 11/20/2009. Note, rates typically are changed on Tuesdays.

One reason for this post is to highlight an important IRA CD feature. I noticed the issue of early withdrawals of IRA CDs discussed in the bank deals hub, and I wanted to note Northwest FCU. According to the Certificates application form (pdf):
Early withdrawal penalty may be waived for those with IRA certificates who are 59½ and over

Otherwise, the standard early withdrawal penalty applies:
For Certificates having a term greater than six (6) months, the penalty will be equal to the lesser of 180 days of dividends on the amount withdrawn or all dividends on the amount withdrawn since the date of issuance or renewal.

And I can't find any small print that allows the credit union to refuse an early withdrawal. Here's what is stated for transaction limitations:
After the account is opened, you may make withdrawals subject to the early withdrawal penalties stated below.

For those with IRA CDs and are over 59½, this exception of an early withdrawal penalty can be very beneficial in this interest rate environment. There are not many other institutions that offer this. The only two that I can think of right now is Pentagon FCU (see review) and State Farm Bank (see SF's IRA disclosure).

2-Year Add-On CD

Another CD of note is the credit union's 2-year Add-On CD which has a 2.20% APY as of 11/20/2009. According to the Add-on Certificate page, you have the "ability to add on deposits over the term with no minimum amounts or limits to the number of deposits." There's also a 1-year Add-On CD, but the rate is not quite as competitive, only 1.47% APY as of 11/20/2009.

Additional Credit Union and CD Details

I have more details about Northwest FCU and its CDs in my September Northwest FCU review.

Membership

In addition to select employer groups, credit union membership is open to members of the American Consumer Council (ACC). According to the credit union's Who We Serve page:
If you find you are not eligible to join NWFCU via the relationships defined above, we can approve your membership with automatic enrollment in the American Consumer Council, an organization dedicated to consumer education, awareness, and economic growth. This nonprofit advocacy group was established in 1987 to ensure and protect consumers. There is no cost for you to join, nor additional paperwork. Simply select "I work for a member company or an organization" then choose "ACC" from the list of eligibility options on our membership form.

Membership requires a minimum deposit of $5 into your share savings account.

Locations

NWFCU's branches are located in the Virginia cities of Manassas, Chantilly, Herndon and Vienna. You can also use shared branches for making deposits, withdrawals and for other services.

Financial/NCUA Info

The credit union's rating for safety and soundness has gone back up to 4 stars (sound) at Bankrate.com based on 6/30/09 data. It had dropped to 3 stars when it was based on 3/31/09 data. It continues to have the top rating of 5 stars (superior) at BauerFinancial based on 6/30/09 data.

NWFCU is federally insured by the NCUA (Charter # 5500). It's a large credit union with $1.7 billion in assets and 99,300 members.

Other Competitive Certificate of Deposit Rates

  Tags: Virginia, CD rates, Northwest Federal Credit Union, IRA rates

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Comments
5 Comments.
Comment #1 by Anonymous posted on
Anonymous
I really like NWFCU and it's now very easy to join via ACC.

Their CD rates change every Tuesday and move in tandem with prevailing Treasury bond yields.

I've added a ton of money to the 2-year 3.75% APY add-on CD I opened back in Febrary 2009. I sure hope rates go up by 2/2011, but I'm hedging my bets by rolling over my Pentagon FCU CD's that mature in 1/2010 at the promotional rate.

One thing I really love is that if you have a Premier Checking account you get free domestic wire transfers (both incoming and outgoing) plus a 0.25% certificate rate bonus. To avoid the $10 a month fee on this account, you need a $50K combined savings and loan balance, and CD's count toward that balance.

3
Comment #2 by Anonymous posted on
Anonymous
What if you open a 7 year IRA and you are not yet 59 1/2 but will be well before CD maturity. Does that mean that as soon as you turn 59 1/2 you will be eligible to withdraw some of the money w/o penalty?

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Yes, I believe that is the case.

1
Comment #4 by Anonymous posted on
Anonymous
The 5 year CD now yields 3.75% for $100,000 plus additional 0.25% bonus for having Premier Checking Account---So you can get 4.00% return.

1
Comment #5 by Anonymous posted on
Anonymous
I just opened another 5yr. CD since I will be turning 59 1/2 in about 6 months.  Seems like a great deal for us old folks since we can withdraw penalty free.  

1