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# High-Yield Low-Max CD Specials

POSTED ON BY Ken Tumin

A few credit unions have been offering special CDs with very high yields but with low maximum deposits. These are often new-member specials. I've posted on many of these in the past. A couple of readers have asked about these, so I thought it would be useful to highlight a few of these that are still available

To measure the value of one of these CDs, I compare it against an online savings account. For today's rate environment, I'll use 1.50% APY as a respectable yield. I then compute how much extra someone would earn in one of these CDs compared to the savings account. Here's an example.

Assume a 10% special 3-mo CD with a maximum deposit of \$1,000. Here's how I compute its value:
`Interest rate advantage = 0.10 - 0.015                        = 0.085Extra earnings for 1yr  = \$1,000 * 0.085                        = \$85Extra earning for thespecific CD term        = (3mo/12mo) * \$85                        = \$21.25`

In the above example, you'll only earn \$21.25 over what you would have earned if you had just kept the money in a 1.50% account for those 3 months. As you can see with a low maximum deposit and a short term, this kind of special CD could be more trouble than it's worth. With this in mind, here are three special CDs as of 11/24/09:

• 5.00% APY 12-month CD \$1K Max (extra \$35) at Patelco Credit Union. This is a new-member special. It was 7% when I joined. Anyone can join via an association, and the application can be done online. Refer to my credit union review for more details.
• 5.00% APY 5-month CD \$5K Max (extra \$73) at People's Trust FCU. I first posted on this in 2008. Anyone can join via an association, but if you don't live near its Houston branches, you'll need a notarized application (see review)
• 10% APY 3-month CD \$1K Max (extra \$21) at Service Credit Union. This is only available this Black Friday (11/27/09) and only at the CU's branches (see review)
Tags: CD rates