Dedicated to Deposits: Deals, Data, and Discussion

High-Yield Low-Max CD Specials


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
= 0.085
Extra earnings for 1yr = $1,000 * 0.085
= $85
Extra earning for the
specific 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)
If you find any similar CD promotions, please leave a comment.

  Tags: CD rates

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Comment #1 by Anonymous posted on
Patelco - New Member Certificate

5% APY, 12 months, $1k min & max balance