Dedicated to Deposits: Deals, Data, and Discussion

Competitive CD Rates at Montauk Credit Union in New York City - Local Only


Montauk Credit Union

Montauk Credit Union continues to offer competitive rates on its CDs and IRA CDs. The rates have gone down for the shorter terms since my December 2009 post, but the rates have held on the longer terms and remain very competitive. Below is the full list of rates as listed at the credit union's rate table as of 4/05/2010:

  • 1.60% 12-month
  • 1.85% 18-month
  • 2.50% 24-month
  • 3.00% 36-month
  • 3.25% 48-month
  • 3.75% 60-month
  • 4.25% 84-month

Note, they only do simple interest, so there's no compounding. A reader reported that they'll deposit the interest in your credit union savings account every quarter. You can also request for them to send you a check.

Last year a reader informed me about the early withdrawal penalty. Unfortunately, it's harsh. For those familiar with Melrose Credit Union, it's very similar. For terms over one year, it's 180 days of interest PLUS the interest rate drops for your entire CD term to whatever the interest rate is in the savings account for that day. The current savings account rates are 0.75% for $5K to $50K and 1.00% for $50K and above.

According to the credit union's About page, anyone is eligible to join:

MCU has an "open charter" which enables us to extend membership to anyone.

A reader reported that she had to go into the branch to join. According to the reader, the office is in a teeny "storefront" on west 26th Street just off 6th Avenue. The process of opening a CD appears to be a little odd. Here's how the reader described it:

I had to send them a letter telling them I wanted to open a CD, and then someone called me to give me the "go-ahead". I put the check in the mail today.

Update 4/6/10: The reader provided an update based on the opening of new Montauk CDs. She can now open the CDs by phone. According to the reader:

I tell her the term I want, and then I send a check (they won't pull funds from another institution.). But the rate will hold as of the phone conversation. That's it. A few days after I send the check, I receive the actual paper certificate in the mail. And the CD shows up online as well.

She also provided an update on the interest she receives from last year's CD:

the quarterly interest has been posted with no glitches in the share savings account, like clockwork at the end of the quarter. I then ACH it to my "home" bank

The credit union's rating for safety and soundness has gone down a bit at It's now 3 stars (performing) based on 9/30/09 data. In December it had been 4 stars based on 6/30/09 data. It continues to have the top rating of 5 stars at BauerFinancial based on 12/31/09 data. The credit union is federally insured by the NCUA (Certificate # 63231).

  Tags: New York, Montauk Credit Union, CD rates, IRA rates

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Comment #1 by Anonymous posted on
Below is what I posted about this credit union on February 3, 2010.

I did some rough math in regards to Montauk Credit Union's seemingly very competitive CD interest rates on their web site and was surprised at what I came up with.  Because they pay simple interest and not compound interest on their CD's the rates they offer are very misleading.  If you invest in their 7 year CD paying 4.25% simple interest this actually equals to roughly 3.80% compound interest over the life of the CD.  So I would be very cautious of how any bank or in this case credit union's interest is paid.  The difference can be substantial on a large sum of money.

Comment #2 by Anonymous posted on
The 4.25% simple interest is not equal to 3.8% compounded, if anything it is more than 4.25%.  At the end of each quarter they give you 1.125% interest.  You can then take that interest and do whatever you want with it.  If you decide to leave it in an account with 0% interest, you are still getting 4.25% on you money over the year.  If you reinvest the interest somewhere else you will obviously do better than 4.25% on the year.  If anyone disagrees with my analysis please let me know ehre I went wrong.


Comment #3 by Anonymous posted on
Sorry make that 1.0625% every quarter, but same diff.  4.25% on the year.  thanks.

Comment #4 by Anonymous posted on
I am not sure that I understand about the simple interest.  If I purchase from that bank a $40000 CD, and it pays 4 percent, what is the approximate amount that will be posted each quarter to my account?  I plan to place the interest from that $40000 elsewhere.  I come up with a ball park figure of $133 each quarter.  Is that right?

Comment #5 by (anonymous) posted on
Oops, regarding the above post I should have asked the questtion, should it be about $399 each quarter?

Comment #6 by Anonymous posted on
yes, comes to 400 usd per quarter. apy will still be the same as the simple interest rate.

Comment #7 by Anonymous posted on
I think the rates are good.  you just might want to take the interest out quarterly since it is simple interest and use it elsewhere.  This credit union has only a total of 9 employees and one little office.  It is a very small credit union.