Velocity Credit Union just came out with a New Year's CD special. The credit union is offering special rates on an 18-month CD and IRA CD. The CD rates are 1.51% APY for a $90K deposit and 1.46% APY for a $10K deposit. The IRA CD rates are 1.56% APY for a $90K deposit and 1.46% APY for a $10K deposit. These rates are listed in the credit union's promo page as of 1/28/2011. According to the promo page, this special is scheduled to last until February 11, 2011.
How It Compares
These rates compare favorably to internet banks and other easy-to-join credit unions as of 1/28/2011. At internet banks, the best 18-month CD rate is 1.56% APY at Franklin Synergy Bank ($1K minimum). At easy-to-join credit unions, the best 18-month CD rate is 1.55% APY at Alliant Credit Union ($25K minimum).
How It Compares to 5-Year CDs
Velocity Credit Union is also offering top rates on 5-year CDs and IRA CDs. I reviewed Velocity Credit Union's 5-year CD in December. As I described in that post, Velocity's early withdrawal penalty is 180 days of interest on the amount withdrawn for CD maturities over 1 year. Based on this, the 5-year CD is actually a better deal than this 18-month CD special. If you make an early withdrawal on the 5-year CD at 18 months, you'll lose about 6 months of interest, but you'll keep a year of interest at 2.63% APY. That averages out to around 1.75% APY for 18 months. You can see how to calculate this post-penalty yield in my review of the best long-term CDs.
There's an online application for membership and account opening via Andera, a common service used for account opening. In the application page that covers eligibility, the bottom of the page states "None of the above apply. I would like to join one of the following organizations." In the select box, Paramount Theater Association is the only one included. There's a $15 fee to join this association, and it appears to be open to all.
In addition to Paramount Theater Association members, credit union membership is open to those who live or work in one of the following Texas counties: Travis, Williamson, Hays, Bastrop or Caldwell. Please refer to their Eligibility Page for the full details. Membership requires a minimum $5 deposit into the savings account.
Credit Union Overview
Branches are located in Austin and Round Rock, Texas.
You might remember Velocity Credit Union from 2009. It's the credit union that tried to switch from NCUA deposit insurance to the private ASI deposit insurance. Early last year, the credit union management changed their minds and decided to stay with the NCUA.
The credit union has an overall health score at DepositAccounts.com of 4 out of 5 with a Texas Ratio of 2.93% (excellent) based on September 2010 data. Please refer to our financial overview of Velocity Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 68359).
Searching for the Best CD Rates
To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com: