Update 3/5/2011: Velocity has replaced its 18-mo CD special with two new CD specials: 2.27% APY for 3 years and 1.76% APY for 2 years. Minimum deposit is $5K. According to Velocity's promotions page, these are scheduled to last until March 18th.
Velocity Credit Union has extended its New Year's 18-month CD and IRA CD special to last through February. 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 2/11/2011. According to the promo page, this special is scheduled to last until February 28, 2011.
Another nice change at Velocity was a 10-bps bump in their competitive 5-year CD rates. The 5-year CD rate is now up to 2.73% APY, and the 5-year IRA CD rate is up to 2.83% APY. For members who are at least 50, you can qualify for Elite Rewards which can boost these yields from 0.10% to 0.20%. One nice feature of this CD is a reasonable early withdrawal penalty. According to Velocity's account disclosure, the early withdrawal penalty is 180 days of interest:
For certificate Accounts having a term greater than one year, the penalty imposed will equal 180 days of dividends on the amount withdrawn.
As I described in January, the higher rate of the 5-year CD and the reasonable penalty make the 5-year CD a better deal than the 18-month CD.
How It Compares
This 5-year CD special compares very favorably to 5-year CDs available nationwide. As of 2/11/2011, the best nationwide 5-year CD rate is 3.00% APY at Connexus Credit Union (requires an active checking). The best rate at a bank is 2.75% APY at Salem Five Bank. Also, it's important to note that both of these CDs have much larger early withdrawal penalties.
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: