Higher CD & IRA CD Rates at Navy Federal Credit Union - Limited Membership

Navy Federal Credit Union is the latest institution to increase its long-term CD rates. Its 7-year CD rate for a $20K minimum deposit has increased from 2.85% to 3.05% APY. The rate of the IRA version increased from 3.00% to 3.10% APY. Rates are 10 basis points lower for a $1K minimum deposit. Navy Fed continues to offer the special 30-month IRA CD with a 2.15% APY. These rates are listed at Navy Fed's certificates rates page as of 3/1/2011.

One downside with the 7-year CD is a large early withdrawal penalty. According to Navy Fed's disclosure, the penalty is 365 days of interest. If closed before one year, all interest is lost (it doesn't eat into the principal). CDs with terms over 1 year and up to 5 years have an early withdrawal penalty of 180 days of interest.

Special EasyStart Certificate

As a reader mentioned yesterday in a forum thread, Navy Fed has recently increased the rate of its EasyStart Certificate. It's actually a Special EasyStart Certificate with a 3.50% APY for a 1-year term. But don't get too excited by this product. It has several limitations as described by Navy Fed's small print:

$3,000 maximum balance. Only one Special EasyStart Certificate per member is allowed. Certificate owner(s) age 18 and older must have Direct Deposit of Net Pay (minimum $300 per direct deposit), a Navy Federal checking account, and a monthly automatic transfer of at least $15 into your Special EasyStart Certificate within 90 days of the certificate issue date. If these requirements are not met, your Special EasyStart Certificate dividend rate will be reduced to the prevailing dividend rate of a standard EasyStart Certificate for the remainder of the certificate's term. At maturity, the Special EasyStart Certificate will automatically renew to a $100 minimum, standard EasyStart Certificate at the prevailing dividend rate unless member specifies otherwise

Membership

There were hopes that Navy Fed would expand its field of membership after it acquired USA Federal Credit Union last year. That didn't happen. To be eligible to join Navy Fed, you must have some connection with the military. This includes Navy, Army, Marine Corps and Air Force. Please refer to their Eligibility Checklist for the full details. Unlike Pentagon Federal Credit Union, there isn't an easy way for people without a military connection to join.

Navy Federal Overview

Branches are located around the US and the world.

Navy Federal has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 10.19% (above average) based on December 2010 data. It's the largest credit union in the nation with $44.20 billion in assets and $31.24 billion in deposits. Please refer to our financial overview of Navy Federal Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 5536).

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

Edit 4/5/2011: Corrections made to health score and Texas Ratio