Fort Knox Federal Credit Union just increased its 5-year CD rate from 2.65% to 3.05% APY which makes it the highest rate for a nationally available 5-year CD. All other of Fort Knox FCU CD rates remained the same, and many are still competitive including a 2.15% APY for a 3-year CD and a 1.60% APY for a 2-year CD. Minimum deposit is $500. These rates are listed on the credit union rates page as of 6/17/2011.
One thing that hurts this deal is how this credit union claims it can change early withdrawal penalties on existing CDs. I described this issue in this March blog post. On February 15th, the early withdrawal penalty on certificates with maturities greater than 24 months increased from 90 days to 180 days interest whether earned or not. This change applied to both new and existing CDs. The new penalty is reasonable, but the issue is if they increased the EWP on existing CDs once, there's nothing to stop them to raise it again.
I'm in contact with the Office of Consumer Protection of the NCUA regarding this issue. I was told in late May that the issue is in the final review process. I'm hoping we'll see Fort Knox FCU reverse its decision and allow the original 90-day early withdrawal penalty to continue on all CDs opened before February 15.
If this early withdrawal penalty issue can be resolved, Fort Knox FCU membership can again become a good deal. There are several nice perks with Fort Knox FCU membership. First, the credit union is part of the CU Service Center which allows you to take care of many banking transactions at a shared branch. Last year a reader described how he easily opened a Fort Knox FCU CD by deposited a large check at a local credit union that belonged to this network. The deposit was made to his Fort Knox savings account. He called Fort Knox FCU that same day, and he was able to open the CD with the funds from the deposited check.
Fort Knox FCU also offers a great cash-back credit card with 5% cash back for gas and 1.25% cash back on all other purchases.
Fort Knox FCU used to have a typical field of membership which included residents of several counties in Kentucky. However, in early 2010 I noticed the following highlighted sentence in the credit union's membership eligibility page:
If you do not meet any of these eligibility criteria, you may qualify for membership by joining the American Consumer Council --it's free!
I just noticed the credit union now has an online application. In the online application where you select how you're eligible to join, it states:
If you can't find an eligibility requirement to match your situation, you can still join the credit union. Just select the "I'm eligible for membership through" drop down to the left and choose the "other" option.
Credit Union Overview
Fort Knox Federal Credit Union branches are located in several cities in Kentucky including Fort Knox, Radcliff, Elizabethtown and Campbellsville. Also, as I mentioned above, the credit union belongs to the shared credit union network that allows you to perform several banking transactions at shared branches across the nation.
The credit union has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 2.83% (excellent) based on March 2011 data. Please refer to our financial overview of Fort Knox Federal Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 7000).
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