Dedicated to Deposits: Deals, Data, and Discussion
Fort Knox Federal Credit Union1.00%$500-36 Month CD
Fort Knox Federal Credit Union0.65%$500-24 Month CD
Accounts mentioned in this post. Rates as of August 27, 2014

Highest 5-Year CD Rate in the Nation at Fort Knox Federal Credit Union


Fort Knox Federal Credit Union

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.

Membership Eligibility

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 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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  Tags: Fort Knox Federal Credit Union, Kentucky, CD rates

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Comment #1 by mak1118 posted on
Maybe their members have cut back on opening cds because they realized Fort Knox could not be trusted. 3.05% is not a high enough of a rate considering the fact that they have in the past raised their EWP retroactively and can do it again in the future.

Comment #2 by Anonymous posted on
Even if the regulators make the right decision (and require that early withdrawal penalties not be changed on existing CDs), I'm not sure I'd want to deal with a shady organization like Ft. Knox CU, for fear that they'd find another way to mistreat their customers in the future.


Comment #3 by Anonymous posted on
Based on their history of trying underhanded things with the members, I wouldn't open this CD unless I was 186% sure I would be leaving the money there for the full 5 years.

Comment #4 by Anonymous posted on
I, for one, never open any CD with any thought of not holding it until it's original maturity date.  CDs were never intended to switch in and out of like trading stocks and bonds.

Comment #5 by mak1118 posted on
#4: You should always have the possibility in your mind that you might want to close the cd early,what if rates went up 2% or more you would want to hold onto the cd?  Why,to help the bank or the credit union? You should always open a cd in an institution you trust, not one that has proven in the past they are not out for their members. I think the banks and the credit unions have proven lately that they are only worried about themselves and their money and to me that means we should do the same.

Comment #6 by mak1118 posted on
#4: You sound just like the person I talked to at Fort Knox credit union, if cds were never meant to be closed why is there an EWP? What for emergencies only, when I am holding a cd at 3% and rates go up to 5 or 6% then me closing that cd becomes an emergency.

Comment #7 by Anonymous posted on
#4 you should be buying bonds instead. If you always hold everything to maturity, then there's no risk of your bonds going down in value, and you can get a higher rate on similar term bonds than on a CD.

Comment #8 by Anonymous posted on
If they insist that they can change the EWP mid-stream, do they also feel that they can change, i.e., lower,  the APY mid-stream if it is to their advantage? Haven't seen any discussion in this regard but would such a senario really suprise anyone? Just sayin'.

Comment #13 by ChrisCD posted on
#8 - That is exactly what a bank in Texas did.  Ken actually posted some information about that.  Granted those were "brokered" CDs held by institutional client's, but they expected CD terms to be honored just like everyone else.

The FDIC nor the OTS in the bank's case cared to get involved.  So kudos to the NCUA if they force a resolution.  But, like others knowing that an institution is not looking out for its members would cause me to not want to recommend them.

Comment #9 by rosie43 (anonymous) posted on
I have had CD's since the late 70's. I always have some CD's come due once or twice a year. Some are smaller than others. If you wait to get higher rates you lose, if you close CD's early you lose. Read Ken's blogs about laddering CD's. I really do think that is the way to go. When you first have excess savings then go fo the highest rate for the funds you have no matter how long. As you have more savings do the same. You will soon have laddered CD's without intentionally laddering your CD's. If you budget and a CD rate is quite high you always have excess funds use that money and replenish your budget as soon as a CD comes due. Always have an emergency fund, some use a HE loan as an emergency, others have savings. This is a personal decision. I have always budgeted as if there were only 40 weeks in a year. That way we have extra money in each category for car repairs, home repairs, extra high doctor bills. We are somewhat prepared for a lay off or other emergencies such as a new refrigerator etc. My husband was a union plumber-pipefetter, welder etc. and did not get vacation pay or holiday pay so this was the way for us to compensate.

Comment #10 by mak1118 posted on
#9: I have 21 cds at a 7 year ladder and that does not change anything if I have a cd that is paying 3% and I can then get 5% or 6% I will break that cd in a heartbeat and did so when Greenspan had rates low and then raised them and because of that I still have ones I bought from Pentagon federal that are paying 6% replacing the 4% capital ones I had cashed in early. Don't forget you are allowed to take a 3000.00 loss off your taxes each year reducing the EWP that way.

Comment #11 by Anonymous posted on
Are the CD T&C posted at the Fort Knox website?  I have not been able to locate them.

Specifically, is there a survivor put option with regards to the EWP exceptions?

Comment #12 by KenBDG posted on
There's a membership agreement booklet that appears up-to-date. The link is on the upper right of their site map. It's a PDF and it was giving my acrobat reader version a problem. I had to use Google's preview tool to see it.

Comment #14 by M&M (anonymous) posted on
Hi, Key,

They just lowered the apy to 2.93% TODAY! Shortest CD rate promotion. 

Comment #15 by Anonymous posted on
I had a 100,000 cd come due and went to the service center and found out that I could only transfer $99,999.99 to another credit union.  The thing that was bad was that I was first told when I asked for the $100,000 to be transfered, that I could not transfer that much money.  It took about twenty minutes to find out that I could transfer $99,999.99