Update 11/19/2011: The promotion has been extended to November 30, 2011. Also, there are issues with Velocity's online application. I have more details in this blog post.
Velocity Credit Union did something that is unusual these days. It came out with a CD special with very competitive rates. The yields are 2.83% APY for 5 years, 2.12% APY for 3 years and 1.51% APY for 2 years. Minimum deposit is $5,000. These rates are listed in the credit union's promo page as of 11/8/2011. These special rates are scheduled to last through 11/21/2011. Since these are specials, Velocity's Elite Reward rates do not apply. Thanks to the reader ADB4IN who noted this special in the forum.
One nice feature of Velocity CDs 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Accounts having a term greater than one year, the penalty imposed will equal 180 days of dividends on the amount withdrawn.
Velocity Credit Union's online application provides an easy way for anyone to join. The application is provided by Andera which is a common service used by many financial institutions for online 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. This association is also listed in the credit union's members companies page.
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 share savings account.
Velocity Credit Union Overview
Velocity Credit Union 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 in 2010, 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 5 stars (out of 5) with a Texas Ratio of 1.94% (excellent) based on June 2011 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).
How These CD Rates Compare
These special CD rates are very competitive compared to other CDs that are nationally available. The special 2-year CD rate is not quite as high as the best 2-year CD rate which is 1.70% APY at Alliant Credit Union. Velocity's special 3-year CD rate is above the previous leader, 1.91% APY at Melrose Credit Union. For 5-years, it's just under Digital Credit Union's 2.86% APY, but this DCU rate requires a checking and credit card relationship. These CD rates far exceed what you can get at banks. The best nationally available 5-year bank CD rate is 2.25% APY at US Bank (59-month CD special). These rates are accurate as of 11/8/2011.
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: