Dedicated to Deposits: Deals, Data, and Discussion

Navy Federal's IRA CD Special & Top CD Rates - Limited Membership

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Navy Federal Credit Union

Navy Federal Credit Union has a new IRA CD special, and its long-term CD and IRA CD rates continue to be competitive. The special is a 3.00% APY 20-month IRA CD. It has a big limitation in that it has a maximum balance limit of $18,000, and only one special CD per member is allowed. On the plus side, it allows add-on deposits at any time. The minimum deposit is only $50. Unfortunately, it's only available for IRAs and ESAs (Education Savings Accounts). This special CD rate is listed in the Navy Fed's certificates rates page under the "specials" tab as of 12/22/2011.

Navy Fed also has a special 1-year CD with a 3.00% APY called the EasyStart Certificate. This is available as regular CDs in addition to IRAs, but this has a low maximum balance of only $3,000. It also requires checking with direct deposit.

Navy Federal continues to offer competitive long-term CD rates. Its 7-year CD with a $20K minimum deposit has a 2.80% APY which tops PenFed's 7-year CD rate by 5 basis points. The 5-year CD rates are 2.30% APY for a $100K minimum, 2.20% APY for a $20K minimum and 2.10% APY for a $1K minimum deposit. These rates are listed in the Navy Fed's certificates rates page as of 12/22/2011.

The maximum early withdrawal penalty for the 7-year CD is 365 days of interest. For terms greater than one year and up to 5 years, the penalty is up to 180 days of interest. The penalty won't eat into the principal. Details are listed in Navy Fed's disclosure. Note, there are some risks in relying on mild early withdrawals penalties.

Membership

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

Navy Federal Credit Union branches are located around the US and the world.

Navy Federal is the largest credit union in the nation with $45.54 billion in assets and $33.13 billion in deposits. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 7.87% (excellent) based on September 2011 data. 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).

How These CD Rates Compare

The 3.00% APY is a great yield for a 20-month term in today's environment, but the $18K maximum balance and the IRA limitation are big downsides. I would have preferred a 2.00% APY without the maximum balance or IRA limitation. As a comparison, the best 24-month CD rate that's available nationwide is 1.50% APY ($25K minimum) at Alliant Credit Union.

Navy Fed's 2.80% APY 7-year CD is the best nationally available 7-year CD rate in the nation. The second best is 2.75% APY at Pentagon Federal Credit Union. To get a rate close to this at a bank requires a 10-year term. Discover Bank's 10-year CD has a 2.50% APY.

These rates are accurate as of 12/22/2011.

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.


  Tags: Navy Federal Credit Union, CD rates, IRA rates

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Comments
2 Comments.


Comment #2 by Anonymous posted on
Anonymous
I recently opened the 20 month IRA cd.  After opening I sent them an email to change the maturity instructions.  The default is a renewal to a 24 month cd.  I wanted the new instructions to be to deposit the money back into the IRA savings account, at which time I would decide what to do.  I am always afraid that I will overlook a maturing CD and neglect to make  a change before the end of the grace period.

I have had CDs at numerous institutions and have always been able to do this (Penfed, Western, Citadel, Addison Ave, etc)  ( I think all these, except Citadel, were found based on your blog. Thank you, thank you) NFCU won't allow one to do this.  They answered and said " However, if you do not wish to continue the certificate we can accept maturity instructions no more than 30 days prior to maturity of xx/xx/2013. " 

Not happy.  But I have now learned this is one more thing I have to make sure of when I open a certificate.

2
Comment #3 by Anonymous posted on
Anonymous
Just be sure to place you a reminder in your email calendar (30 days prior to maturity date) to instruct them not to renew.  That way they do not have the opportunity to renew you for 24 months at possibly an unacceptable interest rate.  In the meantime, enjoy the 3% apy for the 20 month IRA that you got on your IRA CD.

2