Some credit unions and banks have a rates match program in which they will match or exceed the rate of the same product at other banks or credit unions. Stanford Federal Credit Union is one of the institutions that has such a program. It's called the ‘Beat the Rate’ Program. Members with a Stanford FCU checking account and a monthly direct deposit of $500 or more to checking will receive a 0.10% rate bonus above the competition. A reader had a good idea about how to put this to work. In a comment he suggested to use this program to have Stanford FCU beat US Bank's 2.25% APY 59-month CD. In addition to getting a slightly higher rate of 2.35% APY, you would also get a much more favorable early withdrawal penalty. According to page 24 of Stanford FCU's disclosure, the early withdrawal penalty for terms of one year or more is 180 days of dividends on the amount withdrawn. US Bank's EWP is much worse as I described in my US Bank CD review.
At first I thought there might be a complication with this strategy. As you might expect, Stanford FCU's Beat the Rate program has some small print. You can read all of it in the Stanford FCU CD page. Below are the important excerpts:
Published means advertised via newspaper, online, radio or television. California based banks only. Internet only banks and credit unions excluded. Certificates will be opened on the existing schedule of maturities. This offer applies to new Share Certificates, IRA Certificates and current Stanford FCU Certificates at maturity, with comparable terms and minimum balance requirements. Cannot be used in conjunction with special rate promotions by other financial institutions.
I wasn't sure if US Bank's CD would qualify based on this small print so I emailed Stanford FCU the link to US Bank's webpage showing this 2.25% CD special and asked if this would qualify for this program. I was told that it would qualify:
If the member qualifies for Beat the Rate program, yes, we can open a share certificate using that rate/APY.
US Bank's special CD rate is quite a bit higher than the best rate offered by Stanford FCU. That's currently 2.02% APY for a 5-year term and a $100,000 minimum deposit. This is listed at Stanford FCU's certificates page as of 1/10/2012.
Every now and then Stanford FCU has offered competitive certificate rates. It also has a long history of competitive HSA rates. There are two rates that are currently available. One is 2.53% APY for the Premier Health Savings Account (PHSA). The same requirement that qualifies members for the Beat the Rate program will qualify members for this PHSA rate: a Stanford FCU checking account with monthly direct deposit of $500 or more. Without this, the rate is 1.51% APY for the standard HSA.
According to the credit union's page Who Can Bank at Stanford:
If you do not fall within our regular field of membership, you can join the Museum of American Heritage (MOAH) or Friends of Palo Alto Libraries (FOPAL) in order to become a member of Stanford Federal Credit Union.
Credit union membership requires a minimum $50 balance in an account. Accounts can be opened online, but they require that you mail in your check and copies of your ID. Please refer to this Stanford FCU page for more details.
Stanford Federal Credit Union branches are located in Stanford and Palo Alto, California. The credit union is also a member of CU Service Centers which allows you to perform many transactions at branches of other credit unions which are part of the network.
The credit union has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 6.53% (excellent) based on September 2011 data. Please refer to our financial overview of Stanford FCU for more details. The credit union is federally insured by the NCUA (Charter # 13392).
Other Banks and Credit Unions with a Beat the Rate Program?
If you know of other banks or credit unions with similar rate-match programs, please leave a comment. Sometimes you can get a bank to match or exceed a competitor's rate even if they don't have an official rate match program. Meeting with a branch manager with a print-out of a competitor's rate will give you the best chance.
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.