Yesterday's large CD rate cuts at Melrose Credit Union may be a bad sign for savers. The credit union has a long history of being a CD rate leader. With the interest rate environment continuing to worsen (as seen by yesterday's record low 10-year Treasury yields), I wouldn't be surprised that these new Melrose CD rates may become top rates in a couple of months as other banks and credit unions lower their rates. The largest cuts were on the longer terms. Below is a summary of the new rates as listed at Melrose Credit Union's share rates page as of 7/25/2012. I also included the old rates for reference. The last rate cuts were in April.
- 1.96% APY 5-year CD (was 2.17% APY)
- 1.71% APY 4-year CD (was 1.96% APY)
- 1.46% APY 3-year CD (was 1.76% APY)
- 1.21% APY 2-year CD (was 1.36% APY)
- 0.95% APY 1-year CD (was 1.10% APY)
Even with these rate cuts, these rates are still competitive in today's awful interest rate environment.
One thing to keep in mind before applying for one of these CDs is that Melrose Credit Union has a harsh and confusing early withdrawal penalty. Here's the early withdrawal penalty for CD terms over 1-year as listed in the disclosure (Make sure to request the latest disclosure from Melrose before you open a CD.)
18-60 Months term: Forfeiture of the first 180 days Dividend and a Reduction to the Share Savings Rate at the time of purchase.
Not only do you have to pay 180 days worth of interest on the principal, but you will be required to recalculate all of the interest earned to date at the share savings rate (which is currently 0.50%), and give back the difference.
Those with very large balances can earn an extra 25 basis points on the above CD rates. The required minimum balance is $1 million. Please refer to Melrose Jumbo CD page for more details. Note, with beneficiaries and joint accounts, it's possible to federally insure $1 million in deposits. Please refer to my post Maximizing Your FDIC Coverage with Beneficiaries.
Melrose Credit Union Membership
Anyone can join the credit union. According to Melrose's membership page:
Since Melrose Credit Union has an open New York State charter there are no geographic or group affiliation field of membership restrictions. So, regardless of where you live or how you earn a living, you may qualify for membership.
Even though Melrose makes it easy to qualify, they don't make it easy to apply. Several readers have commented about problems they had in the application. Please refer to my November Melrose Credit Union CD review for more of these details.
Melrose Credit Union has one office located in Briarwood, New York which is in Queens.
Melrose Credit Union Financial Overview
The credit union continues to have strong financials. Its overall health score at DepositAccounts.com is still 5 stars (out of 5) with a Texas Ratio 0.48% (excellent) based on March 2012 data. Please refer to our financial overview of Melrose Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 62005).
How These CD Rates Compare
Another rate leader just had a rate cut. Fort Knox Federal Credit Union reduced is 59-month CD rate from 2.25% to 2.15% APY. Even with this rate cut, this CD continues to be on top as the highest nationally available CD rate for terms around 5 years. The second highest is 2.12% APY for a 5-year CD at U.S. Senate Credit Union. The highest 5-year CD for a bank is 2.02% APY at National Bank of Kansas City. These rates are accurate as of 7/25/2012.
Searching for the Best CD and IRA CD Rates
To search for the best nationwide rates and the best rates in your state, please refer to the following sections of DepositAccounts.com: