Dedicated to Deposits: Deals, Data, and Discussion

High CD Rates Available Again at Montauk Credit Union in NYC


Montauk Credit Union

Montauk Credit Union has long offered top CD rates. However, it stopped accepting new deposits in 2011. That has recently changed. After a reader mentioned this in the comments, I called on Friday and confirmed that they are again accepting new deposits. The current long-term CD rates are very competitive. However, it’s important to point out that the early withdrawal penalty (EWP) is very harsh. Below are the CD and IRA CD rates as listed at the credit union’s rates page as of 6/17/2013:

  • 2.75% 7-year CD and IRA CD
  • 2.50% 5-year CD and IRA CD
  • 2.25% 4-year CD and IRA CD
  • 1.75% 3-year CD and IRA CD
  • 1.50% 2-year CD and IRA CD
  • 1.25% 18-month CD and IRA CD
  • 1.00% 1-year CD and IRA CD

Minimum deposit is $2,500. There’s no compounding. A reader reported that they'll deposit the interest in your credit union savings account every quarter. You can also request for them to send you a check.

The early withdrawal penalty (EWP) is harsh. A reader recently received this information from the credit union and was nice enough to forward it to me.

The EWP is equal to 25% of certificate term in dividends PLUS the reduction of total dividends paid to the prevailing share rate from the original term date. No partial principal withdrawals permitted.

Here’s an example of the EWP. For a 2.75% APY 7-year CD with a $100,000 deposit, the 25% component of the EWP would be 1.75 years of dividends which equals about $4,813.

The other EWP component is based on the share savings account rate. If the CD balance is over $50,000, the share savings account rate that would apply is 0.75%. That’s a difference of 2.00%. So if the CD is closed after two years, this EWP component would equal about $4,000.

Adding the two EWP components in this example results in a total EWP of $8,813. That equals over three years of interest which is very harsh for early withdrawal penalties.


According to Montauk Credit Union’s history page, “MCU has an “open charter” which enables us to extend membership to anyone.” Even though they allow anyone to join, I’ve been told that you have to come into the branch to join.

Credit Union Overview

I’ve been told the Montauk Credit Union office is a teeny "storefront" on west 26th Street just off 6th Avenue.

It’s a small credit union with over 3,000 members and with assets exceeding $140 million.

The credit union has an overall health score at of 5 stars (out of 5) with a Texas Ratio of 0.90% (excellent) based on December 2012 data. Please refer to our financial overview of Montauk Credit Union for more details. The credit union is federally insured by the NCUA (Certificate # 63231).

How These CD Rates Compare

These long-term CD rates are much higher than the CD rates that are nationally available. The highest nationally available 5-year CD rate that doesn’t have an active checking requirement is 1.91% APY at Andrews Federal Credit Union.

Searching for the Best CD Rates

To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of

  Tags: Montauk Credit Union, New York, CD rates

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Comment #2 by Anonymous posted on
Are you kidding me!!!!

Sounds like a PayDay loan shack and their CEO is Guido on the corner by the all night liqour store.

Comment #3 by Wil posted on
#2: Perhaps you would have been more comfortable with havings CDs with a big bank with slick ads like IndyMac? Oh, wait, it failed, didn't it? This little "payday loan shack" has you called it survived the recent financial crisis just fine. So don't be so quick to judge.

Comment #4 by Wil posted on
I just had to correct my typos. Comment should have read: "Perhaps you would have been more comfortable with having CDs at a big bank with slick ads like IndyMac? Oh, wait, it failed, didn't it? This little "payday loan shack" as you called it survived the recent financial crisis just fine. So don't be so quick to judge."

Comment #8 by Anonymous posted on
Savers are hoarders!!! You have no right to keep money in private hands and away from THE PEOPLE!!

All money should be given to the government and then distributed to those in the most need! All wealth should confiscated by the government!!!!

Comment #10 by Wil posted on
I'm pretty sure that #8's comment is intended as satire. At least I hope so!

Comment #11 by Anonymous posted on
I think most of us would agree with Ken that the EW penalty here is, indeed, very harsh.  What strikes me, though, is that it is an honest penalty which most likely can be relied upon no matter what happens in future.

It's a concern that other credit unions, while proclaiming a more lenient EW penalty today, will doubtlessly change their penalty retroactively if the s**t hits the fan in future, as well it might.  If that happens, this honest penalty might start to look pretty darn good. 

Comment #12 by lou posted on
I don't know about "honest penalty" since I can't read their mind, but I know it is unduly harsh. Therefore, I will pass on this CD.

Comment #13 by Maecl posted on
This type of penalty may be the future of banking.  My elderly father didn't notice a CD maturing mailing.  It renewed for 3 years at .35%.  The penalty if withdrawn would have been 3% of the principal $25 dollars. The bank wouldn't make an exception. They did give him an extra .15%.  Not big of them since at the time they were offering .75% for that term.

The bank is Webster in CT.

Comment #14 by Anonymous posted on
It's simple, just don't put money in here unless you are sure you will never access it before maturity.

Think of it like a non-callable bond that pays high interest but for which there is no secondary market.

Comment #15 by Maecl posted on
I should have said the penalty on my fathers Webster Bank CD was 3% of the principal 25 dollars.  It would have been around $3000.

Comment #16 by Maecl posted on
I can't believe I made another mistake.  It was 3% of the principal plus $25.

Comment #18 by Duck (anonymous) posted on
Now am I missing something  I always thought a CD is a term certificate you take it in exchange for a rate and agree to let the institution do what they want with the funds for a set period of TIME.

 If you want a savings account open that or a moneymarket it allows like 6 transactions a month problem solved I belive it is 3checks or Atm withdrawals and 3 teller transaction but dont have one so not positive just know it will be a lower rate but you can do and have no restrictions on your cash.

 Just shut up please If you cant take the EWP then dont go there just stop ****in about it already. MCU is only guarding against idiots that treat a CD as a ATM and inflation driving up the rates and people taking money before maturity. I personally wouldnt care if a bank instuted a EWP of forfeitting 50% of principle and all interest if it got me a decent rate.