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 DepositAccounts.com 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 DepositAccounts.com.