It took a while before Navy Federal Credit Union responded to PenFed’s high CD rates. Unfortunately, Navy Fed was quicker to respond to PenFed’s rate cuts. Navy Fed cut rates on its CDs with terms from 4 years to 7 years. However, the rate cuts weren’t as large as PenFed cuts, and Navy Federal’s new rates are still very competitive. Below is a summary of the new long-term Navy Federal CD rates for a $100K minimum deposit and how much they have changed. The rates are 5 bps lower for a $20K minimum deposit and 10 bps lower for a $1K minimum deposit:
- 2.80% APY 7 year (-30 bps)
- 2.45% APY 6 year (-30 bps)
- 2.30% APY 5 year (-25 bps)
- 1.80% APY 4 year (-30 bps)
- 1.55% APY 3 year (no change)
The above rates are based on what’s listed in Navy Federal’s Certificates Rates page as of 3/3/2014. Navy Federal offers CDs in IRAs and ESAs with the same rates as the regular CDs. Thanks to DA reader Hoody for posting on this news in a blog comment.
Early Withdrawal Penalty
The early withdrawal penalty for terms over 1 year and up to 5 years is equal to up to 180 days of dividends on the amount withdrawn. The penalty for terms over 5 years is up to 365 days of dividends on the amount withdrawn. The penalty won't eat into the principal if the withdrawal is made early into the term. In those cases the penalty will equal all of the accrued interest.
The early withdrawal penalty and other CD details are listed in the Navy Federal Combined Certificate Disclosure.
Nice IRA Features and Bonuses
If you have IRA CDs at Navy Federal, you may want to consider withdrawing the funds and use them to open one of these new IRA CDs. If you have reached 70 ½, you can do this penalty free. Navy Federal IRA CDs also have some other nice features. I have more details in my post Nice IRA CD Features at Navy Federal Credit Union.
If you’re considering opening a Navy Federal IRA CD, check out its IRA promotions. The bonus is up to $200 when you open the IRA. I have information on this promotion at this blog post.
Unlike PenFed, there's no association that can be joined to qualify for Navy Federal 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. Unfortunately, not all veterans will be able to qualify.
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 $55 billion in assets and $40 billion in deposits. It has an overall health grade at DepositAccounts.com of an A+ with a Texas Ratio of 5.43% (excellent) based on September 2013 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).