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4.25% 7-Year CD to 2.00% 1-Year CD Continues at Montauk CU in New York City - Local Only

Tuesday, January 19, 2010 - 1:49 PM
Montauk Credit Union continues to offer some very competitive CD rates as if 1/19/2010 including a 2.50% APY 24-month CD and a 3.75% APY 5-year CD. It's a small credit union that requires a branch visit, but they have an open charter membership. One downside is a harsh early withdrawal penalty. Refer to my December review for more details.
1
Ken TuminKen Tumin5,441 posts since
Nov 29, 2009
Rep Points: 123,651
1. Wednesday, February 3, 2010 - 10:47 AM
I did some rough math in regards to Montauk Credit Union's seemingly very competitive CD interest rates on their web site and was surprised at what I came up with.  Because they pay simple interest and not compound interest on their CD's the rates they offer are very misleading.  If you invest in their 7 year CD paying 4.25% simple interest this actually equals to roughly 3.80% compound interest over the life of the CD.  So I would be very cautious of how any bank or in this case credit union's interest is paid.  The difference can be substantial on a large sum of money.
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AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,776
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