Dept of Commerce Federal Credit Union Boosts CD Rates

For the fourth time in seven months, Department of Commerce Federal Credit Union (DOCFCU) has raised its long-term CDs rates, with APYs which are rate (or near-rate) leaders. Any of these CDs can be opened with a minimum $500 deposit, but initial deposits of $25k or more receive an additional 10 bps; there is no stated balance cap.

The CDs are also available as IRA CDs (Traditional, Roth, CESA), earning the same APYs with the same deposit requirements.

DOCFCU’s Relationship Rewards program awards points for services and balance levels. The points add up to free benefits like higher yields on certificates, with Bronze Members receiving an additional 5 bps, Silver Members receiving an additional 10 bps, and Gold Members receiving an additional 25 bps. In addition to the Relationship Rewards levels, initial deposits of $25k or more receive an additional 10 bps.

For example, if you are Gold Member who opens a 60-84 month CD with at least $25k, the applicable rate would be an excellent 1.89% APY.

As stated in the fine print on the Members Perk page,

All benefits and reward levels are subject to change. Member points will automatically be evaluated monthly for upgrades to higher levels. Once a member has established a reward level, they qualify for that level until the end of the year. New reward levels will be classified November 30th of each year and effective the beginning of the year. All transactions are per month unless otherwise stated.

According to the CD FAQs, the Early Withdrawal Penalty reads as follows,

You can close your CD at any time; however, you will be subject to the following penalties if you are outside of the 10 days of opening of the CD or renewal/maturity date:

• 12-84 months: The penalty is the first 180 days of dividends.

CSR confirmed that only an early closure is possible, with no partial withdrawals allowed.

As I pointed out in the Michigan State University Federal Credit Union blog post at the beginning of the week, a mild EWP increases the competitiveness of a long-term CD, particularly in the short term. If (or when) rates begin to rise in the near future, a 180-day EWP would be beneficial should an excellent rate opportunity arise. Using DA’s Early Withdrawal Penalty Calculator, you can see what the effective yields would be on a month-by-month basis, showing that closing a 60-84 month CD wouldn’t spell financial disaster. For example,

• 0.51% APY ($500), 0.56% APY ($25k) – closed at 9 months
• 0.77% APY ($500), 0.83% APY ($25k) – closed at 1 year
• 1.03% APY ($500), 1.11% APY ($25k) – closed at 18 months

An early withdrawal after nine months would result in effective APYs of 0.51% and 0.56%, which are slightly above the current APY of many online savings accounts (OSA). Should rates go up later this year, the EWP won't result in a worse situation than if you had kept the money in an online savings account. However, if rates don't go up, you'll earn a lot more than if your money had been in an OSA.

The comparison to an OSA assumes that OSA rates won’t rise much (if any) in the next nine months. If OSA rates rise substantially in the next nine months, an OSA would be a better choice. However, you should compare the estimated average OSA rate in the next nine months with the yield from an early withdrawal from the 60-84 month CD. Assuming OSA rates rise from 0.50% to 1.00% in the next nine months, the average APY for an OSA over nine months would be around 0.75%. That’s not much better than the early withdrawal.

Funding and Maturing Funds

CSR stated the easiest way to fund a CD is through an internal transfer of funds. DOCFCU participates in the CO-OP Shared Branch network, enabling a relatively easy transfer of outside funds into a DOCFCU savings account. The “Share Certification Application” form for existing members asks where the funds are to come from.

Withdrawal [of funds] From: Savings, Checking, Money Market

Earned dividends can be added to the CD principal, transferred to a DOCFCU savings or checking account, or distributed by check and mailed to the address on file. Maturing funds will be distributed by check or transferred to a DOCFCU savings or checking account. There is a ten day grace period before a CD automatically renews.

Excess Share Insurance

DOCFCU offers its members the protection provided by the Excess Share Insurance, the nation’s largest provider of excess share insurance since 1993.

To further protect our members’ deposits, we provide the highest combination of federal/private share savings deposit insurance available: $500,000, which includes savings accounts, checking accounts, money market accounts and certificates of deposit.

Availability

Headquartered in Washington, D.C., Department of Commerce Federal Credit Union’s field of membership (FOM) changed in early 2020, with membership now available to all U.S. citizens and residents aliens who live in Delaware, Maryland, Pennsylvania, Virginia, or West Virginia, through joining the Maryland Consumer Council (MCC), which is part of the American Consumer Council.

Individuals who live, work, attend school, or worship in the District of Columbia are also eligible to join.

Employees of the U.S. Department of Commerce or NOAA (and affiliates) also qualify for membership, as do the employees of the White House Management and Administration Office, and the Executive Office of the President.

Family members of current DOCFCU members are also welcome to apply.

Joining DOCFCU can be done online, with an option to join MCC as part of the DOCFCU membership application. (Note: there’s a “Become a Member” on the upper right-hand corner of every page of DOCFCU’s website).

Joining DOCFCU and/or opening a CD can also be done in-branch. As stated on the COVID-19 & DOCFCU page,

HCHB Branch is open Monday – Friday 8:30 AM – 3:30 PM – Effective August 30, 2021 all Visitors must complete a Vaccine Attestation form for entry in Commerce faculties. Forms are available at the guards desks.

Our Silver Spring Branch is temporarily closed due to onsite construction, and our White House branch is also temporarily closed. The credit union is fully functioning and our staff is ready to help you remotely.

As stated in the FAQ section on the CDs & Savings page,

Click here to request a CD or give us a call at 202.808.3600.

The Share Certificate Application is more of a “Contact Me” form than an actual application and can only be used by existing members.

Opening a Regular Share Savings with a minimum $5 deposit establishes DOCFCU membership.

DOCFCU participates in the CO-OP Shared Branch network, as well as the MoneyPass and Allpoint ATM networks.

Credit Union Overview

Department of Commerce Federal Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 1.02% (excellent) based on September 30, 2021 data. In the past year, DOCFCU has increased its total non-brokered deposits by $28 million, an excellent annual growth rate of 6.26%. Please refer to our financial overview of Department of Commerce Federal Credit Union (NCUA Charter # 16410) for more details.

Department of Commerce Federal Credit Union was established in 1932 for the benefit of the employees of the Department of Commerce. In 2005, DOCFCU expanded its FOM to “adopt” the city of Washington, D.C., giving its more than 571,000 residents the opportunity to join. The 2015 merger with the White House Federal Credit Union instantly increased the number of members, but the fairly recent change to a limited “easy membership” charter has the power to increase the membership exponentially. Currently the District’s third largest credit union, DOCFCU has more than 18,600 members and assets in excess of $591 million.

How the CDs Compare

When compared to the similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum opening deposit and are available within the FOM, Department of Commerce Federal Credit Union's long-term CD APYs currently rank in the top three of their respective categories.

The above information and rates are accurate as of 1/12/2022.

To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.