Freedom Credit Union Boosts Long-Term CD Rates To Competitive Levels
Pennsylvania-based Freedom Credit Union (Freedom CU) substantially increased the rates on its long-term CDs this week. With increases of 26 bps, the 36-month (1.26% APY), 48-month (1.31% APY), and 60-month (1.41%) are currently offering competitive rates. The minimum opening deposit is $500, with no stated balance cap. All three CDs are offered as Youth CDs (members 25 years and younger) earning the APYs, but requiring a lower $250 minimum deposit.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 1.71% | $500 | - | Freedom Credit Union (PA) | 60 Month CD | |
| 1.61% | $500 | - | Freedom Credit Union (PA) | 48 Month CD | |
| 1.56% | $500 | - | Freedom Credit Union (PA) | 36 Month CD |
The CDs are also offered as IRA CDs (Traditional, Roth, CESA), earning the same APYs with the same deposit requirements.
In the past, Freedom CU offered the “flexibility to add to your CD any time after opening.” According to CSR, the additional deposit option is not available on CDs opened after April 1, 2020.
As stated in the Rate and Fee Schedule page, the Early Withdrawal Penalty reads as follows:
Terms of 12 to 36 months – 180 days of dividends
Terms of 48 to 60 months – 360 days of dividends
Dividends are compounded and credit monthly, with withdrawals of dividends allowed.
CDs can be funded through an ACH transfer or through a CO-OP Shared Branch transfer. Maturing funds are normally distributed by cashier’s check, but can be transferred to a Freedom CU savings account and then withdrawn by ACH. There is a 10-day grace period before a CD automatically renews.
Availability
Headquartered in Warminster, Pennsylvania, Freedom Credit Union’s field of membership (FOM) experienced significant changes four years ago. A nationwide easy membership requirement (EMR) through the American Consumer Council (ACC) was established at the beginning of 2018. By August 2018, the scope of EMR had narrowed, with only residents of Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia, and the District of Columbia now qualifying through ACC membership.
To join using ACC membership, you must either email ([email protected]) or fax (215.612.5939) your ACC eligibility certificate. According to the CSR, the online application details the process.
Local Residency: Freedom CU also offers membership to individuals who live, work, worship, attend school, or volunteer in the southeast Pennsylvania counties of Bucks, Chester, Delaware, Montgomery, or Philadelphia.
Select Employee Groups: Community College of Philadelphia employees and students also qualify for membership, as do the employees/members of more than 290 participating SEGs.
Joining Freedom CU can be done online, or at any of four full-service Pennsylvania branches, located in Abington, Philadelphia (2), and Warminster.
CDs can be opened at any of the above-mentioned branches, but not online. CSR stated that after your online membership application has been submitted and approved, opening and funding a CD can be done over the phone (215.612.5900).
All Memberships are required to have a Freedom Savings account with a minimum
balance of $5.00 to be a member in good standing with Freedom Credit Union.
Freedom CU participates in both the CO-OP Shared Branch network and the ATM network.
Credit Union Overview
Freedom Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 2.95% (excellent) based on September 30, 2021 data. In the past year, Freedom CU has increased its total non-brokered deposits by $34.74 million, an excellent annual growth rate of 3.64%. Please refer to our financial overview of Freedom Credit Union (NCUA Charter # 60275) for more details.
Originally chartered in 1934, Freedom Credit Union is currently Pennsylvania’s eleventh largest credit union, with more than 68,000 members and assets in excess of $1.1 billion. Between 2011 and 2014, Freedom CU merged with two Philadelphia area church-based credit unions, and also assumed Philadelphia-based Mayfair Credit Union’s members and deposits following an NCUA liquidation.
How the CDs Compare
When compared to the similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are available within the FOM, Freedom Credit Union’s 36-month CD APY currently ranks second.
When compared to the similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are available within the FOM, Freedom Credit Union’s 48-month CD APY currently ranks second.
When compared to the similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are available within the FOM, Freedom Credit Union’s 60-month CD APY currently ranks third.
The above information and rates are accurate as of 1/28/2022.
Looking for the best CD rates, either nationwide and state specific? Please refer to our CD Rates Table page.
Freedom Credit Union is experiencing good financial health. But Freedom's financial health situation would probably be even better were it not for people like me. I bought $500 worth of "rate insurance" several years ago never thinking I really would need it. I was wrong.
My evaluation is that Kaight's statement is incorrect. Others are free to make their own evaluations. But I suggest that any such evaluations be based on the financial data.
I believe that those figures (from current and previous reports) do not support the view you stated in your initial comment. BUT perhaps others might look at those numbers and have a different opinion (and they might know more than I do).
https://mapping.ncua.gov/ResearchCreditUnion.aspx
Btw, I have them all, I did think that was the top in rates or very close and grabbed as many as I could. Do you remember Tobyhana aka Valor, another one that tried to end their add-ons...thankfully Penfed took them over.
The following may seem a bit unusual, but here goes. I'm respectfully requesting that Ken Tumin's DepositAccounts.com website (if their time and resources permit), consider publishing 1 or more articles - fairly soon - on the concept of "call reports", in reference to depository financial institutions, primarily banks and CUs.
Prior comments 2, 3, 4 and 5 in this thread have referenced "call reports". I myself admittedly know nothing about "call reports" - hence this post. But it certainly seems from the context provided in the above posts, that "call reports" might perhaps be a factor in determining or estimating the vulnerability of the add-on CDs that many DA.com users currently hold (myself included), to what many see as a rate-hiking environment in the very near future.
So, I wonder whether info. on "call reports" might be an item of general interest to DA.com users.
Call reports are just monthly financial statements that the NCUA requires CUs to file according to a specified format. They provide certain balance sheet and income statement data about assets, liabilities and net worth, income and expenses along with other details pertaining to asset quality, risk factors and the nature and quality of each category.
As far as I know you cannot learn much from them about the risk of holding add-on certificates from this or any other credit union from the call reports primarily because there is no separate category in the reports for "add-on" certificate liabilities (which by the way may be the biggest risk factor a CU has and it is telling that it is ignored on the call reports).
I think the size and general health of the CU is probably the only assessment you can make from publicly available information that has a bearing on the risk of holding these add-ons. And that is only of limited value.
I do not think you can make any kind of reasonable informed assessment that either supports or disputes the opinions offered in comments #1 or #2 above based on information from the call reports because the data you would require to do so is just not there. Yes you could possibly use conjecture to assess it by the time period breakdown of certificate liabilities if you take into account when the offer period was and when the maturity dates might fall, but that is so rough and uncertain as to be nothing more than a guess.
So I don't think either of the opinions in comment #1 or #2 are supportable based on the information in the call reports. And I don't think the call reports would shed any additional useful light on what you are trying to assess.
(emphasis added)
No source is provided for this statement.
from the NCUA website:
Call Report Form Archive
Includes all quarterly Call Report forms in PDF format from September 1999.
(emphasis added)
Source: https://www.ncua.gov/analysis/credit-union-corporate-call-report-data
Data in call reports can provide information as to how deposit growth (or diminution) is divided among checking accounts, savings accounts, and CDs. And within the CDs, by length of time to maturity.
I will provide one example as to how call reports can be used to assess the extent to which deposit growth may be attributable to add-on CDs. The late Tobyhanna Credit Union had been offering 7-year add-on CDs at excellent rates for quite a while. Then, in 2014 (if memory serves), information about those CDs appeared on depositaccounts.com and other websites.
In the following periods, it was easy enough to follow the quarterly call reports and ascertain that Tobyhanna's substantial deposit growth was mainly attributable to increases in long-term CDs. And from there, I believe it was reasonable to infer that the increase in long-term CDs was mainly attributable to the add-on certificates.
The call reports shed light that is useful to me, in terms of what I am interested in.
I will not express an opinion as to whether they will be useful to any particular person interested in add-on CDs.
Right, "monthly" should have been quarterly. It was a typo.
I cannot say that it would be impossible to make any kind of useful deduction regarding every add-on certificate that has ever been offered using the call reports. I don't know anything about the case you reference so I have no comment on it. But I don't think such methods are possible for the subject add-on or any other add-on in the past few years that I am aware of.
In specific, your comment #2 said:
“My evaluation is that Kaight's statement is *incorrect* (emphasis added, no source provided). Others are free to make their own evaluations. But I suggest that any such evaluations be based on the financial data.”
On what financial data did you base your evaluation that Kaight’s statement is incorrect?
In evaluating the following statements, the reader should be aware that I have poor vision; I cannot be certain that these numbers are accurate. Please feel free to check them against the actual financial data. And I looked at more than the figures listed below.
According to the December 2021 call report, total deposits in Freedom Credit Union share certificates were $253,574,269.
According to the December 2020 call report, total deposits in Freedom Credit Union share certificates were $319,381,705.
I also looked at changes in deposit amounts in share draft, savings, and money market accounts. (Interested readers, if any, can look at those numbers and evaluate their roles in Freedom Credit Union's deposit growth.)
(I also looked at intervening call reports.)
Kaight wrote in Comment #1: "I am a Freedom CU member and I am respectful of what Ken wrote. However I would observe that this credit union's "excellent annual growth rate" of non-brokered deposits, likely as not, is on account of members like myself vigorously expanding our add-on CDs at 3.25% APY."
I think that Kaight's statement was incorrect, based on my evaluation of the financial data. But, as I wrote in Comment #5:
"I deliberately refrained from providing any "analysis". My purpose in posting Comments 2 and 3 was to note that financial figures, that shed light on certain aspects of deposit growth, are publicly available."
On matters relating to evaluations of call reports, I encourage others to look at the call reports and see if they might them useful. I don't believe that my evaluations are of use to anyone other than alan1 (and perhaps my belief that they're useful to me is incorrect; but I use them anyway).
"According to the December 2021 call report, total deposits in Freedom Credit Union share certificates were $253,574,269.
According to the December 2020 call report, total deposits in Freedom Credit Union share certificates were $319,381,705.
I also looked at changes in deposit amounts in share draft, savings, and money market accounts. (Interested readers, if any, can look at those numbers and evaluate their roles in Freedom Credit Union's deposit growth.)
(I also looked at intervening call reports.)
Kaight wrote in Comment #1: "I am a Freedom CU member and I am respectful of what Ken wrote. However I would observe that this credit union's "excellent annual growth rate" of non-brokered deposits, likely as not, is on account of members like myself vigorously expanding our add-on CDs at 3.25% APY."
I think that Kaight's statement was incorrect, based on my evaluation of the financial data."
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Okay so you gave some figures from call reports that indicate nothing about whether Kaight's statement was correct or not. And you state that you don't want to give the analysis that led you to that conclusion that Kight was incorrect.
So I don't see anything that changes my belief that there is insufficient information in call reports for you to determine that Kaight's statement was incorrect but I would be grateful to learn how you arrived at that conclusion.
At present I find the Freedom CU and the GTE Financial add-ons to be of highest interest. This is because those add-ons, unlike MACU's for example, are uncapped. Capped add-ons inherently provide a measure of protection for the issuing financial institution. Hence their viability is less of concern.
The mechanisms at play here are pretty obvious. As time passes more and more of our CDs currently residing elsewhere mature. At that point we either move the funds into a high-yielding add-on or face down interest returns in the vicinity of 1% APY, plus or minus. My original comment was prompted by the worry that Freedom CU might, at some point going forward, become overwhelmed by such inflows of money on which they are obligated to pay an above-market rate of interest. So if Freedom CU's excellent growth rate of non-brokered deposits is instead owing to something else, I'm relieved. That since I'm certainly hoping for the sweet Freedom CU gravy train to roll on until my add-on CD matures. And Freedom CU at this time appears to be in better financial health than GTE Financial, which is my only other add-on option and one I find ever so slightly scary.
Bottom line I'm hoping for the best at Freedom CU. I want them to be around and financially healthy for a long, long time . . . . or at least until 2025!
So all such exchanges by persons with more knowledge are most welcome.
I think your concerns are the right ones to have. But I don't think it is possible to determine whether or not the growth in deposits at Freedom CU is attributable to additional deposits to add-on CDs from publicly available information. It's not something explicitly given in the financial statements and I don't think that any implicit analysis could provide a high enough confidence level to be useful.
Decisions about adding additional funds to add-ons may become tricky this year or next if rates increase. And I think it unlikely to happen any time soon, but at some point the add-on rates may end up lower than market rates and the CUs may experience a benefit from the add-ons. The final chapter on those 3%+ add-ons they issued is not yet written although it certainly feels good to have them at this point.
If you attach significance to the change in deposits over the last year (I'm not suggesting that you should or should not do so), I think that the appropriate comparison is between the fourth quarter of each year. And if you look at those call reports, you might see a rather different picture.
Comparing the 2021 fourth quarter call report to the fourth quarter 2020 call report
a. Freedom Credit Union reported an increase in share draft deposits
b. Freedom Credit Union reported an increase in savings deposits
c. Freedom Credit Union reported an increase in money market deposits
d. Freedom Credit Union reported a substantial decrease in CD deposits.
I think those are important facts relevant to the possibility raised by Kaight in his Comment #1.