In February, NEFCU (formerly known as the Nassau Educators Federal Credit Union) added an 18-month Penalty Free Certificate (1.85% APY), which was available for about a month. The 18-month Penalty Free Certificate is back and offers a significantly improved 2.75% APY. The minimum deposit is $1k, with no stated balance cap.
The Penalty Free Certificate is also available as an IRA (Traditional and Roth) earning the same APY, but with a lower minimum opening deposit of $500.
NEFCU’s website doesn’t list any details about limitations on the withdrawals, because there aren’t any. The Penalty Free Certificate offers unlimited penalty-free withdrawals, at any time, and in any amount, as long as a $1k minimum deposit is maintained. Should the balance fall below $1k, the Certificate will be closed.
With this type of no-penalty CD, the longer the term, the better. There’s no real downside with a longer term, since the no-penalty CD (unlike standard CDs) can be closed at any time after the first six days without a penalty. In addition, should rates fall, a longer term with a higher rate is a definite plus.
Thanks to DA reader, barry_NY, for his Forum post about the return of NEFCU’s Penalty Free Certificate.
Headquartered in Westbury, New York, NEFCU’s field of membership (FOM) is residency based, with individuals who live, work, or attend school in Nassau or Suffolk Counties (Long Island).
Any existing NEFCU member can sponsor an immediate family member (parent, child, grandparent, sibling) or any household member.
Most credit unions that have an "eligible for membership" list on their website; NEFCU has an “eligible for membership” and a "NOT eligible for membership" list.
Membership is not open to the following areas on Long Island:
East Hampton, Southhampton and Shelter Island.
Joining NEFCU and/or opening the Penalty Free Certificate can be done online or at any of twelve Long Island branches, located in Commack, Franklin Square, Greenvale, Huntington Station, Massapequa, New Hyde Park, Plainview, Rockville Centre, Syosset, Valley Stream, Wantagh, and Westbury.
Credit Union Overview
NEFCU has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.16% (excellent), based on June 30, 2018 data. In the past year, NEFCU increased its total non-brokered deposit by $223.56 million, an excellent annual growth rate of 8.95%. Please refer to our financial overview of NEFCU (NCUA Charter # 2760) for more details.
NEFCU was founded in 1938 as the Valley Stream Teachers Federal Credit Union with 10 members and $50 in assets. The initial FOM included employees of Nassau County schools, colleges and universities, public libraries, and other affiliated groups. The name was changed to NEFCU in 1981, to better reflect the growth and expansion of the credit union. In 2010, NEFCU was granted a community charter, allowing for an ever greater broadening of the FOM in Nassau and Suffolk Counties. Currently, NEFCU serves more than 187,800 members and holds assets in excess of $3 billion.
How the Penalty Free Certificate Compares
If compared to the similar length-of-term CDs tracked by DepositAccounts.com available with the FOM, NEFCU’s 18-Month Penalty Free Certificate APY is not that impressive, with nearly 20 institutions offering higher rates. A better comparison uses the two “no penalty” CDs currently offered by Ally Bank and Goldman Sachs Bank USA, as the Penalty Free Certificate’s intrinsic value lies in the penalty-free withdrawals.
The above rates are accurate as of 11/22/2018.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.