MERCO Credit Union (CA) Adds 30-Month & 60-Month Bump-Up Add-On CDs
In November, I wrote about the Flex-Term Share Certificate offered by MERCO Credit Union (MERCO). Newly added to the product line, the Flex-Terms allowed for customized term lengths (6 months to 60 months), with all term lengths earning 5.00% APY. For whatever reason, MERCO has retired the 5.00% APY Flex-Term Share Certificates, but is now offering 5.00% APY ($500 minimum deposit) on two Bump-Up/Add-On Share Certificates – 30-month and 60-month.
The Bump-Up/Add-On Share Certificates are also available as IRA Bump-Up/Add-On Share Certificates (Traditional, Roth, CESA) earning the same 5.00% APY but requiring a $1k minimum opening deposit.
As stated on the Certificates and IRAs page (emphasis mine),
Bump Up Certificates offer greater flexibility and accessibility because after 6 months, you can choose to bump up your rate or invest more money into your certificate at the existing rate.
CSR confirmed that you can opt for either one rate bump or one additional deposit, but not both. There are no limits (minimum or maximum) on the amount that can be deposited, but you get only one additional deposit.
If you have a CD maturing in the next year or so, opening a Bump-Up Share/Add-On Certificate with a relatively small deposit could provide safe harbor for maturing funds. Think of it as a $500 insurance policy against falling rates, that just happens to earn 5.00% APY.
Early Withdrawal Penalty
According to CSR, the Early Withdrawal Penalty for the 60-month Bump-Up/Add-On Share Certificate is 180 days of dividends on amount withdrawn and 90 days of dividends for the 30-month Bump-Up/Add-On Share Certificate. Partial withdrawals are permitted, but the principal is not protected.
Availability
Headquartered in Merced, California, MERCO Credit Union’s field of membership (FOM) is community-based, with U.S. citizens and resident aliens (with a valid Social Security number) who live, work, worship, or attend school in the Central California counties of Madera, Mariposa, Merced, or Stanislaus eligible for membership.
Family members (living in California) of an existing MERCO member also qualify for membership.
Account Opening
Joining MERCO and/or opening a Bump-Up/Add-On Certificate can be done at any of three full-service California branches in Atwater, Mariposa, and Merced. While MERCO does have an online banking platform, it is dedicated to account management and bill pay services; there is no online application for either new memberships or account opening.
A one-time $5 membership fee and a minimum $5 deposit in a savings account establishes a MERCO membership.
Funding and Other Particulars
The following information is from a conversation with CSR.
- Funding – ACH, wire ($10 fee), check, or internal transfer.
- Ownership – Individual, joint, or trust.
- CO-OP Shared Branch Participant – No.
- Dividends – Compounded/credited monthly and can be automatically transferred to a MERCO Regular Savings account.
- Maturing Funds – Cashier’s check to address on file or internal transfer to a MERCO Regular Savings account.
- Beneficiaries – Unlimited and percentages can be assigned; Social Security numbers are not required.
- Grace Period – 10 calendar days before automatic renewal.
- Credit Check – ChexSystems.
Credit Union Overview
MERCO Credit Union currently has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 3.99% (excellent) based on September 30, 2023 data. In the past year, MERCO’s total non-brokered deposits decreased by $-3.88 million, a below average annual growth rate of -2.51%. Please refer to our financial overview of MERCO Credit Union (NCUA Charter # 64766) for more details.
Founded in 1954, MERCO Credit Union’s original FOM was exclusive to the residents of Merced County, California. MERCO describes itself as a “local, non-profit, member-owned Community Development Financial Institution” and currently has nearly 14,000 members and assets in excess of $172 million. According to a September 2022 CU Times article, MERCO received a $3.5 million grant as part of secondary capital awards from the U.S. Treasury Department.
NCUA Chair Todd Harper said the Emergency Capital Investment Program (ECIP) program is providing participating Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) with “patient, long-term capital that will become a game changer to advance greater financial inclusion and economic opportunity.”
“The pandemic-induced recession hit communities of color and the poorest households the hardest. High inflation rates have also created new economic challenges for these families,” Harper said.
How the 30-Month Bump Up Share Certificate Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available within the FOM and have minimum deposit requirements of $10k or less, two credit unions have higher rates than currently offered on the MERCO Credit Union 30-month Bump Up Share Certificate. The following table compares the 30-month CD to the four highest-rate CDs from other banks/credit unions within the FOM.
How the 60-Month Bump Up Share Certificate Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available within the FOM and have minimum deposit requirements of $10k or less, one credit union has a higher rate than currently offered on the MERCO Credit Union 60-Month Bump Up Share Certificate. The following table compares the 60-Month Bump Up Share Certificate to the four highest-rate CDs from other banks/credit unions within the FOM.
The above information and rates are accurate as of 1/19/2023.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
