Navy Federal Unveils Rate-Leading 15-Month Add-On Special CD - Update
Now through April 30, 2023, Navy Federal Credit Union (Navy Fed) is offering a 15-month Certificate Special (5.00% APY, $50 min/$250k max). The 15-month Certificate Special is also an “add-on” CD, allowing unlimited additional deposits (subject to $250k maximum balance) throughout the term. There is a limit of one 15-month Certificate Special per member.
Although this limit-time offer is available through April 30, 2023, the fine print on the landing page does state:
Navy Federal reserves the right to end or modify this offer at any time.
Many thanks to DA readers, 6prendalane, NFO, and ADB4IN, for their Forum posts about this latest Navy Fed promotion and to all DA readers for their invaluable comments.
Early Withdrawal Penalty
As stated on Navy Fed FAQs page, the Early Withdrawal Penalty reads as follows:
If the term to maturity is greater than 1 year, the amount forfeited is equal to the lesser of:
- all dividends for 180 days on the amount withdrawn, or
- all dividends on the amount withdrawn since the date of issuance or renewal.
Funding and Accessing Maturing Funds
When opening a Navy Fed Certificate online, the easiest way to fund a Certificate is probably is through a transfer from an existing Navy Fed checking, savings, or Money Market Savings account. An ACH transfer initiated by another institution may be the quickest way to get the funds into your Navy Fed liquid account. Once the funds are received, a Certificate can be opened using the online application, which allows you to specify that funds be pulled from that Navy Fed account.
An easy way to access maturing Navy Fed Certificate funds is to have the funds transferred to any existing Navy Fed checking, savings or Money Market Savings account (MMSA). There is a 21 calendar day grace period following maturity before the Share Certificate automatically renews.
If you plan to pull funds from Navy Fed using the ACH service of another institution, you should consider opening either the Money Market Savings account or one of Navy Fed’s checking accounts. Navy Fed has restrictions on ACH debits from its savings account. Navy Fed’s Electronic Funds Transfer Agreement and Disclosure (page 13) reads in part,
Please note that your Navy Federal savings account may only receive ACH credits. MMSAs may receive ACH credits and debits in accordance with the limitations set forth in the MMSA agreement.
When you originate an ACH transfer at another financial institution, Navy Federal places no limitations on the dollar amount of received ACH transfers, and Navy Federal does not charge fees for received transfers.
You may only originate ACH transfers at Navy Federal from your checking account. For transfers originated at Navy Federal, there is no limit on the number of funds transfers you can make from your checking account per day. However, there are minimum and maximum total dollar transfer limits associated with transferring funds to/from another financial institution via the ACH, when the transfer is originated from Navy Federal. Transfers from a Navy Federal checking account to a checking account at another financial institution may be requested for a minimum of $5.00 to a maximum of $5,000.00 per business day. However, the total aggregate amount of all checking transfers within any five-business-day period cannot exceed $15,000.
The Certificates brochure states,
Dividends that have been credited are available for withdrawal anytime without penalty. You can request to have the dividends remain in your certificate account, have them automatically transferred to your Navy Federal savings account, checking account, or Money Market Savings Account on the first of the month, or have them sent to you in the form of a check.
Beneficiaries and Trust Accounts
Unlimited beneficiaries (with assigned percentages) can be named, with name, address, DOB, and Social Security numbers required for each beneficiary. Beneficiaries can be designated in the online application or by using Navy Fed’s Payable on Death (POD) Form. For Trust Accounts, refer to Navy Fed’s Deposit Trust Accounts Form. This form should be used “to reassign or establish accounts in the name of a Legal Trust,” which Navy Fed calls a “Deposit Trust Account.”
Unlike PenFed's nearly universal membership eligibility, Navy Fed’s field of membership (FOM) is restricted to individuals who have a military connection, regardless of residency status.
As I described in a 2017 blog post, Navy Fed’s FOM has expanded and while a military connection is still required, many more people are now eligible to join. The most recent group added are individuals with family members who were affiliated with the military at any time.
The Navy Fed "Become a Member" page lists the various ways to qualify for membership.
Active Duty, Retired and Veterans – Service members in all branches of the armed forces are membership-eligible, including:
- Active Duty members of the Army, Marine Corps, Navy, Air Force, Coast Guard, and Ait National Guard.
- Delayed Entry Program (DEP)
- DoD Officer Candidate/ROTC
- DoD Reservists
- Veterans, retirees, and annuitants
Family Members – Individuals with parents, grandparents, spouses, siblings, children (adopted and step-), grandchildren, or household members who at any time were affiliated with the military or are already Navy Fed members are also eligible to join. As stated on the Membership FAQs page,
In addition to the personal information you'll need to supply for yourself, you'll need to provide your sponsor's last name, Access Number and relation to you (i.e., spouse, grandfather). If you're unsure of their Access Number, you may use the last 4 digits of their Social Security Number and their date of birth.
Department of Defense (DoD) Civilians – Any DoD civilian employee, U.S. government employees/contractors assigned to DoD installations, and DoD retiree/annuitants are welcome to apply.
Joining Navy Fed and/or opening a Certificate Special can be done online or at any of 337 branches located in 30 different states and the District of Columbia.
FYI – Navy Fed does not pull your credit report when opening a Certificate.
A balance of at least one share ($5) is required to establish and maintain membership.
Credit Union Overview
Navy Federal Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.90% (excellent) based on September 30, 2022 data. In the past year, Navy Fed has increased its total non-brokered deposits by $9.49 billion, an excellent annual growth rate of 7.54%. Please refer to our financial overview of Navy Federal Credit Union (NCUA Charter # 5536) for more details.
Headquartered in Vienna, Virginia, Navy Federal Credit Union is considered the largest credit union in the world. Founded in 1933 as the Navy Department Employees’ Credit Union of the District of Columbia, Navy Federal has grown from its initial seven members to more than 12,100,000 members and assets in excess of $156 billion.
How the 15-Month Certificate Special Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide and have minimum deposit requirements of $10k or less, only one credit union has a higher rate than currently offered on the Navy Federal Credit Union 15-month Certificate Special. The following table compares the 15-month Certificate Special to the two highest-rate CDs from other credit unions and the two highest-rate CDs from banks.
The above information and rates are accurate as of 1/9/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
"Limit one Special 15-Month Certificate (Share Only) per member. This offer, including the stated Annual Percentage Yield (APY), is effective as of January 9, 2023. Navy Federal reserves the right to end or modify this offer at any time. Excludes IRA and ESA certificates. The Special 15-Month Certificate (Share Only) has a $50 minimum balance and a $250,000 maximum balance. Additional deposits are allowed at any time, subject to the maximum balance. Dividends earned are not included in the maximum balance allowed. Once the promotional rate is applied to a purchased certificate, it will remain in effect for the length of the product term. Penalties apply for early withdrawals from certificate accounts. Other restrictions may apply."
I opened 1 15-month CD with $50 yesterday. if I close the CD now. Can I open another one?
YES . . . In the process of attempted account opening, Navy's own link to fund your new 15-month add-on CD via an external pull — "Transfer from another institution" — does not appear to be working. This from an existing customer, with existing links to existing external accounts.
I got a letter from them once when I set up an external link to my savings account from an FI that used trial deposits (2 credits and a debit). They said that they do not allow debits to that account from external FIs but allowed it that one time as a courtesy. Who knew?!
You may want to consider calling them instead of opening an account online unless you already have the money to fund it with in a liquid NFCU account. That may be the only way you can arrange the funding. And PS they might tell you they can only fund it from an external checking account not a savings account. I have had them tell me that. Just try to figure out their ACH policy! Guaranteed to drive you nuts.
EDIT: Regarding the information about ACH transfers above in the blog post. I scanned it and don't think this was mentioned. My understanding from prior conversations with NFCU CSs is that if you are pulling from an NFCU checking account from an external FI, there is no dollar limit on the NFCU end (may apply to their MM account too I never asked). I have never tested this, but hopefully it is correct. Otherwise you are stuck with doing a wire or a check for amounts over $5,000 per business day or $15,000 per 5 day period (useless for large amounts).
Great marketing, and still actually delivering some value while protecting themselves at the same time. They know where the line is.
5.00% 15-Month Certificate Special (EWP=90 days) Pasadena Federal Credit Union
BUT Ken states on the PFCU page for the details:
According to CSR, the Early Withdrawal Penalty for certificate terms greater than one year is the lesser of 180 days dividends or all earned dividends on the amount withdrawn.
Just a heads up in case someone is considering the EWP ... I am not sure which is correct; 90 or 180 for PFCU
But golly gosh I do wish this 5% APY CD were available for IRAs. And I hope in not distant future they relent, reconsider, and allow such IRA CDs, too.
And during that time, it spiked to over 20%.
If that pattern repeats, you'll probably be better off with 15 months.
In the current rate environment, what do you call an add-on 5% 13-month CD with a $50 minimum, at an extremely strong and popular FCU, offer good through April? A No-Brainer!
But - 1) $250K max. cap (for principal), 2) Offer could be pulled early, 3) Only 1 per customer, 4) non-IRA only.
But - maybe the “1 per customer” rule really DOESN'T really apply right now because Navy ALSO currently has in place a policy (which they define as “temporary”) whereby a CD can be closed without EWP for another CD with a greater maturity date?
But - maybe that “temporary” policy DOESN'T really apply to CDs that Navy has called both “Special” and “1 per customer”?
There are more “buts'” here than old Seymour Butts himself saw under the bleachers! More butts than brains? You be the judge! Everyone needs to look at this offer from their own perspective.
I am a bit gun shy after, couple of months ago at a local CU where I am a long time member and where I had wired in a large amount of money, I sought in person to open a very attractive CD and was (at first) flat out denied because of ChexSystems. It took the personal intervention of the branch manager there to override that foolishness.
I'm also a long timer at NFCU. But no way am I able to show up in person. So the ChexSystems menace remains in the back of my mind as a looming, shadowy threat to any sort of online banking (account opening) activity. Feel fortunate NFCU apparently does not buy into the ChexSystems BS. Praise to NFCU for that.
Move available (no EWP) dividends on a bunch of NFCU 3.5% CDs into the new 5% CD. It's quite a lot of money. Course you have to telephone them to accomplish this. Oh, well.
I am opening this cd with 1000 and will add if rates dont go higher. I also have that 3.25 special cd that I opened a few months ago in case rates started going down
I think so, though I have not as yet made the move. But the 5% CD has no requirement for "new" funds. And NFCU dividends (interest) always are permitted to be withdrawn without penalty. I was sort of putting those two items together. We shall see.
"Move available dividends on a bunch of NFCU 3.5% CDs into the new 5% CD." Since there is approximately 18 months till maturity, have you considered to negotiate a higher rate with Navy FCU, with no EWP? It is possible to move to an 18 month @ 3.90% or a 24 month @ 4.25%, with a reduction in an EWP from 365 days to 180 days. Also, this would be a great time to determine if Navy Federal would charge you the full 365 EWP and reduce the principal for the entire EWP. If Navy Federal does not reduce principal, then you might not have an EWP at this time, if you obtain the closing withdrawal on the 5 year CD's.
UPDATE: see comment from SamFam. Navy FCU is negotiating and closing 24 month CD's with no EWP and opening and/or adding to the 15 month 5.00% special.
What if, by the time the 5% CD matures, rates have plummeted to 1~2%? Wouldn't it have been better to have retained your 4.x% for an additional eight months? [Jan-minus-Dec: 23 months remaining – 15 months @ 5% = 8 months] . . . Unless, of course, you need all that cash back in 15 months :-)
Another consideration to throw into your personal equation is about topping out the Navy 5% add-on CD at $250k. If, coming down the pike, you've got more to invest beyond that, it might also be better to leave that 4.x% in place, untouched.
In my case, for example, I've got a sizable 14-month CD maturing at Langley in March, with a not-so-exciting 1.25% APY. [It was competitive, and felt compelling, a year ago.] I'm looking forward to routing the matured balanced over to my NAVY 5% add-on, and need to leave room for it! (Given the $250k cap, converting the 4.x% over would not allow this.) So my plan is to leave both 4.x% (24 months) & 5% (15 months) running concurrently.
Moral of the story: 'Tis a matter of individual budgeting, and a single, one-size scenario may not be for all.
SamFam should open a new 24month add-on CD at 4.15%.
The reason for my post, was to inform everyone that NFCU will forgo the early withdraw penalty even when one reinvests in a cd maturing sooner than the one previously held. My understanding from reading the posts here, was that they would only do it if one reinvests the funds in a CD of a longer term. For me they did it even when I went to a lesser term.
Other than that, I agree with everything you state, except, I seriously doubt that in April of 2024, when this CD matures, we will be at 1-2%. Even if that is the case, the percentage of total liquid assets that are invested there, will not break the bank. ;-)
Thank you for all of your posts! Depending on the amount invested, I believe that there are some investors that will move the balance to the 15 month CD @ 5.00% and withdraw most of it in one day (EWP one day of interest earned) to take advantage of an opportunity to reinvest at another institution for a longer term. For example, if you withdraw $249,950.00 from the 15 month CD, after one day of opening it, the EWP is approximately $34.72. If Navy FCU enforces the minimum 7-day EWP, that is approximately $243.04. You could leave $50.00 to keep it open. Remember, the EWP is the lesser of interest earned since inception or 180 days of interest. Of course, it is up to each investor, to decide if they should invest for a longer term and at the appropriate rate. Also, an investor, could decide to leave in money market funds at this time. I just wanted to share my thoughts on how to accomplish a lower EWP at this time.
NavyFed doesn't offer a 24mo Add-On as far as I know SouthernGirl (just a locked 24mo) but if it doesn't have to be Navy (for the EWP waiver) then MACU has a 24mo Add-On (100k max) at a better 4.75% right now -- super easy to join and set up. And if you REALLY want, you can open MACU w/$5 (and $10/mo) but put the rest in a Navy 15mo 5% now, then when Navy matures in 15 mos, move it to MACU's 4.75% Add-On for the remaining 9 months.
But sometimes it pays to just take the penalty when rates are higher elsewhere.
One example is Navy's 33mo Add-On from last summer, which was 3.3%, with about 29 or so months left now.
You can move it to a 36mo @ Navy for 4.2 w/o the EWP right now, but if you need the funds maturing around the original maturity date you can also just pay the penalty at Navy and move the funds elsewhere, as there are places offering rates around 4.6% for a 30mo right now, and any EWP you pay will also normally be tax deductable come tax time as well. Just do the math to see what's best for you.
Mountain America CU 24 month add-on has a maximum balance of $100K.
My comment was based on racecar's comment #37, "for the same 2yr add-on" and pointing out the difference of maximum balance of $100K, even though the rate is higher.
I had about the same amount of time left on my old CDs to maturity as the new 15mo. CD.
Thanks for sharing the tip! Have you decided that you will leave the $250K invested for 15 months? Is there a possibility that you will withdraw the funds with an EWP of one day of interest ($34.72) and reinvest with another institution for a longer term? Remember, the EWP on the new CD is the lesser of interest earned or 180 days of interest. You can leave the 15 month add-on CD open with $50.00. Please share your thoughts.
I have an IRA CD maturing next week at Navy, trying to find a new home for it. Navy is only offering 4.25% for 5 years.I would like to stick with brokered CDs, but right now they are not competitive. Any ideas?
I asked them about IRA’s specials but no luck on that front. Langley has a 29 month 5% deal that I am considering.
Please see my comment on Unify Federal Credit Union 15 month 5.00% CD on Chat with CSR in reference to EWP = three months of interest.
One of them (other than Navy) I think allows add-ons in the first thirty days.
SouthernGirl, that's interesting what the member rep said at Unify. Generally, even if it's true they typically would never admit to it.
For those with the Navy 33mo Add-On @ 3.3% from August, with about 29 months left:
If you don't mind it maturing later you can have Navy move it to a new 36mo CD (or longer) at 4.2% without penalty.
But if you need the maturity to be around the same original time, two places with excellent 30mo CD rates now are: Crescent Bank (4.65%, easy, online, open to all) and EFCU (4.6%, limited membership), both 180 EWP. There are probably more but it's hard to search for 30mo CDs on DA! At these rates, it pays to just take the EWP from Navy (which won't even be 180 days since the CDs are only 4-5 months old) and move the funds elsewhere (plus EWP is normally tax deductable).
I wish Navy offered 30 mo CDs and 4yr CDs (for some reason they skip 4yr CDs)...
Choice: a 7yr Navy IRA @ 4.2 isn't a bad idea, I was toying with it as well. Rates will probably remain high for a while but you never know, and 4.2% for just 1K isn't bad as insurance if rates ever lower and Navy keeps allowing IRA Add-Ons. I may do it as well w/just the minimum.
I agree with that plan. However, I would add a 24 month IRA add-on CD for $50.00 @ 4.15% and move one year IRA CD into the two year IRA CD. This makes since for those that need to take a regular distribution, between the one year and the three year period.
So now that we're in 2023, can anyone actually confirm that the older Navy IRA policy still holds? I trust Navy CSRs more than most, but an adage of one of my favorite Presidents, “trust but verify”, is always relevant.
That's not to say that there aren't other, different issues, possibly with other FIs, that have not been nearly as publicized (and are also more vulnerable to shutdown). On those issues, perhaps “discretion is the better part of valor”.
But in all seriousness, there is a “spectrum” to this stuff - things that may make people money, but may also upset the FIs. My own opinion is that those items that are both less well known AND more vulnerable to shutdown, should perhaps be handled only via PM.
(Edit) P.S. - I saw your comment #70 before you deleted it. Seemed pretty innocuous to me! Have a good night.
OH Yeah ! Great ! Make sure it takes a Blood Oath.
A Secret Society just as in the old days at Fat Wallet.
No bother to me.I was a pollywog back then.
Think it made the forum a lesser community .
Berating an open commenter "leaking" a tidbit
once in awhile.
All in all it was a good web site.
As per John19, today is the LAST DAY to move longer CD's with lower rates to Navy FCU 5.00% 15 month add-on CD with no EWP!!! As a reminder, today is the LAST DAY to open Navy FCU 5.00% 15 month add-on CD with a $50.00 deposit!!!