Navy Fed Adds 5-Year Certificate Special
May is Military Month. To mark the occasion, Navy Federal Credit Union (Navy Fed) has added two Certificate Specials: a 5-year (3.00% APY) and an 18-month (2.25% APY). Both can be opened with a $1k minimum deposit, with no stated balance cap. Unlike past Navy Fed Certificate Specials, additional deposits are not allowed.
Note: While the promotion page states "Minimum deposit $1k up to $100k," the fine print reads, "No maximum purchase amount." The fine print also lists minimum deposits of $1k, $10k, $20k, $50k, and $100k, but the Certificate Specials do not have tiered APYs.
The Certificate Specials are also available as IRAs (Traditional, Roth, SEP, ESA), earning the same APYs with the same funding requirements.
I have to admit, I’m a bit disappointed with the Certificate Specials. Some of DA’s readers are more than a little disappointed, as indicated by their comments. Sometimes reality just can’t match our hopeful anticipation of more deals like the now-expired 32-month IRA CD Special (2.75% APY) or the 15-month CD Special (2.25% APY), which ended some time ago.
As stated in Navy Fed’s Certificates brochure, the Early Withdrawal Penalty reads as follows:
Certificates with a term greater than one year: Forfeiture of all dividends on the amount withdrawn for 180 days or since the date of purchase or renewal (whichever is less).
Certificates with a term of five years or greater: Forfeiture of all dividends on the amount withdrawn for 365 days or since the date of purchase or renewal (whichever is less).
Availability
Not to be confused with PenFed's almost universal membership eligibility, Navy Fed’s membership is strictly for individuals who are connected to the military, regardless of where they reside.
Navy Fed’s "Become a Member" page has a series of questions to determine membership eligibility.
You must be able to answer "Yes" to one of the following questions to qualify for Navy Federal Credit Union membership.
- Are you or have you ever been affiliated in any way (includes Active Duty, reservists and retired personnel) with the Armed Forces, DoD, Coast Guard or National Guard?
- Do you have a family member (grandparents, parents, spouses, siblings, grandchildren, children and household members) who at any time was affiliated with the military?
- Do you have a family member (grandparents, parents, spouses, siblings, grandchildren, children and household members) who is already a Navy Federal member?
Joining Navy Fed and/or opening a Certificate Special can be done online or at any of 312 branches located in 30 different states, the District of Columbia, and Guam.
Credit Union Overview
Navy Federal Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 6.66% (excellent) based on December 31, 2017 data. In the past year, Navy Fed has increased its total non-brokered deposits by $7.12 billion, an excellent annual growth rate of 12.77%. Please refer to our financial overview of Navy Federal Credit Union (NCUA Charter # 5536) for more details.
Navy Federal Credit Union is considered to be the largest credit union in the world. Headquartered in Vienna, Virginia, Navy Federal has grown from its initial seven members in 1933, with more than 7,500,000 members and assets in excess of $90 billion.
How the Certificate Specials Compare
When compared to the 183 similar length-of-term CDs tracked by DepositAccounts.com that require a similar deposit and are available nationwide, Navy Federal Credit Union’s 5-Year Certificate Special APY currently ranks second.
When compared to the 156 similar length-of-term CDs tracked by DepositAccounts.com that require a similar deposit and are available nationwide, Navy Federal Credit Union’s 18-Month Certificate Special APY currently ranks seventh, 25 bps behind the term category leader.
The above rates are accurate as of 4/30/2018.
To search for the best CD rates, both nationwide and in state specific, please refer to our CD Rates Table page.
The situation reminds me of the gasoline price. When it is going up, all the stations change their prices upward virtually overnight. OTOH when gasoline prices are generally falling, our cost at the pump declines only EVER so slowly.
Now interest rates are generally rising, but the financial institutions are resisting with every fiber of their business beings. All we can do is try to wait them out. It's a safe course so long as interest rates do not change direction. And so far, at least through June, interest rates appear destined to continue going up.
5 year treasury yields have risen 50 basis points this year. Much like CDs.
I think the hype on this board is confusing people.
https://fred.stlouisfed.org/graph/?g=jFbg
This is a graph of 5-year Treasuries vs. 5-year average bank CD rates. (I also added the Fed funds rate for reference.) The 5-year rates tracked pretty well until about 2013. Since then, the 5-year CD rates have risen much less than Treasuries.
Depositaccount.com's 5-year CD rate graph looks a little better than the FRED graph, but still only up about 0.2% this year.
Keep in mind, the rates we are accustomed to see on this website represent the highest available in the US. So only about 20 out of over 10,000 institutions are currently offering a higher 5-year CD rate than the 5-year Treasury, even though Treasuries are safer and much more liquid than CDs. I would say this is pretty sad.
It would be interesting to find out what caused CD rates and Treasuries to diverge around 2013. Excess bank deposits really began to ramp up at that time.
The chart you have has fundamental flaws. First, the 5 year CD starts Nov 2009. Not helpful when everything changed in 2008.
Second, the average rate is not helpful. Is this a simple average or a weighted average?
And yes indeed, the bottom 90% of the population could lose all their savings and banks would still have excess cash. This is a systemic change with wealth inequality which is not going to get better.
Secondly, CD rate trend charts are not easy to come by. I'm giving you the most authoritative data I could find. If you have better data, please share. Regarding the average, you can find it in the footnotes to the chart; it is a simple average. Would a weighted average be more representative? Of course, but please find that weighted average data for me. (I don't think it will show a lot of difference regarding the trend or magnitude of CD rates.)
Which interest rates do people think are rising faster than CD rates?
Your graph is not interesting because it starts in 2009. I am not going to look for better data because I don't care, and I don't think it is relevant. CD rates are rising, along with Treasuries.
There are numerous anomalies, including that long term rates are rising slowly, and foreign junk bonds yield less than US Treasuries. However, there are reasons for these also.
Indeed, when people complain about CD rates not rising, they are referring to the CD rates listed here, in this case, Navy Federal Credit Union.
They are not referring to "average" CD rates.
The slow rise of the long-term rates is not an anomaly, it's normal for this point in the interest rate cycle (I can show you another uninteresting graph for this one, if you're interested.) I'll agree with you that the low foreign yields may be anomalous, but it could also be a reflection of foreign countries being at a different stage in the interest rate cycle or economic cycle.
From Navy we expect Aircraft Carrier size rates.
I bring this up only because the description in the post is misleading if I'm right (that no Add-on funds are allowed for the non-IRA version -- but I'm assuming Add-on funds are allowed for the IRA version, like all their other IRA CDs).
Personally I'll pass on this though, since I opted for the 4% Sharonview (and 3% for a 5-year is more and more common now).
What I tried to say is that the "no Add On" part of this CD is probably only for non-IRA CDs. If one wants to open up the IRA version of this, Navy usually allows you to add on new funds (up to your max allowed contribution) to their IRA CDs each year during the Jan 1 - April 15th period.
Buggy website tonight...
Both of these credit unions have engaged in a ****ing contest to get bigger for bigger sake, leaving less money on the table to give back to members like they have historically.
I’ve passed on critical remarks to both groups, but unless other members also do so, I’m guessing the days of getting nice rates from these two outfits is over.
I suppose maybe PenFed and NFCU's field of competition has changed? Instead of competing with other CUs and community banks, maybe their main competition is large banks which have low CD rates?
I don't much need to go nuts over every .25 point, I will be pulling down around 8K a month starting June, and spending 600, with those poor 3% CD's still sitting there. 3 till 21 and 2 till 23, with the other to be announced in July as I said.
So I don't need to run all over the web, stack coins, bag silver, dabble with the market (which I know little to nothing about and could care less) mess with art or other "old" stuff, or try to juggle 100 different credit cards .
I have my system and I stick to it, haven't listened to any so called "financial advisor" or what ever in my life, just saved my nickles and dimes, and lived a low ball life, I been around the world 2 times, and don't need or have any desire to go cruising or traveling.
Even with good health I won't have much more than another 20 to 25 years if lucky as it is, although I still lift 5 days a week and to aerobics 3 days.. And if I need some worthless nursing care in the future, well hell by than money really won't much matter either, or stacks of gold, or silver. And the vampires can suck whats left, I can't take it with me, smirk.....
To Just CD savers, happy saving :)
And with NO earned income, I don't qualify for any IRA anyway........
I also don't like doing business over the web when it comes to managing MY money, I like to see a real person face to face in case things go haywire if all you have is some web site or a phone number in some off the wall state.
I don't have any state tax being deducted from my military retirement so I end up paying est tax to the state on that plus the CD interest. The fed is the same although they do take fed tax out, but not from my SS, I just have part B taken from that on both.
BTW to those that lived close to that CU that had the 4% CD deal, good for you, I would have taken that too if I were near it.
But thanks for the concern.
I will be yanking out a large amount from Penfed in a few days. What will I do with it?
Vanguard does not offer any bonuses. I am already swapping some money over to Edge for a bonus.
What broker will give a nice cash bonus for $100k+?
I like the idea of holding the CDs at my broker too.
With foresight like that, odd they choose to try to make money peddling CDs, instead of trading interest rate futures.
SNEAKY!!