Navy Federal Adds Limited Time 20-Month Add-On CD Special
Now through September 11, 2022, Navy Federal Credit Union (Navy Fed) is offering a 20-month Certificate Special (3.00% APY, $1k min/$250k max). The 20-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 20-month Certificate Special per member.
The 20-month Certificate Special was added just as the 33-month Special Certificate (3.30% APY, $1k/$100k deposit) was removed from Navy Fed’s product line. While the 20-month Certificate Special offers a rate 30 bps lower, the balance cap has been increased by $150k.
In the past few days, there were three Forum posts about the 20-month Certificate Special by DA readers, CTM, cando, and MY2CENTSWORTH, with a variety of comments added by about 15 DA readers. A recurring theme in the comments is disappointment in the 3.00% APY, but I think an insightful comment by DA reader, carolynwo, is worth considering.
While not a great rate, it does provide another $1K placeholder. Interesting that this is only available for 2 weeks. Begs the question: what/when will NFCU up their MM rates and long term CD rates, both of which have lagged miserably?
The 20-month Certificate Special is definitely a useful placeholder that can be considered a low-rate insurance policy. Let’s say rates keep rising and during the 20 month term you could have averaged 5% on that $1k instead of 3%. That’s only a loss of about $33. As one of my colleagues said in a somewhat oddball metaphor, “focusing on the 3% is not seeing the forest for the trees.”
Many thanks to all the DA readers who posted/commented on this latest NavyFed promotion.
Early Withdrawal Penalty
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Certificates with a term greater than one year: Forfeiture of all dividends on the amount withdrawn for 180 days or since the date of purchase or renewal (whichever is less).
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 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.
Earned Dividends
The Certificates brochure also 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. To designate beneficiaries, refer to Navy Fed’s Payable on Death (POD) and Deposit Trust Accounts Form. This form can also be used to open accounts under a legal trust; Navy Fed calls that type of account a “Deposit Trust Account.”
Availability
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.
Navy Fed’s "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 2.96% (excellent) based on March 31, 2022 data. In the past year, Navy Fed has increased its total non-brokered deposits by $15.23 billion, an excellent annual growth rate of 12.67%. 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 11,700,000 members and assets in excess of $160 billion.
How the 20-Month Certificate Special Compares
When compared to the Add On CDs tracked by DepositAccounts.com, which require a similar minimum deposit ($5k or less) and are not limited by a low balance cap, the NavyFed 20-Month Certificate Special APY currently ranks second.
The above information and rates are accurate as of 8/30/2022.
To look for the best CD rates, either nationwide or state-specific, please refer to our CD Rates Table page.
I agree but note that this one has a higher mazimum. (sorry, my __ key is not working so I used the z instead :)
Military families spend decades sacrificing after that day…and this credit union runs a special for 11 days that ends on that day like it is a celebration or something.
The new CEO has n military experience and it shows. They crushed other military credit unions by offering great CD rates and now they are completely forgetting who their customers—were.
Not to overemphasize, but it's an add-on CD.
For those pointing out that 1 Year+ Treasuries are currently 3.4+% - agreed! I've bought those also (sometimes even in tax-deferred accounts, where state/local tax issues really don't matter). But does a “full-fledged” investment like that really also preclude buying a “rate-insurance” add-on at a mere $1K minimum?
We went into a branch with an unusual litany of events with paperwork to back it up.