Deal Summary: 2.25% APY 15-month add-on CD, Maximum deposit $50k. 2.75% APY 32-month add-on IRA CD, Maximum deposit $250k.
Navy Federal Credit Union (Navy Fed) has come out with two high-rate add-on certificate specials: a 15-month share certificate and a 32-month IRA Certificate. The 15-month share certificate has a 2.25% APY and a $50k maximum balance. The 32-month IRA certificate has a 2.75% APY and a $250k maximum balance. Both have a minimum deposit of only $50, and both have an add-on deposit feature that allows unlimited number of deposits up to the maximum balance. Of course, the IRA Certificate balance is also limited to IRS contribution limits.
|2.75%||$50||$250k||Navy Federal Credit Union||32 Month IRA Special (Traditional, Roth, CESA)|
|2.25%||$50||$50k||Navy Federal Credit Union||15 Month CD Special|
These special certificates are similar to Navy Fed’s past 17-month, 20-month and 5-month specials. Deposits can be made anytime subject to the maximum balance. Only one special 15-month share certificate and only one special 32-month IRA certificate are allowed per member. It’s actually a maximum deposit of principal instead of a maximum balance. If you specify the certificate to redeposit the interest, the balance (principal plus interest) may exceed the maximum. Only the principal cannot exceed the maximum limit.
Navy Fed has made it very easy to open these special share certificates. Existing members can open the certificate online by logging into online banking and clicking on the “open a new account” link on the top right of the account page. The quick and easy way to fund these certificates is to select the funding account to be one of your existing Navy Fed liquid accounts. Since it’s an add-on CD with only a minimum deposit of $50, there’s little reason why existing Navy Fed members should not open the special with money from their Navy Fed savings, checking or money market account. Once it’s opened, it’s easy to add money online after you log into Navy Fed online banking.
As stated in Navy Fed’s Certificates brochure, the Early Withdrawal Penalty (EWP) reads as follows:
(b) If the term to maturity is greater than one year, the amount forfeited is equal to the lesser of: (1) all dividends for 180 days on the amount withdrawn, or (2) all dividends on the amount withdrawn since the date of issuance or renewal. (c) If the term to maturity is five years or greater, the amount forfeited is equal to the lesser of: (1) all dividends for 365 days on the amount withdrawn, or (2) all dividends on the amount withdrawn since the date of issuance or renewal.
Thus, for the 15-month and 32-month certificates, the EWP is 180 days of interest unless closed before 180 days of opening, in which case it’s only equal to all interest earned. Essentially, this avoids the case of the EWP eating into the principal (losing money on the CD).
Another noteworthy feature in the disclosure is the grace period:
Grace Period: You have 21 calendar days after the maturity date to change the conditions under which the Certificate will be renewed. During this period, the balance in the Certificate will earn dividends at the prevailing offering rate.
For grace periods, 21 calendar days is on the high-end.
Thanks to DA readers who emailed me news of these specials.
In February, Navy Fed expanded its field of membership, allowing many more people to join. All veterans of the U.S. Armed Forces are now eligible. In addition, if your immediate family member had ever been in the military (even if they’re now deceased), you are eligible to join. Please refer to my February blog post for more details.
Navy Fed has an online membership application. The application guides you through membership qualifications. The first question asks:
Are you or have you ever been affiliated in any way with the Armed Forces, DoD, Coast Guard or National Guard?
Joining Navy Fed and/or opening Certificates can be done online or at any of the over 300 branches located in 30 different states, the District of Columbia, and Guam.
Note, there used to be a backdoor to Navy Fed membership through the San Diego Council of the Navy League. However, this ended in May. Joining the Navy League will no longer qualify you for Navy Fed membership.
Credit Union Overview
Navy Federal Credit Union (NCUA Charter # 5536) has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 5.44% (excellent) based on June 30, 2017 data. In the past year, Navy Fed has increased its total deposits by $6.89 billion, an excellent annual growth rate of 12.9%. Please refer to our financial overview of Navy Federal Credit Union 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, to over 7.3 million members and assets in excess of $82 billion.
How the Certificates Compare
When compared to the 159 similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide, Navy Fed’s 15-month Certificate is way out in front
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.25% APY||15-Month Special Certificate ($50 min/$50k max)||Navy Federal Credit Union|
|1.90% APY||18-Month CD ($25k min/no max)||Crestmark Bank|
|1.90% APY||17-Month CD Special ($25k min/$240k max)||INSBANK|
When compared to the 151 similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide, Navy Fed’s 32-month IRA Certificate is also way out in front
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.75% APY||32-Month Special IRA Certificate ($50 min/$250k max)||Navy Federal Credit Union|
|2.10% APY||36-Month Yield Pledge IRA CD ($5k min/no max)||EverBank|
|2.02% APY||36-Month IRA CD ($1k min/no max)||First Internet Bank|
The above rates are accurate as of 12/4/2017.