Northwest FCU's 1-Year CD Has Potential 0.25% Rate Bump

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Availability: Easy Membership Requirement

Every so often, what I think will be a good subject for a blog post disappoints me; that’s what happened as I was writing last night. Without going into too much detail, this morning’s blog post about REALTORS® Federal Credit Union’s 1-year CD has instead become a blog post about Northwest Federal Credit Union's (NWFCU) 1-year Share Certificate. While this might seem like a complete non sequitur, it actually makes sense: for the past four years, REALTORS® FCU has been operating as a division of NWFCU, with many of the same products and rates, but under its own brand and restricted field of membership.

So let’s talk about NWFCU’s 1-year Share Certificate. About a week ago, the rates on the 1-year Share Certificate were raised for the first time since April 2015: 1.41% APY, $250k+; 1.31% APY, $100k+; 1.21% APY, $1k+.

It's also available as an IRA (Traditional, Roth, CESA, and SEP) earning the same tiered APYs, with the same funding requirements.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.41*%$250k-Northwest Federal Credit Union1 Year Share Certificate
1.41*%$250k-Northwest Federal Credit Union1 Year IRA Certificate (Traditional, Roth, CESA, SEP)
Accounts mentioned in this post. Rates as of February 22, 2017.

Good rates, but what really makes this something to write about is that the rate can be increased by having a Premier Checking account or belonging to the Heritage Club (free and automatic enrollment upon age 62).

For amounts of $50,000 - $99,999, a bonus of 10 basis points will be added to the rate in effect at the time of purchase.
For amounts of $100,000 or greater, 25 basis points will be added to the rate in effect at the time of purchase.
Please note that there is one bonus allowed per Certificate purchase.

This could potentially result in three different rates for the 1-year Share Certificate:

  • 1.66% APY for deposits of $250k+
  • 1.56% APY for deposits of $100k+
  • 1.31% APY for deposits of $50k+

As stated on Northwest FCU’s Certificate Disclosure page, the Early Withdrawal Penalty reads as follows:

For Certificates having a term greater than six (6) months and less than two (2) years,
the penalty will be equal to the lesser of 180 days of dividends on the amount withdrawn
or all dividends on the amount withdrawn since the date of issuance or renewal.

Availability

Headquartered in Herndon, Virginia, Northwest Federal Credit Union offers membership to virtually anyone in the U.S., with a variety of ways to qualify:

Easy Membership: Joining the non-profit Financial Awareness Network (FAN) ($10 membership dues) qualifies for NWFCU membership eligibility.

Organizations: Members of 25 Partner Organizations also qualify for membership.

Government Employment: Employees of specific U.S. Government Agencies, including Homeland Security and CIA, are eligible to join.

Member Companies: Employees of more than 420 Member Companies also qualify.

Relationship: Family members (defined as spouse, children, siblings, parents, grandparents and grandchildren, including adopted family members) and household members (defined as persons living in the same residence who share living expenses) of any of the above groups are eligible for membership.

Joining NWFCU and/or opening a 1-year Share Certificate can be done online, or at any of seven Virginia branches located in Chantilly, Gainesville, Herndon (2), Leesburg, Manassas, and Vienna. You can also download the membership application and submit it through the mail.

Credit Union Overview

Northwest Federal Credit Union (NCUA Certificate # 5500) has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.29% (excellent) based on September 30, 2016 data. In the past year, NWFCU has increased its total deposits by $273.49 million, an excellent annual growth rate of 11.59%. Please refer to our financial overview of Northwest Federal Credit Union for more details.

Established in 1947, Northwest Federal Credit Union is currently Virginia’s fourth largest credit union, with more than 219,600 members and assets in excess of $3.1 billion. NWFCU’s philosophy of "people helping people" has been put into action through the NWFCU Foundation, which recognizes students who demonstrate leadership, dedication and commitment in school, at home and in the community, by awarding college scholarships. Since 2005, the Foundation has awarded a total of $957,000 in scholarships to 232 recipients.

How the Share Certificate Compares

When compared to the 203 similar length-of-term CDs tracked by DepositAccounts.com that are available nationally, Northwest Federal Credit Union's 1-Year Share Certificate APY (with Heritage Club or Premier Checking bonus rate of 0.25%) currently ranks first, regardless of minimum deposit.

The above rates are accurate as of 12/28/2016.

To look for the best CD rates, nationwide and state specific, please refer to our CD rates table or our new Rates Map page.

Comments
Bozo
Bozo   |     |   Comment #1
Not only is this a great catch (thanks Ken), it should be noted that NWFCU is one of the few financial institutions offering no EWP for IRA CD withdrawals for those over 59 1/2.

That said, it would appear the ideal depositor would have $250,000 in an after-tax CD coming due, from which he or she harvests interest, and where a short-term CD (i.e., one-year) is optimal, given the current interest rate environment.
Anonymous
Anonymous   |     |   Comment #2
They had a 3 year 3% cd I opened a little over a year ago.
Anonymous
Anonymous   |     |   Comment #3
The 3 year was an add on too. The max was 100k. I maxed it out after I saw all the discussion regarding Valor and them changing their add on terms.
Anonymous
Anonymous   |     |   Comment #4
I agree with Bozo that this is a good deal. Nevertheless, judging by the response here, I do not have the feeling people are jumping in with both feet.
Bozo
Bozo   |     |   Comment #9
One might suspect the "field" of folks shopping $250,000 might be a tad limited.

First and foremost, you are, right off the bat, pushing NCUA limits. Which means you either don't care (if you compound) or harvest interest. Second, the average retiree (the type of person who harvests interest) has somewhat less than $250,000 to "shop around", at least if you believe the pundits.

Bottom line: the NWFCU "offer" is real, but (for most folks) illusory. I suspect NWFCU will be more than happy to accept your money, should you qualify.
Bozo
Bozo   |     |   Comment #10
PS: If you do qualify, don't be surprised if NWFCU sells your e-mail (and other personal data) to a list which might be titled "really rich folks".
decades
decades   |     |   Comment #5
I like the 3% 3 month deal at Andrews fcu as we play the waiting game.
decades
decades   |     |   Comment #6
FLASH ! from penfed cs rep ..share certificate rates ....available Jan1 2017 7yr 2.38% 5yr 2.28% 4yr 1.87% 3yr 1.71% 2yr 1.51% 15mo.1.41% 1yr 1.36% an improvement but won't bite on anything less than 3% at this time
Anonymous
Anonymous   |     |   Comment #7
Or you can do the Andrew 7 year and if rates go up take advantage of the low EWP. Andrews 7 year closed after 1 year is 1.53%
Bozo
Bozo   |     |   Comment #8
Finding a decent parking place for after-tax for a year or so is a balancing act. I could motor on down to Alliant and plop my RMD in my garden-variety savings account (1%), buy their 1-year CD (1.2%), send it to PenFed (1.36%), or jump through hoops with a new financial institution. At a certain point, the "why bother" factor comes into play.

As it now stands, I'll probably just choose the path of least resistance and buy the Alliant 1-year CD. Even though I am a member of PenFed, dealing with their "incoming money" folks can be a pain. At Alliant, I drive to Oakland (20 minutes and a couple of gallons of gas, $5 parking), buy the CD, done.
Sylvia
Sylvia   |     |   Comment #11
With $1K minimum, you can get 1.30% APY from Palladian's promo savings account. Rate is guaranteed for 6 months. Promo is not limited to new customers or new money, so, at 6 months, you can extend rate by opening another account with funding to come from old, assuming promo is still in place. I just did this. Solid rate with no EWP to worry about.
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