Patelco CU (CA) Adds 75 Basis Points To 60-Month CD


Deal Summary: 60-Month Certificate, 2.75% APY, $1k minimum deposit

Availability: Residents of ten Northern California counties and twelve named Northern California cities; employees/retirees of 1,100+ SEGs

Patelco Credit Union (Patelco CU) started the week by raising the rate on its 60-month Certificate (2.75% APY). The minimum opening deposit is $1k, with no stated balance cap. Monday’s 75 basis point increase was the largest rate change for the 60-month Certificate ever, and the new 2.75% APY is highest in seven years.

2.00%$1k-Patelco Credit Union60 Month CD
2.00%$500-Patelco Credit Union60 Month IRA (Traditional, Roth, CESA)
Accounts mentioned in this post. Rates as of December 17, 2017.

The 60-month Certificate is also offered as an IRA (Traditional, Roth, CESA) earning the same APY, but with an opening deposit of only $500.

As stated in Patelco CU’s Ask A Question page, the Early Withdrawal Penalty reads as follows:

The penalty for early withdrawal on a CD is 90 days loss of interest, or less if the CD has been open for less than 90 days.
Certificates that are 48 months or more are subject to a 180 day penalty.

DA reader, cumulus, pointed out in his Forum post,

As Ken's EWP calculator will tell you, the effective APY's on these CD's are excellent;
attractive "parking spots" for those awaiting/expecting rate hikes in these time frames.

Here’s what those “excellent” effective yields look like:

    2.43% APY, closed at 4 years

    2.31% APY, closed at 3 years

    2.08% APY, closed at 2 years

    1.85% APY, closed at 18 months

    1.37% APY, closed at 1 year

In addition to being easy to use, DA’s Early Withdrawal Penalty Calculator, breaks down the effective APYs on a month-by-month basis.

3-Year CD

Patelco CU continues to offer a very competitive 3-year CD (2.00% APY), which I wrote about in this February blog post. Since this 3-year CD has an early withdrawal penalty of only 90 days of interest, the 3-year CD has effective yields that are higher than the 5-year CD, when closed before 14 months.


Headquartered in Pleasanton, California, Patelco Credit Union’s field of membership (FOM) is primarily residency and employment based.

DA readers may remember that in the past membership in Patelco CU was open to virtually anyone, but that changed almost two years ago. I have to admit that every time I check out Patelco CU’s website, I hope I will be pleasantly surprised to see an easy membership requirement; I’ll keep hoping.

Community: Individuals who live or regularly work in the northern California counties of Alameda, Contra Costa, Marin, Napa, Sacramento, San Francisco, San Mateo, Santa Clara, Solano, or Sonoma are eligible to join.

Residency: Individuals who live, work, worship, or worship in the California cities of Atwater, Auburn, Bakersfield, Eureka, Laguna, Los Banos, McKinleyville, Merced, Rocklin, Roseville, Santa Cruz, or Tracy also qualify.

Employment: Employees and pensioner of any of 1,100+ associations, trade groups, chambers of commerce, or federal government agencies (including AT&T and Walgreens) also qualifying for membership.

Education: Students attending University of California Berkeley, San Francisco State University, and California State University East Bay are eligible to join. Members of the San Francisco State University Association or the California State University East Bay Alumni Association also qualify.

Relationship: Family members or roommates of current Patelco members are eligible to join, as are minor children or surviving spouses of a deceased employee/pensioner eligible for membership.

Joining Patelco and/or opening a Certificate can be done online, or by visiting any of 37 California branches located in Berkeley, Brentwood, Campbell, Castro Valley, Citrus Heights, Concord, Daly City, Danville, Dublin, Elk Grove, Fairfield, Folsom, Fremont, Hayward, Lafayette, Livermore, Milpitas, Novato, Oakland (2), Pleasanton (2), Redwood City, Rohnert Park, Roseville, Sacramento, San Bruno, San Francisco, (2) San Jose, San Leandro, San Mateo, San Ramon (2), Santa Clara, Santa Rosa, and Walnut Creek.

Credit Union Overview

Patelco Credit Union has an overall health grade of "A+" at, with a Texas ratio of 2.86% (excellent) based on December 31, 2016 data. In the past year, Patelco has increased its total non-brokered deposits by $670.16 million, an excellent annual growth rate of 16.44%. Please refer to our financial overview of Patelco Credit Union (NCUA Certificate # 68579) for more details.

Patelco Credit Union was established in 1936 with only $500 in assets. The Credit Union’s name is derived from its original members: employees of Pacific Telephone and Telegraph Company (now part of AT&T). Patelco Credit Union has grown to become California’s sixth largest credit union, with more than 307,800 member and assets in excess of $5.4 billion.

How the CD Compares

When compared to the 223 similar length-of-term CDs tracked by that require a similar minimum deposit and are available within the FOM, Patelco Credit Union’s 60-Month CD APY currently shares the top spot with Mountain America Credit Union’s 60-Month Term Deposit.

*Note: Melrose Credit Union is currently operating under an NCUA conservatorship.

These rates are accurate as of 3/29/2017.

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

Saver   |     |   Comment #1
This is a great rate and also a very good and helpful credit union !
Very helpful and professional.
Bozo   |     |   Comment #2
Nice to see. Hope it lasts. A more esoteric question is whether the "no EWP for withdrawals from IRA CDs for folks over 59 1/2" (per the members' handbook) will apply if I walk in and ask to swap my current IRA CD (5-yr at 1.95%) for the new IRA CD, at 2.75%. I assume it will raise a few eyebrows in the home office. While technically an indirect rollover (they cut me a check, I then deposit same, one such transaction every 365 days), I suspect a few eyes might roll.
Bozo   |     |   Comment #3
Practice pointer. For folks over 59 1/2 opening IRA CDs, wrap your arms around the Members' Handbook, which is essentially the Truth in Savings disclosure. As I recall, the "magic language" regarding no EWP for withdrawals from IRA CDs for folks over 59 1/2 appears on page six.
jimdog   |     |   Comment #4
Just looked at the "magic language" and not sure I like the wafer bit "at our discretion", still a great rate. Anyway, here is the wording, "the penalty may be waived at our discretion if (a) you close an IRA Certificate within seven days of opening it, but only to the extent the penalties would invade principal (you will pay any penalties that will not invade principal); (b) you withdraw funds from an IRA Certificate after reaching age 59-1/2 or you withdraw funds from an IRA Certificate as part of a Required Minimum Distribution after reaching age 70-1/2.
LuvCD   |     |   Comment #6
Do some test withdrawals and see what they a record for longer term CDs...that will define by action what the provisions mean...should work... Generically... If things go really south paying a penalty is a no brainer to get the funds out of "other" financial institutions.
Bozo   |     |   Comment #8
IRS regs permit only one indirect rollover per 365 days, so it's more like a test "withdrawal". That said, I am tempted. No harm, no foul. If Patelco were to reject the withdrawal (after all, it is discretionary), I'd be no worse off than if I hadn't tried. I don't think they could kick me out of the credit union for trying to withdraw my money.
Bozo   |     |   Comment #9
Jimdog, the operative language is in sub-paragraph (b). While I don't think the verbiage is ambiguous, it does say what it says. I appreciate the discretion involved, but "you withdraw funds from an IRA Certificate after reaching age 59 1/2" seems quite straight-forward.
LuvCD   |     |   Comment #10
The operative language is the discretion language which is not (just) part of (a) but is in the lead-in to (a) and (b)
Simion   |     |   Comment #5
Good question, let us know how it turns out....a 2.75% for a 1.95% seems like a no brainer. And later, maybe a 3.25% for a 2.75% and then later, later maybe a.........
Bozo   |     |   Comment #11
Simion, with but one indirect rollover allowed per 365 days (as I read the IRS rules), options are limited. One option I am considering is moving two maturing PenFed IRA CDs to Patelco this year, even though such a move would exceed my IRA NCUA limits (serious understatement).

As PenFed has continued to eviscerate its 5-yr rate, the "delta" currently is 70 bps, enough to get my attention.
Simion   |     |   Comment #12
Same boat as you, Bozo. I've got a fairly large PenFed 7 yr 3.69% IRA CD coming due in August and doubt if I will be able to get a rate anywhere close to that. So, will be looking around and Patelco might turn out to be a good option. It's been a quick 7 years.
lou   |     |   Comment #22
Bozo, why not have Patelco do a transfer from your existing CD to a new one at the higher rate? You are allowed an unlimited number of transfers
tck   |     |   Comment #7
Been with Patelco for almost a year now. I like them. Great service, great website and app. Awesome to see them raising rates.
RetiredNC   |     |   Comment #13
I would like to utilize this rate in my CD ladder. Any way to qualify for membership other than reside/work/worship/school in the specified California areas or employed / pensioner with the listed companies or organizations? Any organizations we can join to be eligible?

Although I could not locate a list of qualifying companies, trade groups, organizations, etc., you can type in a letter or portion of a word within the online application form under Eligibility, and a list will appear of every qualifying organization containing that letter or combination of letters. It will give some idea of who may qualify.

The CSR told me that only employment by the organzation (or presumably being a pensioner) would qualify. However, the inclusion of trade groups and associations causes me to question that. I was able to see that the Sierra Club qualified. Again, employees only? The Sierra Club's website did not tout Patelco Credit Union as a benefit of membership; it was noted, however, as an employment benefit.

The CSR also stated that they change their rates, if at all, on Fridays. So, we may have at least another full week to apply. Was unable to reliably determine at what point in application for an IRA CD that the rate locks. I'm seeking to make a trustee-to-trustee transfer of an IRA from my brokerage, which can be time-consuming and beyond my control. The very inexperienced CSR to whom I spoke said that I would have 10 days to complete the transfer.
Bozo   |     |   Comment #14
RetiredNC, without an iron-clad shoehorn for membership, you might be wasting your time. Having done a custodian-to-custodian transfer into Patelco, you really do need to be a member for the transfer to take place. The transfer needs a "vessel", and the vessel will not exist unless you are a member.
LuvCD   |     |   Comment #15
NC...A family member of a member can join...I have a lot of people in my "family ". ??
Bozo   |     |   Comment #16
LuvCD, OMG, think "Hillbilly Elegy". Are you proposing everyone in Appalachia can join? Of course, parentage is a slippery slope, as is residency. Were I to propose "gaming" Patelco's membership, which I would never do, I would simply say I was a resident of a homeless shelter in Concord, CA. Bang, you're a member.

Once a member, you could claim the fantastic interest rates allowed you to move to more permanent quarters. After all, "once a member, always a member".

Last I checked, Patelco had no restrictions on potential members being homeless. They merely needed to be "residents".  

California has rather loosy-goosy laws on residency. If one really, truly, wants to join Patelco, then grab a sleeping bag, head for a homeless shelter, declare yourself a resident, borrow an on-line connection, and join. A week later, of course, you can un-declare, renounce your residency, and go about your business.
LuvCD   |     |   Comment #17
May want to vote at least once
Bozo   |     |   Comment #18
PS: California law on "residency" is somewhat opaque. If you want to declare as a resident, well, that's fine and good. I suspect you might do so by applying for homeless benefits, right about the same time you applied for Patelco membership.

For your joke of the week, California Courts have held that a primary indicator of residency is applying for or obtaining benefits restricted to California residents.

LuvCD   |     |   Comment #19
Easier to "bribe" a family member that qualifies by paying their membership fee...obviously they are not chasing CDs or they would hopefully been calling first.
!!!   |     |   Comment #20
Are you people that desperate just to join a particular credit union? You may need more financial planning help than you realize.
LuvCD   |     |   Comment #21
Some rate chasers like the challenge...and, yes, if a particular cu meets their (individual) criteria why not give it a chase (that was not a plug for the non-cash Bank by that name). For example, I was looking at GECU a while back but other CUs have increased their rates and GECU is passé
Bozo   |     |   Comment #23
LuvCD, while I agree rate-chasing can sometimes resemble obsessive-compulsive disorder, for the most part, it's a harmless hobby. Some folks clip coupons (saving on the spending side of the ledger), others chase the best deposit accounts (earning more on the deposit side of the ledger); some do both. The irony (and I can only assume it's ironical), is that folks who do the latter (chase rates) often do not really "need" to chase rates, they do it (as you mention) for the hunt.

For example, did wealthy English noblemen chase foxes in order to eat them? Of course not. They did it because they could, and then to brag they'd treed a fox.

Do DA readers chase rates because they really, truly, need the money to make ends meet? As with the fox-hunters, my suspicion is they don't. The thrill is in the hunt.

Where bragging rights consist of a few bps in an obscure ad in a local newspaper by a credit union with easy membership, we are all fox-hunters.

Is that so bad?
LuvCD   |     |   Comment #25
Bozo, nope but for !!! above it may be
as anonymous as they get
as anonymous as they get   |     |   Comment #24
I didn't notice this before, but there is a footnote in both their rate chart and their CD page that says the following:

"Only one 60-month Share certificate and only one 60-month IRA Certificate per IRA type."

Beware of this if you were planning on opening multiple certificates.
also a balance cap
also a balance cap   |     |   Comment #26
There's also a cap of $250k, which I think Ken overlooked when he said "no stated balance cap".
anonymous   |     |   Comment #27
I just opened 5 identical 60-month Share certificates in the branch.
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