Two facts about St. Mary’s Bank (St.MB) before I start talking about the CD. First, even though the “bank” is part of its name, it’s not a bank: it’s a credit union. Second, it’s the oldest credit union in the United States, founded in 1908.
I last wrote about St.MB in October 2016, when the Credit Union had three Flex CDs. St.MB is currently offering a 24-month Flex CD (2.00% APY), which can be opened with a $500 minimum deposit; there is no stated balance cap.
While the 2.00% APY by itself is not that impressive, the Flex CD offers a trifecta of bonus features:
- One time penalty free withdrawal up to 25% of the principal balance.
- One time rate upgrade during initial term.
- One time additional deposit during initial term not to exceed original deposit amount.
If an additional withdrawal is done or the first withdrawal exceeds 25% of the principal balance, the Early Withdrawal Penalty, as stated in St.MB’s Account Disclosure read as follows:
If your account has an original maturity of 12 months or longer:
The penalty we may impose will equal 18 months interest on the amount withdrawn subject to penalty.
How Valuable Are The Options?
The limitations on the penalty-free withdrawal and on the additional deposit are significant shortcomings. DA reader and contributor, Charles Rechlin, has written an article about Step-Up and Step-Rate CDs, which lists some useful guidelines. A step-up option on its own might not be tempting, but in this case, the partial penalty-free early withdrawal and a limited add-on do offer some benefits. Charles Rechlin’s article, Searching for the Elusive Add-On CD, is also quite helpful in gauging the value of the 24-month Flex CD.
St. Mary’s Bank is headquartered in Manchester, New Hampshire and, if you missed my earlier comment, it’s actually a credit union that offers a very easy membership requirement.
According to the Credit Union’s FAQs,
Who is eligible to join St. Mary's Bank?
Membership is open to anyone with the purchase of one share of capital stock for $5.
Credit Union Overview
St. Mary’s Bank has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 4.59% (excellent) based on December 31, 2017 data. In the past year, St. Mary’s Bank has increased its total non-brokered deposits by $9.75 million, an above average annual growth rate of 1.15%. Please refer to our financial overview of St. Mary’s Bank (NCUA Charter # 63829) for more details.
St. Mary’s Bank is currently the third largest credit union in New Hampshire, with more than 101,500 members and assets in excess of $989 million. As you might expect from the oldest credit union in the United States, St. Mary’s Bank has an extensive history section on its website. Below is an excerpt of that amazing story:
In 1908, Monsignor Pierre Hevey, Pastor of Sainte-Marie’s parish in Manchester, New Hampshire, organized what was soon to be known as the first credit union. The goal was to help the primarily Franco-American mill workers save and borrow money. On November 24, 1908, we officially opened our doors in Manchester, New Hampshire as “La Caisse Populaire, Ste-Marie” (The People’s Bank) and became the first credit union in the nation. In April 1909, the New Hampshire Senate and House of Representatives approved a Charter to incorporate under the name of St. Mary’s Cooperative Credit Association. Transactions were conducted at the home of Joseph Boivin, the credit union’s first president, on Notre Dame Avenue.
Collateral information - I’m still not convinced with the explanation of the name. My French is not that good, so I asked my friend from Paris to help me with what I thought was a somewhat odd translation. Bénédicte agreed with me: the French word for bank is “banque,” while “caisse” translates to credit union. It’s possible the etymology of “caisse” has changed since 1908, or the two words might have been interchangeable at the time. In any event, it’s still a great story.
How the Flex Certificate Compares
About four or five months ago, a nationally 2-year CD with a 2.00% APY would generate a fair amount of interest (no pun intended). Mention the 2-year/2.00% combo today and the response might be “meh.” In fact, when compared to the 198 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are nationally available, there are 35 institutions offering an APY higher than St. Mary’s Bank’s 24-month Flex CD APY. The benefit of the Flex CD lies in its special options.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.55% APY||2-Year CD||Live Oak Bank|
|2.51% APY||2-Year CD||Colorado Federal Savings Bank|
|2.50% APY||24-Month CD||Banesco USA|
|2.00% APY||24-Month Flex CD Promo||St. Mary's Bank|
The above rates are accurate as of 3/17/2019.
To search for the best CD rates, both nationwide and state specific, check out our CD Rates Table.