University Fed Credit Union Offers Rate-Leading 48-Month CD Nationwide
The good news – Texas-based University Federal Credit Union (UFCU) has boosted the rate on its 48-month Fixed CD to 5.00% APY ($1k minimum deposit). The bad news – UFCU is closed for Presidents Day. As soon as I have complete details, I will update this blog post.
Normally, I would not publish a blog post without first contacting a financial institution to obtain information not readily available on its website, but this is a special circumstance: finally a 5% long-term CD that's available nationwide.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 3.50% | $1k | - | University Federal Credit Union | 48 Month Fixed CD | |
| 3.50% | $1k | - | University Federal Credit Union | 48 Month Fixed IRA (Traditional, Roth) |
The 48-month Fixed CD is also offered as a Fixed IRA CD (Traditional, Roth), earning the same APY with the same deposit requirements.
As stated in the Membership and Account Agreement document (page 12), the Early Withdrawal Penalty reads as follows:
The amount of the penalty will reduce dividends paid and will equal the lesser of
(a) all accrued dividends on the certificate; or (b) 25% of dividends on the entire term.
Partial withdrawals are allowed, as long the $1k minimum balance is maintained.
Availability
Headquartered in Austin, Texas, University Federal Credit Union’s field of membership (FOM) provides a way to join for almost any U.S. citizen or resident alien who has a valid Social Security number and a U.S. address.
Easy Membership: Joining American Consumer Council qualifies for UFCU membership. This is described in UFCU's "Become A Member" page,
None of these apply to you? You may be able to join through
the American Consumer Council and membership is free.
School Relationship: Students, alumni, and employees of more than 25 colleges/universities (including Texas State University and the University of Texas at Austin) qualify for membership.
Employment/Affiliation: Employees and members of nearly 180 companies and more than 30 companies are also eligible to join.
Family Relationship: Immediate family members of current UFCU members are welcome to apply.
Joining UFCU and/or opening a 48-month Fixed CD* can be done online or at any of 22 Texas branches located in Austin (14), Cedar Park, Galveston, Kyle, League City, Pflugerville, Round Rock (2), and San Marcos.
A $1 lifetime membership fee is required along with $5 savings deposit and $25
checking deposit to become a member and start enjoying the benefits of membership.
*UPDATE 2/21/2023: According to CSR, the only option for funding when opening a new membership is a debit card transaction. While UFCU does not have a dollar limit on incoming debit card transfers, the funding institution likely does. CSR suggested a two-step procedure may be the best approach: open a CD after the new membership application is approved, using any of the funding methods describe below.
Account Opening
Funding and Other Details
UPDATED 2/21/2023. As soon as I talk to a UFCU representative on Tuesday morning, I will update this section.
- Funding – After membership application is approved, ACH, wire (no fee) or Shared Branch transaction.
- CO-OP Shared Branch Participant – Yes.
- Dividends – Compounded/credited monthly. Cannot be withdrawn penalty-free.
- Maturing Funds – Default is a transfer to Savings account. Funds can then be distributed by ACH, wire ($20 fee), cashier’s check.
- Beneficiaries – Unlimited with equal shares, Social Security numbers are required.
- Grace Period –7 calendar days before automatic renewal.
- Credit Check – None.
Credit Union Overview
University Federal Credit Union has an overall health grade of "B" at DepositAccounts.com, with a Texas Ratio of 4.14% (excellent) based on September 30, 2022 data. In the past year, UFCU decreased its total non-brokered deposits by -$37.05 million, an average annual growth rate of -1.05%. Please refer to our financial overview of University Federal Credit Union (NCUA Charter # 1367) for more details.
With 30 founding members and $855 in deposits, University Federal Credit Union first opened its doors in May 1936. The original FOM was exclusive to the faculty and staff at The University of Texas at Austin. While the FOM has expanded in the past 87 years, UFCU’s commitment to higher education has remained constant.
Of course, our family has since grown to include other fine universities, their students, and other entities that share an appreciation for higher education. Our vision further recognizes education as a key economic engine driving growth and well-being of the vibrant Texas community in which we live.
UFCU is currently the eighth largest credit union headquartered in Texas, with nearly 357,000 members and assets in excess of $3.8 billion.
How the 48-Month Fixed CD Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $10k or less, no bank or credit union has a higher rate than currently offered on the University Federal Credit Union 48-Month Fixed CD. The following table compares the 48-Month Fixed CD to the two highest-rate CDs from other credit unions and the two highest-rate CDs from banks.
The above information and rates are accurate as of 2/20/2023.
To look for the best CD rates, both nationwide and state specific, please refer to our CD rates table page.
Membership and Account Agreement, page 2: "We may at our sole discretion grant you permission to withdraw funds early. If such permission is granted, it will be granted only at the time you request an early withdrawal."
Membership and Account Agreement, page 5. "We may require you to give written notice of seven (7) days to sixty (60) days before any intended withdrawals."
As I have indicated in similar posts about other credit unions in the past, these terms appear to have no limitations. In other words, it appears the credit union reserves the right to invoke these at any time for any reason that they choose. Each investor can decide for themselves if they have an issue with these. I am simply posting as an FYI.
...........
Thanks. Is the EWP still considered interest earned on your 1040?
;(
It's perfectly fine if you're a depositor searching for an attractive CD not to like this CU's rules and take one's business elsewhere because of that..But to suggest such rules in themselves are "disreputable" has no rational basis. Rather, they're being very up-front and honest.
Does anyone believe in a meltdown scenario that even without such explicit provisions Financial Institutions wouldn't refuse depositor withdrawal requests?
As pointed to above your posts by Kaight, the evil hand of ChexSystems surely is at work here. ChexSystems is perhaps the most malevolent and effective opponent of people who use this site and attempt to benefit from Ken's life work, as he intends.
I very much wish something could be done to bring ChexSystems to heel. They are working hard to counter all the great things Ken does for us. And their treachery is costing Ken's readers, as a group, serious money.
I go back and forth between believing FI's are being stingy because they remember 2019 and beyond, when 4% was being offered in light of consistent Fed funds rate increases, and then the bottom falling out rapidly with them holding the bag for locked in high yields when zero became the policy again so quickly, - and them being stingy because they can get away with it now as rate starved depositors (like Lovin) capitulate to accepting less than they might amid current (and trending) Fed policy and historically high inflation. The recession fear hype (even without evidence) and un-grounded belief in an imminent Fed pivot continue to distort markets (including the CD market), and leave everything out of kilter, or at least lagging real economic conditions. One can hope that at least gradually certain FI's will recognize we're at a point of no return to the zero or close to it practices of the post-Financial Crisis past, but that where we are now is the new norm unlikely to shift radically downward again as so many expect, - even if the Fed cuts once more in some measure as the business cycle unfolds, - and offer longer-term rates consistent with those realities.
Asked the rep what the new EWP would be on their new 48 mointh 5% certificate. He said it would be the same 90 day EWP. My hunch is that the EWP was changed in 2021 as per the membership agreement that Ken posted above where the EWP is lesser of 1} all dividends accrued 2) 25% of dividends of the entire term. Makes me think the rep was wrong about 90 day EWP on new certificates (that only applied to CDs opened prior to 2021).
If anybody has any different data points please let us know. I am not reinvesting into their new certificate unless I am clear on the nee EWP.
I do not touch dividends on any of my CDs. When I closed other CDs, principal was negatively affected.
As I read Ken’s post, principal cannot be touched which is a positive for me.
________
That does it for me, don't have a debit card and don't want one.
"Mailing address
Address must not be a P.O. Box"
I got this number using 25% of all dividends for the term from membership agreement linked by Ken above - so (365*5)*0.25.
If you close the CD within 456 days you forfeit all dividends earned. Beyond that the max EWP stays at 456 days.
The reps are giving all different answers and i cannot find EWP listed on website.