New Higher CD Rates at University FCU in Texas - Easy Membership
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 1.25*% | $100 | $20k | University Federal Credit Union | 12 Month Early Saver CD | |
| OTHER TIERS: 0.25% → $20k+ | |||||
University Federal Credit Union did something that's rare these days. It increased some of its CD rates. The largest increase was on its 5-year CD and IRA CD. The 5-year Web CD rate is now 2.83% APY. Other competitive Web CD rates include 2.27% APY for 4 years and 2.08% APY for 3 years. Minimum deposit is $2,500. These Web Certificates require that the CD be opened online. The same rates are also available as Premium CDs and IRA CDs which require a premium checking account. These rates are listed in the credit union's certificate rates page as of 4/6/2011:
Early Withdrawal Penalty
According to the UFCU's account disclosure, the early withdrawal penalty for terms over 12 months is up to 6 months of interest.
Early Saver Certificates
Another good deal at UFCU is the Early Saver account for children. It's a 12-month variable rate CD which still has a 3.00% APY for balances up to $20,000. Additional deposits can be made at any time and in any amount. When the member turns 18 the certificate will renew into the share savings account. Even though it's a variable rate, this 3.00% APY has held for quite a while. This CD is listed in the credit union's certificate rates page as of 4/6/2011.
Membership Qualifications
There's a long list of employers, schools and associations in the credit union's membership page in which you can qualify for credit union membership. It also states in this page:
If you're unable to qualify for membership based on the above list, you can join the University of Texas Longhorn Foundation
The page has a link to the foundation's application. There's a one-time donation of $20.
The credit union has an online membership application that allows for electronic funding. A $5 minimum balance in the savings account is required for membership. Also, there's a one-time $1 fee. Another potential fee to watch out for is an inactivity fee. A reader commented on this in my last post. According to the reader, they call it a "non-participation fee".
University Federal Credit Union branches are located in the Austin metro area and in Galveston, Texas.
UFCU is a sizable credit union with over $1.27 billion in assets. It has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 6.17% (excellent) based on December 2010 data. Please see our financial overview of University Federal Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 1367).
How It Compares?
It looks like the competition in the Austin area may be helping to increase CD rates. Velocity Credit Union has been offering CD specials for the last couple of months. Like UFCU, people can join Velocity via an association. Velocity has extended its latest CD specials, and they continue to be very competitive (2.27% APY for 3 years and 1.76% APY for 2 years).
As a comparison to the best CD rates available nationwide on 4/6/2011, the best 5-year CD rate is 2.93% APY at Melrose Credit Union. For a bank, the best 5-year CD rate is 2.80% APY at Sovereign Bank.
Searching for the Best CD and IRA CD Rates
To search for the best nationwide rates and the best rates in your state, please refer to the following sections of DepositAccounts.com:
KEN,[/H2]
THIS STATEMENT IS AT THE TOP OF THE ONLINE RATE TABLE AT THE UFCU WEBSITE. SO DOES THIS MEAN IF YOU PURCHASE A 5 YEAR C.D. AT 2.83% APY, AND LATER ON IF UFCU'S EARNINGS ARE NOT SUFFICIENT ENOUGH, THAT THE INTEREST THAT YOU EARN ON THE C.D. MAY BE LESS THAN THE 2.83% APY RATE?[/H2]
Certificate & IRA Rates[/H2] Dividends are based on University Federal's earnings at the end of a dividend period and cannot be guaranteed.
"If you have funds locked into a fixed rate certificate, you earn the interest rate provided when you opened the certificate. If rates change during that time frame, your certificate will not be affected."
My guess is that they meant to say the rates that are listed (before the CD is opened) are not guaranteed.
I DISCUSSED THIS MATTER TODAY WITH A UFCU SUPERVISOR. I HAVE A HARD TIME BELIEVING WHAT I WAS TOLD, BUT THE SUPERVISOR TOLD ME THAT IT IS POSSIBLE THAT THE INTEREST, FOR EXAMPLE ON THE 5 YEAR FIXED C.D (CURRENTLY ONLINE RATE AT 2.83% APY), COULD BE ADJUSTED LOWER IF UFCU EARNINGS WERE DISAPPOINTING. IN EFFECT, IF THIS HAPPENED, YOU WOULD GET A LOWER RATE OF RETURN THAN THE 2.83% APY AT MATURITY. I AM STILL HAVING A HARD TIME BELIEVING WHAT I WAS TOLD. I HAVE NEVER HEARD OF SUCH TERMS LIKE THIS BEING APPLIED TO CERTIFICATE OF DEPOSITS.
JUST NOW, I ALSO RECEIVED A WRITTEN E-MAIL SAYING THE RATE DOES NOT CHANGE. I GUESS THIS MEANS IF THE RATE DOES NOT CHANGE THE INTEREST PAID WOULD NOT EITHER.
SINCE I RECEIVED THIS IN WRITING, I AM GOING TO HAVE TO CONCLUDE THE ABOVE INFORMATION I RECEIVED IN ABOVE TOPIC #4 WAS NOT CORRECT.
Thank you for your email. If a member has funds locked into a fixed rate certificate, the interest rate cannot be change during the certificate.