Don’t miss this Black Friday Rate Jump!
That was the lede in an email I received from USALLIANCE Financial (USALLIANCE) yesterday. By the time you read this blog post, USALLIANCE will have raised the 11-month No Penalty CD rate to 4.00% APY. The minimum opening deposit is $500, with no stated balance cap.
The new 4.00% APY is the 11-month No Penalty CD’s highest rate this year and is also the highest rate offered on any non-brokered nationally available short-term no penalty CD.
Thanks to DA reader, Rickny, for announcing USALLIANCE’s good news in a Forum post.
While the No Penalty CD no longer has its own landing page, the Certificate Accounts Disclosure, lists the following no-penalty features:
An early withdrawal of principal requested prior to the maturity date will be processed as an account closeout for the entire balance with no early withdrawal penalty imposed.
A withdrawal prior to maturity will reduce earnings and therefore your APY will be lower than the disclosed yield.
Withdrawals and account closeouts are not permitted to be made within the first 7 calendar days of opening the account, beginning on the date of deposit.
Partial early withdrawals are not permitted during the term of this certificate.
The No Penalty CD is not available for Individual Retirement Accounts (IRA), Health Savings Accounts (HSA), or Coverdell Education Savings Accounts (Coverdell ESA).
The following is from a Live Chat with a very helpful CSR. (FYI – the Chat started out with a not-so-helpful bot.) My main concern is how to request an early closure, how to receive the funds, and how quickly the funds would be released. If any of those conditions are difficult and/or time-consuming, the no-penalty CD becomes much less liquid. Luckily, it looks like a fairly easy and fast process:
[CSR]: Hello, you are talking to [CSR]. How can I help you today?
You: Hello! I have a question about your 11-month No Penalty Certificate.
[CSR]: What is your question?
You: Once the No Penalty Certificate is opened and 7 days have passed, how can a member request an early closure?
[CSR]: You would request an early closure by calling in to the credit union, provide the necessary verification information that the representative is asking for (member #, over the phone pin, etc) and then inform you would like to close the CD.
You: okay, thanks! And how can the member receive the funds from the closed CD? Is a transfer to a member's existing USALLIANCE checking or savings account an option?
[CSR]: The funds from the closed CD will be placed in either the USAlliance checking acct or savings acct of the member's choice.
You: Okay, thanks! And how long would it normally take to request a no-penalty CD closure and to receive the funds in your USAlliance checking or savings account?
[CSR]: The request to close the CD is done instantly once you call in with this request. The funds are then made available immediately as well upon the account closing.
Things You Need To Know
The following information has become standard in USALLIANCE blog posts. It is definitely worth the read, whether you regularly read USALLIANCE blog posts or casually browse.
USALLIANCE allows unlimited POD beneficiaries to be named, but Social Security numbers are required for each named beneficiary, which can be problematic for some investors. While not requiring Social Security numbers was more common in the past, asking for a beneficiary's Social Security number seems to have become the norm. In some states, like Ohio, requiring an SS# for beneficiaries is proscribed by state law.
Accessing Maturing Funds
USALLIANCE Certificates have a grace period of seven calendar days, beginning on the maturity date, although “all term accounts are available for a range of maturity days to permit you to schedule redemption for a business day.” While seven days is on the short side, USALLIANCE has provided an easy method for accessing maturing funds.
Transfer Upon Maturity: If prior to maturity you elect to redeem your Certificate Account or the Credit Union does not automatically renew your account, the entire balance will be automatically transferred to your Share Management Checking, Share Management Savings, STAR Account or MyLife Account (Checking or Savings) for easy access. Please note: Jumbo Certificates do not renew automatically.
Once the funds are in a checking or savings account, an ACH transfer can be initiated from another bank.
Right To Call
DA readers who follow USALLIANCE blog posts are probably familiar with USALLIANCE’s “right to call” any of its Certificates before maturity. While that may sound somewhat ominous, USALLIANCE states that option has never been exercised. Nonetheless, the “right to call” is spelled out in the Certificate Accounts Disclosure, and reads as follows:
The Credit Union has the right to call or redeem Certificate Accounts early. To call or redeem your Certificate Account early, the Credit Union will provide 60 days written notice to you. Should the Credit Union exercise this option, your Certificate Account will be redeemed without penalty on the day specified in the notice, and the entire balance, including earned dividends, will be automatically transferred to your Share Management Checking, Share Management Savings, STAR Account or MyLife Account (Checking or Savings) for easy access.
Headquartered in Rye (Westchester County), New York, USALLIANCE Financial's field of membership (FOM) provides a way for almost any U.S. citizen or resident alien (with a valid Social Security number) to join.
The “Membership Acknowledgement and Certification” document outlines the various ways to qualify for USALLIANCE membership.
Easy Membership Requirement: Joining any of five partner associations/charitable organizations qualifies for USALLIANCE membership.
I want to become a member of one of the following USALLIANCE partner
associations and authorize USALLIANCE to submit my membership request to:
- Tread Lightly!
- Council of Community Service
- New-York Historical Society
Residency: Individuals who live, work, worship, or regularly conduct business in the Massachusetts counties of Barnstable, Essex, Middlesex, Norfolk, Plymouth, Suffolk, or Worcester are eligible for membership. In addition, individuals who live, work, worship, or regularly conduct business in the city of West Haven, Connecticut, and qualifying districts in Manhattan, Mount Vernon, and The Bronx, are welcome to join. Following the 2018 assumption of First Jersey Credit Union, individuals who live, work, worship, or regularly conduct in the New Jersey counties of Bergan and Passaic qualify for membership.
Employment: Employees of more than 175 companies are eligible to join, including employees or retirees of the state or local government in the New York counties of Columbia, Dutchess, Green, Orange, Putnam, Rockland, Sullivan, Ulster, or Westchester.
Education: Registered students, staff, and faculty members of Columbia University and Manhattanville College (both in NYC) qualify for membership, as do members of Columbia University’s Alumni Association.
Religious Affiliation: Members of ten named houses of worship in the New York counties of Bronx, Sullivan, and Westchester are eligible to join.
Joining USALLIANCE and/or opening a No Penalty CD can be done online or at any of the 11 branch locations in Connecticut (2), Massachusetts (1), New Jersey (1), and New York (5). FYI – according to the Visiting Our Cambridge page, the branch/ATM on Massachusetts Avenue in Cambridge is “currently closed until further notice.”
Unlike the vast majority of credit unions, USALLIANCE does not have a Share Account that must be opened with a small deposit to establish membership. The only deposit requirement is a minimum $1 deposit in the account you wish to open, but having either a checking or savings account is required for membership.
USALLIANCE participates in the CO-OP Shared Branching network, providing members access to more than 5,600 branches throughout the country.
Credit Union Overview
USALLIANCE Financial has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 3.68% (excellent) based on June 30, 2022 data. In the past year, USALLIANCE has increased its total non-brokered deposits by $292.38 million, an excellent annual growth rate of 21.14%. Please refer to our financial overview of USALLIANCE Financial (NCUA Charter # 17587) for more details.
Chartered in 1966 as USAlliance Federal Credit Union, the original FOM was exclusive to IBM employees. The USALLIANCE Financial rebrand occurred in September 2015 to "help drive home all that we have to offer to potential members." From humble beginnings in the IBM basement cafeteria, USALLIANCE has grown to be the 14th largest credit union headquartered in New York State, with more than 141,000 members and assets in excess of $2.5 billion.
How the No Penalty Certificate Compares
As I have mentioned in previous blog posts, no-penalty CDs are not commonplace, and the longer the term, the more competitive the CD. When compared to other nationally available no-penalty CDs, USALLIANCE Financial’s 11-month No-Penalty CD APY currently ranks second.
The above information and rates are accurate as of 11/22/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.