Update 3/3/09: The Add-On CD rates have fallen. New rates are 2.44% APY for 1-year and 2.72% APY for 2 years.
Northwest Federal Credit Union is offering several competitive CD rates. The most competitive ones are its two Add-On Certificates with a 3.75% APY for 2 years and a 3.25% APY for 1 year. Minimum deposit is $500. According to the Add-On Certificate page, you have the "ability to add on deposits over the term with no minimum amounts or limits to the number of deposits."
The credit union's standard CDs are also competitive. The top rates range from 2.96% APY for 6 months to 4.73% APY for 60 months. These have a $100K minimum. CDs with a $25K minimum have 0.10% lower rates and CDs with a $2,500 minimum have 0.20% lower rates. Higher CD rates are available to Heritage Club members. CDs are available as both regular and IRA certificates.
These rates are listed in the credit union's rate table (pdf) as of 2/04/2009. The rate table is dated 2/3/2009, and according to the CSR, rates are subject to change every Tuesday. I was told that the Add-On certificate rates have been steady for quite a while.
Membership is open to members of the American Consumer Council (ACC). According to the credit union's Organizations Page:
There is no cost to join, nor additional paperwork. We'll send your information to the ACC to complete the enrollment.
Other ways to qualify for membership are listed in the credit union's Who Can Join Page. Membership requires a minimum deposit of $5 into your share savings account.
This ACC membership appears to be a new way of joining the credit union. In November 2007 this credit union was offering a special 6% 18-month CD, and for a while it allowed members of the National Wildlife Federation to join. After a week, they changed the qualification to only employees of this organization.
Another thing that appears to be new is the online application via Andera. This allows you to join and open accounts online. There's an application page where you can select how you qualify for membership. I noticed that ACC is listed in the section "I work for a Member Company/Organization."
One note about the online application is that the Add-On CDs are not listed for selection. I was told by the CSR that once you are a member, you can call and open the Add-On CD by transferring money from your Northwest savings account into the CD. This can also be done for making additional deposits.
Northwest FCU branches are located in the Virginia cities of Chantilly, Herndon and Vienna.
The credit union has some strong ratings for safety and soundness: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/08 financial datal. The credit union is federally insured by the NCUA (Charter # 5500). It's a large credit union with $1.6 billion in assets and 96,306 members.
Add-On Certificates of Deposit
Add-On CDs that allow unlimited additional deposits can be very useful when interest rates are falling like they are today. Even if the add-on CD rate is not the best, it provides a fall back CD when rates are falling and your CDs are maturing. However, I'm not sure if the add-on feature is a rock-solid guarantee. There have been cases with other institutions in which the institution has stopped allowing add-on deposits. This happened back in 2006 with United Services Credit Union in North Carolina (see post). A reader just commented that it happened recently to him at Vineyard Bank in California. This seems to be a violation of the CD contract, and you may have to contact the institution's regulator to settle this issue. For the case at United Services Credit Union there didn't seem to be any resolution for the account holders.