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How to File a Complaint Against Your Bank or Credit UnionSurvey of Special High-Yield Low-Cap Certificates of Deposit & Savings Accounts
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POSTED
ON BY Ken Tumin
Several credit unions have been offering special CDs and savings accounts with very high yields but with low maximum deposits. These are often new-member specials or youth CDs. Instead of having multiple posts on all of these, I thought I would just have this one post. If you've seen others that I've missed, please leave a comment.
To measure the value of one of these CDs, I compare it against an online savings account. For today's rate environment, I'll use 2.00% APY as a respectable yield. I then compute how much extra someone would earn in one of these CDs compared to the savings account. Here's an example.
Assume a 6% special 3-mo CD with a maximum deposit of $1,000. Here's how I compute its value:
In the above example, you'll only earn $10 over what you would have earned if you had just kept the money in a 2.00% account for those 3 months. As you can see with a low maximum deposit and a short term, this kind of special CD could be more trouble than it's worth. These deals have become a little more valuable since interest rates are so low. Last year I was comparing these deals to a 3.75% savings account.
Below is a list of some promotional savings accounts and CDs that I've been able to find. All yields are based on APY. The extra amount is based on what I described above. If you've seen others, please leave a comment.
Nationally Available:
Locally Available:
To measure the value of one of these CDs, I compare it against an online savings account. For today's rate environment, I'll use 2.00% APY as a respectable yield. I then compute how much extra someone would earn in one of these CDs compared to the savings account. Here's an example.
Assume a 6% special 3-mo CD with a maximum deposit of $1,000. Here's how I compute its value:
Interest rate advantage = 0.06 - 0.02
= 0.04
Extra earnings for 1yr = $1,000 * 0.04
= $40
Extra earning for the
specific CD term = (3mo/12mo) * $40
= $10
In the above example, you'll only earn $10 over what you would have earned if you had just kept the money in a 2.00% account for those 3 months. As you can see with a low maximum deposit and a short term, this kind of special CD could be more trouble than it's worth. These deals have become a little more valuable since interest rates are so low. Last year I was comparing these deals to a 3.75% savings account.
Below is a list of some promotional savings accounts and CDs that I've been able to find. All yields are based on APY. The extra amount is based on what I described above. If you've seen others, please leave a comment.
Nationally Available:
- 5% 12-mo Way2Save with 5% year-end bonus (extra $78) at Wachovia (the only bank on the list). This is more of a savings account than a CD. By setting up 12 monthly automatic transfers of $100, you can easily make an extra $78 over the first year (my account review)
- 7% 12-mo CD $1K Max (extra $50) at Patelco CU. In CA, but with easy membership (my account review)
- Update 6/22/09: This 8% account is no longer available. 8% Youth Savings thru 1/1/10 $1K Max (extra $40) at Patelco CU. In CA, but with easy membership (my account review)
- 5% 5-mo CD $5K Max (extra $62) at People's Trust FCU. In TX, but with easy membership (my account review)
Locally Available:
- CO: 7% 7-mo CD $2K Max (extra $58) at Elevations CU - CU's eligibility info
- OR: 4.5% 12-mo Savings $1K Max (extra $25) at Rivermark Community CU
- PA: 7.50% 12-mo CD $1K Max (extra $55) at Freedom CU. Available from 4/18/09 to 4/24/09 (or after first 350 new members) - CU's eligibility info. [Hat tip to SB]
- TX: 10% 1-6yr Youth CD $1K Max (extra $80-$480) at Neighborhood CU Dallas - CU's eligibility info
- TX: 5% 12-mo CD $1K Max (extra $30) at A+ FCU in Austin - CU's eligibility info
