In less than a month since the last rate increase, Navy Federal Credit Union again increased the rates of some of its long-term CDs and IRA CDs. Its 7-year CD rates had the largest increase. The new rate is 3.40% APY for a minimum deposit of $20K (up from 3.05%). The 5-year and 4-year CD rates also went up, but they're not quite as competitive. The new rates are 2.60% APY for 5 years and 2.15% APY for 4 years. Minimum deposit is $20K. Rates are 10 basis points lower for a $1K minimum deposit. The 5-year CD rate is 2.70% APY for a $100K minimum deposit. These rates are listed at Navy Fed's certificates rates page as of 4/1/2011.
The maximum early withdrawal penalty for the 7-year CD is 365 days of interest. For terms greater than one year and up to 5 years, the penalty is up to 180 days of interest. The penalty won't eat into the principal. Details are listed in Navy Fed's disclosure. Note, there are some risks in relying on mild early withdrawals penalties.
To be eligible to join Navy Fed, you must have some connection with the military. This includes Navy, Army, Marine Corps and Air Force. Please refer to their Eligibility Checklist for the full details. Unlike Pentagon Federal Credit Union, there isn't an easy way for people without a military connection to join.
Navy Federal Overview
Navy Federal Credit Union branches are located around the US and the world.
Navy Federal has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 10.19% (above average) based on December 2010 data. It's the largest credit union in the nation with $44.20 billion in assets and $31.24 billion in deposits. Please refer to our financial overview of Navy Federal Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 5536).
It's nice to see these rate increases. However, it's going to be a difficult decision in the coming months to invest in long-term CDs if rates start going up. For example, I'm sure those who jumped on this 7-year CD last month when the yield was 3.05% may be disappointed now. But if you have a CD ladder, you just go with the best long-term CD rate when one of your CDs matures regardless of the rate environment. In that case, this Navy Federal CD is hard to beat. Other than Navy Federal, the best nationally available 7-year CD rate at a credit union is 3.00% APY at Apple Federal Credit Union. At a bank, the best 7-year CD rate is 2.60% APY at Discover Bank.
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.
Edit 4/5/2011: Corrections made to the health score and Texas Ratio.