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Patelco Credit Union

Top 7-Year CD Rate at Patelco Credit Union - Easy Membership


It has been a long time since I've seen a good CD deal at Patelco Credit Union. Good CD deals were common before the financial crisis, but since that time, Patelco CD rates have been a little low. That finally has changed with a 7-year CD special. It has a competitive 2.50% APY. Minimum deposit is $1,000 for a regular CD and $500 for an IRA CD. The early withdrawal penalty is 365 days of interest. The CD rates and its details are listed in Patelco's certificates page as of 4/16/2012. Thanks to the reader who mentioned this deal in the comments.

New Member CD

If you decide to join Patelco for this CD special, you may want to consider taking advantage of Patelco's New Member CD. It's a 1-year CD with a 5.00% APY. It's not a hot deal since it has a small maximum deposit of $1,000. Thus, it's probably not worth it to become a member just for this CD. However, if you're joining for another reason, this New Member CD provides an easy way to earn $50. This 5.00% APY is accurate as of 4/16/2012. Its yield used to be 7.00% so the rate may fall again.


Membership in Patelco is open to anyone who joins the Community Association for Engaging Youth (CAFE-Y). This is described at Patelco's Membership Eligibility Page:

CAFE-Y is an association of youth and adults working together to promote youth-driven community involvement as a vital force for social change. It is a support network for youth-adult teams that perform community service together all across California. Membership is open to anyone with a desire to make a difference and give back. Because YLI has a Select Employer Group (SEG) relationship with Patelco, any member of their group can join Patelco.

When I last checked with Patelco, I was told that you can join this association for free via Patelco's online application. In the first page of the application select "I heard about Patelco through my employer or I live, work or worship in a city sponsored by Patelco". After you select this, a text field appears with the instructions to enter the name of your employer or the city in which you live, work or worship. When you type CAFE, the following should appear as an option "Community Association for Engaging Youth (CAFE-Y)".

Patelco Credit Union Overview

Patelco is a large California credit union with branches located in several Northern California cities including San Francisco, Fremont, Santa Clara, Sacramento, Oakland and San Jose. There's also a branch in Deerfield, Illinois. Patelco is a member of the CU Service Centers. This allows Patelco members to perform many banking transactions at other credit unions that are also part of CU Service Centers.

Patelco used to be privately insured by ASI. However, that changed in January 2008 when it became federally insured by the NCUA. It has an overall health score of 4 stars (out of 5) with a Texas Ratio of 18.85% (average) based on December 2011 data. Please refer to our financial overview of Patelco Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 68579).

How This CD Rate Compares

Patelco's special 7-year CD matches what PenFed currently offers. It has the same yield of 2.50%. Also, both have the same early withdrawal penalty of up to 1-year of interest. As I mentioned on Thursday, the best 7-year CD rate is at Navy Federal Credit Union. Its yield is 2.70% APY. However, unlike Patelco and PenFed, membership at Navy Federal is limited. These rates are accurate as of 4/16/2012.

Searching for Top CD Rates

To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.

Edit 6/5/2012: Updated links to Patelco due to changes at Patelco's website.

Related Pages: Patelco Credit Union, Chicago, San Francisco Bay, Sacramento, CD rates, IRA rates

Related Posts

Anonymous 1
Anonymous 1 (anonymous)   |     |   Comment #1
I hate Patelco! And with good reason. Patelco had been NCUA-insured before, sometime in the mid-nineties, it converted to ASI. At $3 billion, this made it by far the largest credit union ever insured by ASI. Since it seemed improbable that ASI could ever successfully handle the failure of a financilal institution that size, a lot of us depositors went to a lot of trouble to close our accounts and move them to other federally insured institutions. I transferred my business to 1st United Services.  Subsequently, Patelco discovered that it couldn't properly conduct its trust business if the accounts weren't federally insured. There were also other limitations associated with having private deposit insurance that I can no longer remember. So, after several years, Patelco did an about face and reacquired its federal insurance.  This was almost a foregone conclusion because Patelco's board had been warned in advance that private deposit insurance was a bad fit for an institution that size. Their response to these warnings was to dismiss them with an attitude that bordered on contempt. So, after having to spend too much time extracating my business from Patelco, I pledged never to have anything to do with them again.
Apache   |     |   Comment #3
#1 Thank you so  much for sharing the negative problems with Patelco.  In this bad interest rate economy, some may be too quick to run to the institution with a decent rate without researching problems.  I appreciate hearing the experiences customers have, good or bad, with these credit unions.
Anonymous 1
Anonymous 1 (anonymous)   |     |   Comment #2
Correction: Patelco dropped its federal insurance in 2002 and reacquired it in 2007. 
Anonymous   |     |   Comment #5
Credit unions can't drop federal insurance without a vote of approval from a majority of members.

If Patelco dropped federal insurance in 2002, it wasn't something imposed on their members by above, it was something the members did to themselves.
Anonymous 1
Anonymous 1 (anonymous)   |     |   Comment #10
#5 You're absolutely right. Sixty-one percent of the members voted for the change. My criticism was (and still is) that the Board got a majority of the members to vote for the switch to ASI because it failed to explain the potential consequences of doing so. Several years later, the U.S. General Accounting Office issued a report implicitly criticizing ASI for being massively undercapitalized. At the time, ASI's business was heavily focused on insuring large state-chartered California thrifts. Handling the failure of one of these, especially $3 billion Patelco, would have exceeded ASI's logistical and financial capabilities and likely would have left large numbers of depositors without access to their money. In other words, by not pointing this out, the Board was gambling with the depositor's money and leaving it for the latter to take the Board's word that switching to ASI was safe.

A number of depositors like me took the safe path and bailed. What still rankles me is that Patelco's staff was thoroughly indifferent to our departure. Moreover, if someone like me questioned the sufficiency of information that the Board had provided to depositors prior to the referrendum, they received a curt dismissive response. Usually something along the lines of "we understand your concern but the referrendum has been held and it's too late for you to to argue about it".

Ultimately, none of the benefits that the switch to ASI were to bring materialized. Although the deposit insurance limit immediately increased from the $100k NCUA limit to $250k per account, Patelco didn't experience any real deposit growth from the switch because many depositors were wary of ASI and because being privately insured inhibited Patelco's ability to participate in shared branching. Ultimately, the insurance premiums charged by ASI exceeded those of the NCUA. Being privately insured also meant that Patelco couldn't join the Federal Home Loan banking system. Finally, there was a reluctance among trust customers to place their funds in a privately insured bank. In short, Patelco's daliance with ASI garnered few, if any, benefits and left me distrustful of both its Board and its staff members. Sorry about this diatribe but, as you can tell, I really don't care for Patelco.


Priscillia28 (anonymous)   |     |   Comment #6
Above poster, are you sure the board of directors can't make that decision? 

Is there an actual government regulation that requires members vote on dropping federal coverage?
Anonymous   |     |   Comment #7
Ken.  This would be a good subject for an article on your website (can a credit union drop federal insurance coverage without a vote of its actual membership).
Apache   |     |   Comment #8
Don't credit unions have a board and wouldn't this be something their board could vote on (dropping federal insurance coverage issue) ?  I would not think the entire membership would have to be involved.
Walter (anonymous)   |     |   Comment #11
I'm an atty. in priv. prctice 32 yrs., had very extensive dealings with banks, c.u.'s and regulators, and their Boards.  I agree with the posters, I'd only put my hard-earned money in a federally-insured acct.  End of discussion.  If there was ever "trouble" I'd want the U.S. govt. behind me.   I won't go into details, but no other way for me, or any clients who I'd advise.  I'd have done the same as #1.
Anonymous   |     |   Comment #12


Dear Anonymous 1,

Yes ... I recall when Patelco made their transition away from NCUA.  I too closed all of my accounts with them.  However I opened up a few of the accounts with Patelco when they returned to NCUA. 

I have no problem to open/close account(s) as the CUs make their moves.  Sure ... it is a little time consuming ... But I consider this just as a part of doing business.

Your Truly,

cumulus   |     |   Comment #13

Patelco's 1yr EWP on this 7yr CD will never
eat into the principle; eg., closing the CD
at 6 months results in $0 EWP.
Apache   |     |   Comment #14
#13  Is this EWP you post listed on Patelco's webpage?  I did not find it.  I have never heard of a one year EWP that would cost nothing to withdraw early.  My experience has always been that once you open the CD no matter when you decide to close it early, you owe whatever the penalty is and if you have not left it open long enough for it to earn the penalty amount, they take it out of the principal.  I have had no penalty CDs which cost nothing to close but I do not understand how it can have a one year EWP and cost nothing to close as you have indicated.  Thanks!
cumulus   |     |   Comment #15

Apache #14,

> Is this EWP you post listed on Patelco's webpage? ...
I was told this was their policy by a Patelco CSR on the
telephone (1.800.358.8228) earlier today.  Although this
is not a common policy, it is not unheard of.
Apache   |     |   Comment #18
Early Withdrawal Penalties
If you withdraw principal from a Certificate Account prior to maturity, an
early withdrawal penalty will apply. If you withdraw funds within six days of
opening a certificate, a penalty of seven days’ dividends will be assessed, even
if the penalty invades principal (except for IRA certificates, where the penalty
will not invade principal). All other early withdrawal penalties on certificates
with terms up to 47 months will equal the lesser of dividends earned on the
Certificate or 90 days’ dividends. Early withdrawal penalties on certificates
opened after June 1, 2005 with terms of 48 months or longer will equal the
lesser of dividends earned on the Certificate or 180 days’ dividends.

Paoili #17:

The above information is from the Patelco Credit Union Manual.  I could find nothing on the 7 yr CD or anything that indicates one can have an EWP and not pay a penalty.  It would not be called an Early Withdrawal "Penalty" if one did not have to pay something, imo.  I would double check with Patelco and ask them to see this in writing before I would enter into a purchase with them.
Apache   |     |   Comment #20
Cherry Pie:  Thank you so much for signing the Petition!  I knew "cherry pies" were better than "apple" any day!  Much appreciation.
Bozo   |     |   Comment #21
I joined Patelco sometime back to get their (at that time) uber-competitive CD rates. I was also a bit concerned about the ASI insurance, and was very happy when they switched (back) to NCUA. They have a branch locally (about a two mile drive from my house), and I suspect I will transfer my maturing Dime Savings 15 mo CD to Patelco. Same rate (2.5%) albeit a much longer term, but that's your fixed-income market these days. The only bond-fund alternative is Vanguard's intermediate-term total bond index fund, which has a paltry 2.13% SEC yield and a duration of a tad over 5. I'm not exactly enamored with bond funds these days. To say that the current dividend yields are ephemeral is an under-statement. Beware those Morningstar "yields", as they are merely a reflection of trailing dividends, not future yields. Always look up the "SEC" yield, which reflects the stuff coming in the door. That's the yield you can expect over the duration of the fund, for new money.
Anonymous   |     |   Comment #22
Watch out on IRAs!

Their local newspaper ad has this in very very tiny type

"There is a 365-day interest penalty for early withdrawal that will not be waived regardless of eligibility for distribution from an IRA except in circumstances of death or legal incompetence."

It is also on their website https://www.patelco.org/Checking-And-Savings/Savings/CDs/#NewMemberCD 
Anonymous   |     |   Comment #23
From what I read on their website, the EWP for the 7 year CD is 365 days.

There is a lesser penalty on the 5 year CDs.
Anonymous   |     |   Comment #24
Along with many of you I have made a personal choice to remove funds from Patelco when they changed their insurance coverage. I have gone back with them and have IRA funds in a 5 year cd.

In November 2011 and previous years I removed my RMD (retirement minimum deduction) and have never had a problem removing IRA funds be it for a new (rollover) cd at another institution or to pay my RMD.

I am unsure if some of the language written in their pamplets are used for general information and that the guidelines are moved based on the person, their relationship to Patelco, or other laws that keep them from adhering to theirs.

The brick and mortor buildings are local for me so I always go in and talk with a representative. Perhaps that ability helps me to accomplish removing funds. Also being over 70 1/2 years if age I am forced by the IRS to remove, based on age, some of these funds.

I makes sure any changes from their paperwork is in writing. That way I am sure of the outcome.
grnbsh (anonymous)   |     |   Comment #25
Thanks very much for your help here on how to become a member at Patelco via, " In the first page of the application select "I heard about Patelco through my employer or I live, work or worship in a city sponsored by Patelco". After you select this, a text field appears with the instructions to enter the name of your employer or the city in which you live, work or worship. When you type CAFE, the following should appear as an option "Community Association for Engaging Youth (CAFE-Y)".

I did not have any problems to be a member whatsoever.

Their 7 year CD rate at 2.50% APY is the best I could get at this point in time, in this seemingly never downward spiral of CD rates for the past (?) four years, and doesn't really look to bottom out until maybe 2015.