It's common for Pentagon Federal Credit Union and Navy Federal Credit Union to both have very competitive long-term CD rates. Their rates are often close, and consequently, I usually give the focus to PenFed since they make it easy to join. However, in March that has changed when PenFed reduced its rates. Navy Federal held steady, and now it has a big lead on several long-term rates. The two best rates are a 2.70% APY 7-year CD with a $20K minimum and a 2.25% APY 5-year CD with a $100K minimum. Rates apply to both share and IRA certificates. These rates are listed in the Navy Federal's certificate rates page as of 4/12/2012.
Navy Federal is still offering a special 3.00% APY 20-month IRA certificate. In addition to being limited to IRAs and ESAs, it also has a maximum deposit of $18,000. I reviewed this special last December.
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.
Unlike PenFed, there's no association that can be joined to qualify for Navy Fed membership. 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.
Navy Federal Overview
Navy Federal Credit Union branches are located around the US and the world.
Navy Federal is the largest credit union in the nation with $46.93 billion in assets and $33.64 billion in deposits. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 8.24% (above average) based on December 2011 data. 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).
How These CD Rates Compare
The highest 7-year CD rate that's available to everyone is 2.50% APY at Pentagon Federal Credit Union. The best 5-year CD rate is 2.36% APY at Michigan State University FCU. This requires a $100K minimum deposit. If you have a military connection, you may be able to qualify for Air Academy Federal Credit Union which has a 2.45% APY 5-year CD for a $10K minimum deposit. For a minimum deposit of $5K, the best 5-year CD rate is 2.27% APY at Melrose Credit Union. These rates are accurate as of 4/12/2012.
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.