If you have CDs maturing, you might be trying to decide what to do with that money. You will probably be very disappointed with today's awful CD rates. Unfortunately, there aren't any good options for money that you want to keep 100% safe. You can keep the money liquid in savings or reward checking accounts. There are good deals with these accounts, but as we have seen over the last year, these rates can fall substantially. Only CDs can provide some certainty that the rates won't fall (at least until the CD matures).
If you decide to stick with CDs, you should consider credit unions. Many of the best CD rates continue to be from credit unions. This is especially the case for long-term CDs. If you're looking for a 5-year CD, you will be very lucky to find a 2.00% APY at banks. For bank CDs available nationwide, the best rate is only 1.81% APY at The National Republic Bank of Chicago. However, the best rate at an all-access credit union is 2.25% APY at Astera Credit Union. That's an extra 44 basis points. If you invest $100,000 for 5 years, that's an extra $2,200 (rates as of 5/18/2012).
If you're not familiar with credit unions, it's important to understand that the vast majority of credit unions have federal deposit insurance from the National Credit Union Administration (NCUA) that's equivalent to the FDIC.
Another important aspect of credit unions is their limited membership. However. joining a credit union is probably easier than you think. All credit unions have a field of membership (FOM) in their charters that defines who can join. This can be based on the community where you live, where you work or what associations you belong to. Fortunately for us savers, FOMs have expanded in recent years making it easy to join many credit unions based on where you live or the associations you belong to.
You can use our rate tables to find credit unions in your state with the best rates. This post on finding the best credit unions can help you find local credit unions using our rate tables. The post focuses on checking accounts, but it also applies to CDs.
If you don't mind banking online and by mail, you should also consider the all-access credit unions. It's likely that you will find these have better rates than your local credit unions. For most of these all-access credit unions, you can join an association and that will qualify you for membership into the credit union. To learn more about these all-access credit unions and to see a list of them, please refer to my post The Big List of Credit Unions Open to Anyone.
I just added the following 4 credit unions to this big list:
- Astera Credit Union - Lansing, MI (online application)
- Hughes Federal Credit Union - Tucson, AZ (online application)
- Michigan State University Federal Credit Union - East Lansing, MI (online application)
- Pen Air Credit Union - Pensacola, FL (online application)
If you have come across other all-access credit unions that are not on the list, please leave a comment. As I described in the big list post, there have been cases when credit unions have added membership restrictions. So some credit unions may need to be removed from the list. The more credit unions that make it easy to join, the more competition will exist and the more it helps savers. As we all know, savers need all the help they can get in this awful interest rate environment.