Credit unions often adjust their rates at the start of each month. In today's environment, those rate changes are often rate cuts. That's the case at Navy Federal Credit Union which had some substantial cuts to its CD and IRA CD rates. However, its CD rates remain very competitive. Navy Federal's long-term CD rates fell by 20 basis points. The shorter terms had smaller cuts. Below are the new rates for the $100K deposit tier. I've also listed the change in basis points. These rates are listed at the Navy Federal certificates rates page as of 9/4/2012:
- 2.15% APY 7-year CD (-20 bps)
- 2.00% APY 6-year CD (-20 bps)
- 1.85% APY 5-year CD (-20 bps)
- 1.60% APY 4-year CD (-14 bps)
- 1.40% APY 3-year CD (-10 bps)
- 1.20% APY 2-year CD (-5 bps)
- 1.10% APY 18-month CD (-5 bps)
- 1.00% APY 1-year CD (-5 bps)
- 0.85% APY 9-month CD (-5 bps)
- 0.75% APY 6-month CD (-5 bps)
- 0.65% APY 3-month CD (-5 bps)
These same rates also apply to IRAs.
The smaller tiers had smaller rate cuts. For example, the 7-year CD yield for a $1K minimum deposit fell from 2.10% to 2.00% APY.
It's interesting to see how these rates have changed in the last four months. The long-term CD rates have fallen the most. In May, the top 7-year and 5-year CD yields were 2.75% and 2.25%. These are now 2.15% and 1.85%. The short-term CD rates are only 5 basis points lower.
Special EasyStart Certificate
If you review Navy Federal's certificate rate table, you may notice the EasyStart Certificate which has a 12-month term with a 3.00% APY. As you many have guessed, there are details that make this much less attractive. First, there's a maximum balance of $3,000. Second, it requires that you have a Navy Federal checking account and a monthly automatic transfer of at least $15 into the EasyStart Certificate.
Early Withdrawal Penalty
The early withdrawal penalty for terms over 1 year and up to 5 years is equal to up to 180 days of dividends on the amount withdrawn. The penalty for terms over 5 years is up to 365 days of dividends on the amount withdrawn. The penalty won't eat into the principal if the withdrawal is made early into the term. In those cases the penalty will equal all of the accrued interest.
The early withdrawal penalty and other CD details are listed in the Navy Federal Combined Certificate Disclosure.
Unlike PenFed, there's no association that can be joined to qualify for Navy Federal membership. To be eligible to join Navy Federal, 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 $48.02 billion in assets and $35.63 billion in deposits. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 7.67% (excellent) based on March 2012 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
Even after these rate cuts, Navy Federal's 7-year CD rate (for $100K minimum) continues to be a rate leader for 7-year maturities. Second place goes to Northrop Grumman FCU with a 2.11% APY (may change later today) and third place goes to Pentagon FCU with a 2.02% APY.
Navy Federal's new 5-year CD rate is no longer on top. There continues to be three all-access credit unions that offer a 2.00% APY 5-year CD. As of this morning, these include Mountain America Credit Union, Pen Air Credit Union and Connexus Credit Union.
The best 5-year CD rate at a bank (that's nationally available) is 1.90% APY at CIT Bank. BBVA Compass still offers a 2.00% APY 5-year CD, but this is only available in a few states where BBVA Compass has branches.
The above rates are accurate as of the morning of 9/4/2012.
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.