Early in December, Navy Federal Credit Union (Navy Federal) began offering a 20-month IRA/ESA Special (2.00% APY) and a 30-month IRA/ESA Special (2.25% APY).
Those Specials are still in effect and Navy Federal has added a $100 bonus for members who open their first IRA (minimum deposit $100).
$100 Bonus Details
Offer only available to members who open their first IRA plan and deposit a minimum of $100 in their new IRA account.
To receive this $100 IRA bonus, funds must be deposited into the new IRA account no later than 45 days after account opening.
Once funds have been deposited to the IRA, Navy Federal will credit the bonus directly into your new IRA account within 30 days.
The IRA bonus will be credited to your IRA in the form of a dividend and will not be reportable as a contribution.
The minimum deposit for the 20-month IRA/ESA Special is $20, with a balance cap of $20K. There is a limit of one 20-month Special per member, but additional deposits are accepted at any time. According to CSR, the Early Withdrawal Penalty (EWP) is 6 months interest.
The 30-month IRA/ESA Special requires a $10K minimum opening balance and there is no balance cap. Like the 20-month Special, the EWP is 6 months interest.
For complete details on these two Specials, please refer to Navy Federal’s Special Offerings page.
IRA CD Features
About a year ago, I wrote in reference to two attractive features Navy Federal offers in conjunction with its IRA CDs. For the past 5 or 6 years, Navy Federal has allowed additional deposits to any existing IRA CD from January 1 through April 30, with a minimum deposit amount of $500. This morning, a very helpful CSR confirmed that this policy is in effect for this year, but she did caution that it may not be in place next year.
CSR also confirmed that in the year in which an IRA CD holder reaches age 70 1/2, funds may be withdrawn from any IRA CD with no Early Withdrawal Penalty (EWP). In addition to withdrawing more than the Minimum Required Distributions (MRD) without penalty, this permits the consolidation of funds in one Navy Federal IRA CD into another Navy Federal IRA CD without an EWP. This is particularly helpful when trying to take advantage of a higher-rate IRA CD.
It’s important to note that IRS rules can take effect and taxes may be owed if funds are withdrawn from the IRA. If funds remain within the IRA (IRA CD funds moved into an IRA savings account) and there is no MRD issue, there should be no tax concerns.
Certificate Promotion CERT2015
DA readers may recall the Certificate promotion I wrote about last week: a 0.50% (50 basis points) increase to the prevailing certificate dividend rate on a new share certificate purchase. This promotion was initially designated for members in western states, but after receiving many inquiries, Navy Federal opened it to all members.
Navy Federal CSR stated the promotion is valid only for March, but they reserve the right to end the offer at any time. When opening a CD, you must use the promotion code CERT2015; this promotional code can only be used once.
Unlike PenFed’s almost universal membership eligibility through joining an association, Navy Fed’s membership is strictly for individuals who are connected to the military.
Navy Fed’s "How to Become a Member" page very clearly qualifies individuals through a series of questions. You must be able to answer "Yes" to one of the following questions to qualify for Navy Federal membership.
- Are you currently serving as an Active Duty or reservist personnel for the DoD, Coast Guard, or National Guard?
- Are you a Military Officer Candidate?
- Are you a Military Recruit and/or part of the Delayed Entry Program (DEP)?
- Are you a Department of Defense Civilian?
- Are you a retiree receiving an annuity from the DoD, Coast Guard, or National Guard?
- Are you a U.S. government Civilian (including Coast Guard) assigned to a DoD installation?
- Are you a DoD contractor assigned to a U.S. government installation or facility?
- Are you a family member of one of the previously mentioned individuals?
Credit Union Overview
Navy Federal Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 5.52% (excellent) based on December 31, 2014 data. In the past year, Navy Federal has increased its total deposits by $4.13 Billion, an excellent annual growth rate of 10.32%. Please refer to our financial overview of Navy Federal Credit Union for more details.
Navy Federal Credit Union (NCUA Charter # 5536) is considered to be the largest credit union in the world. Headquartered in Vienna, Virginia, Navy Federal has grown from its initial seven members in 1933, to over 5 million members and assets in excess of $63 Billion.
How the IRAs Compare
When compared to other similar length-of-term IRAs tracked by DepositAccounts.com, that require a similar minimum deposit and available nationwide, Navy Federal Credit Union's 20-month IRA Special and 30-month IRA Special are clearly competitive:
To look for the best nationwide IRA rates and the best IRA rates in your state, please refer to our IRA rates table.