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Bit Of A Problem With Growth CD's

happyharold4
  |     |   371 posts since 2022

I just opened 2 18/mo growth cd's---Then they informed me that the total amount I can have in the combination of both would be $100K---And if the amount goes over that amount, then the dividends would go into the savings which pays nothing---I thought from reading the DA comments that you were allowed $100K per account---I have a bunch of CD's maturing soon and thought MACU was the answer---Guess not---It seems the only work around would be to know when the dividends started going into the savings and skim them off to a higher paying savings elsewhere. Is that how those of you who accounts with them have handled it?

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happyharold4
  |     |   371 posts since 2022
Sorry---I met to post this in Miscellaneous---Oh well.
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racecar
  |     |   593 posts since 2014
No real way to get around it. It's $100k max per SS#. If you have a spouse they can open an additional $100k under their own SS#, but otherwise no way around it. If you try to manually put in more than $100k, any overage will be automatically be put back into your savings acct.

However, the interest (dividends) even when over $100k WILL stay in the CD (unless you instructed them to take it out on a monthly basis). If you manually try to add anything when -- or if it will make -- the combined total for all your growths go over $100k, any overage over $100k will be returned back to your savings acct. But not for the interest earned -- that'll stay in the CD even after $100k.

Here's a scenario: say last year you opened up a 1 year growth and put $100k in it, then by the time maturity rolls around you might have (for example) $105k in it (5k more because of the interest earned). When it matures, you can move up to $100k of that now-$105k into a new Growth, but the rest you'll have to put elsewhere (maybe in a standard certificate with the same term length, or another place). And the process starts over. You can only PUT IN a max of $100k combined for all Growths, once you reach $100k the system will return anything else you try to manually put in. But monthly interest earned from the current Growths will be allowed to stay in the CD even over $100k. Hope this helps.
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samiam
  |     |   52 posts since 2018
racecar is correct. The amount you’re allowed to deposit cannot exceed $100k. However, all of your dividends WILL be added to your certificate. Also, racecar gave you good advice in suggesting your spouse open a certificate. This will double your maximum to $200k for both of your growth certificates. Last, I’m sure you know that these limits are only for growth certificates. There are no limits on their regular certificates.
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happyharold4
  |     |   371 posts since 2022
Not worth getting married ( smile )
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deplorable_1
  |     |   2,206 posts since 2020
Yep Racecar is correct. Don't forget about the youth CD's as well that can add a bit to your add-ons but different rules apply and you have to be careful of the kiddie tax. Also double check after you hit the $100,000 max that they don't just dump all dividends into the savings. That happened to me and I had to tell them to keep it in the CD. If you know you will be maxing it out the regular CD is a pretty good deal I doubt liquid accounts will be topping 5% by much in the next 18 months even if rates do go up banks are very slow to hike rates.
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happyharold4
  |     |   371 posts since 2022
I agree---This 18/mo offer at 5.0apy is great---But my cd's don't mature til June---That is why I opened 2 of them and will just let them sit there with $5 and $10 per month til June---Because as you said very unlikely to have a better offer before June---The CSR's that I spoke with said in all probability this offer will end 3/31/25 and a new one on 4/1/25---If something better comes I can just let the 2 growth accounts just sit til they mature with the $5 in them.
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happyharold4
  |     |   371 posts since 2022
Thanks for the above info---What about FDIC insurance---Is that 250K based on your SS#---Or is it 250K for growth accounts and 250K for standard accounts.
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P_D_1
  |     |   450 posts since 2025
If you are the only owner of the accounts, and none of them are IRA accounts or trust accounts with beneficiaries, then your FDIC insurance coverage is limited to a total of $250k for all of the accounts you have there combined.

However, you mentioned MACU which is not FDIC, it is NCUA.  But either way this answer is the same.

This also assumes that NCUA doesn't reduce your coverage before your certificate matures without grandfathering your coverage in... like they just did to some other depositors.
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edinperk
  |     |   18 posts since 2016
P_D_1 is correct, but the trick is to add multiple beneficiaries to increase the NCUA insurance limit. Two qualifying beneficiaries = $500K, three = $750K, etc. I've used this at other credit unions. MACU doesn't support adding beneficiaries on the website, and no local branches, so I just keep less than $100k there in the Growth CDs.
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anonbb
  |     |   8 posts since 2020
When you add money to a Growth CD that already has money in it and has earned interest, does the $100,000 cap include the interest that has been credited to the account, or is the $100,000 just the total amount of actual deposits that are allowed?
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MY2CENTSWORTH
  |     |   435 posts since 2016
anonbb, only deposits are counted toward the 100K cap. Earned interest as it is added does not count against the 100K maximum allowed
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UtahManAmI
  |     |   15 posts since 2020
If you are in the Utah area where MACU is located, you can also get similar add-on certificates at other credit unions.

America First Credit Union has a Dedicated Savings which has the same $100K cap.

UFirst Credit Union has a U-Save Certificate which has a $250K cap.

If you're looking for that ability to open a CD as an insurance policy in case rates tank, there are other options in addition to using MACU. I have these add-on CDs at all three credit unions and all work great for me.
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