March started out with a few CD rate cuts here and there, especially with for terms that last for more than a year or so. Despite these lay-offs, interest rates from State Employee’s Credit Union remained competitive – even without making any changes.
Since the beginning of August last year, SECU has begun offering an APY of 1.00% for both 6-month and 1-year CD terms. Despite the many changes the market has experience for the past six months, it has remained unaffected through the inevitable minor fluctuations in the economy. Here are the rates they offer with from their certificates of deposit accounts:
6 months – 1.00%
12 months – 1.00%
18 months – 1.00%
24 months – 1.25%
30 months – 1.25%
36 months – 1.50%
48 months – 1.75%
60 months – 1.75%
SECU’s APY for the 6-month CD term is one of the best offers you can get from such financial institutions. This high rate makes it very desirable for anyone wishing to get quick interest from a certain amount of deposit. The same can be said for their 1-year CD term. The 1.00% interest is at par with Ally Bank’s current 1.02% APY, and certainly much better than the same bank’s 0.74% 6-month APY.
Ladderized Share Term Certificate
SECU offers a unique take on customizing your CD terms. If you are willing to invest for long-term, you can take advantage of the ladderized STC offer. It works by dividing your total investment into five equal parts, which will than take on 5 different maturity terms. What happens is that you get to have one certificate that matures every year. For each year, there is a corresponding APY, which means that you get five different interest rates annually. By the end of the 5-year term, you then get to collect all five matured term certificates. This amount can add up to more than the amount of a regular STC APY.
You may also choose the regular STC if you wish. Opening a CD account for both types require a $250 minimum deposit. In the case of the ladderized STC, this gives a total amount of $1,250, one for each corresponding year. All rates are fixed for the whole maturity period. Although the interest is not compounded daily, it certainly accrues. Once the interest is earned, the amount is automatically transferred to the member’s choice of account. Renewal may also be done if he/she chooses. On the other hand, although the ladderized STC follows the same process, renewal can take effect only after the 5-year period.
If you choose to close the account, a penalty is incurred, save for the grace period of auto-renewals. In the ladderized account, early withdrawal is subject to failure of the consumer to get the full benefits from the investment structure.
The ladderized type account is not without flaws, however. With this type, you have to be willing to wait out the full 5 years before you reap the rewards. If you’re the impatient type, then signing up for a regular CD term may be more suited for you. Whatever it is you choose, always make sure that you know where to spend the investment money is for. This way, you can make the most rational decision on what type of account really suits your need.