Best CD Rates Are Found At Local Credit Unions

Before we start talking about Credit Unions we did want to report that MainStreet Bank still has a great rate on their 36 Month CD at 2.00% APY. You have to go through their airbanking.com website and act like you are signing up as a new member to view their CD rates.

Time and time again we have seen credit unions beat out the big banks on the rates they offer for not only savings accounts but also certificates of deposits. Most Credit Unions are out of reach of the average person or they have strict membership requirements, one of the many reasons why they can offer higher rates. Right now Melrose Credit Union has held the top spot for most of the popular CDs, but Connexus Credit Union has higher rates for the 12 month and 60 month CDs.

We stated that many credit unions have strict requirements or do not allow just anyone to join unless if they are employees or are associated with the credit union in some manner. With Connexus Credit Union anyone can join by registering through the Connexus Association and pay a one-time fee of $5. You then have to open a savings account with another $5. To receive the higher rate on CDs with Connexus, you will have to open a checking account, which has to be an ‘active account’. They define an active account as:

having at least 1 Direct Deposit of net pay, including salary, wages, government benefits or pension made to the account each month. Have 10 checks, ACH withdrawals and/or signature debit card transactions clear the account by the last business day of each month, and electing to receive eStatements.

We asked how much checks cost and were told for a box of 150 checks the cost was $14.76. Connexus Credit Union is located in Wausau Wisconsin.

Connexus has a minimum deposit of $10,000 to receive their highest rates. For balances under $10,000 you will lose about 0.50% APY.

  • 12 Month CD rate of 1.75% APY versus Melrose Credit Union at a rate of 1.31% APY
  • 60 Month CD rate of 3.00% APY versus Melrose Credit Union at a rate of 2.83% APY

The national averages for both the 12 Month CD stands at 0.43% and 60 Month CD at 1.53% as stated by the FDIC.

The bank offering the highest 12 month CD is AloStar Bank of Commerce at 1.27% and the bank offering the highest 60 month CD is First Internet Bank of Indiana at 2.40% APY.

It might be worth going through some of the hurdles at your local credit union to get the higher CD rate. Some credit unions, such as those listed here are open to anyone, anywhere within the United States and have few restrictions. You can always find the best CD rates by going through our database of banks on our CD rates page.


Are CD Rates Going To Increase This Year – 2011

It has been 1 year since we wrote about the question “Will CD Rates Go Back Up In 2011” and so far rates have kept falling. Even mortgage rates are falling to their lowest levels in a year. As I write this post the United States has lost its AAA credit rating even though a default on its debt was diverted. The United States now has a credit rating of AA+ with a negative outlook, which means that the credit rating could drop again within the next 2 years unless if Congress reigns in on its overspending and debt problems.

Every program the Fed has enacted to build up the US economy has not translated into job growth or a pick up of the economy, which would translate into higher interest rates. When the Fed bought back billions of dollars worth of treasury bonds, it was speculated that interest rates would increase based on the growth of the economy and the increase of inflation. Once inflation increases so should interest rates.

In the past few weeks many CD rates were cut down a few basis points. Before the debt ceiling deal happened many were speculating that CD rates would actually increase because of Treasury yields being forced up by the small possibility of the United States defaulting. As Treasury yields increase so will interest rates, but right after the debt ceiling deal was passed, the stock market started crashing and Treasury yields actually started plummeting. Just this past week mortgage rates dropped close to 4.31%, down from 4.51% last week. It looks like CD rates will most likely continue their downward fall to record lows. How far will they go? Depends on multiple factors, but as long as the economy drags along there isn’t much hope for an increase in rates any time soon. I guess we should be asking the question “Will CD Rates Go Back Up in 2012” or more likely, ‘Will CD Rates Ever Go Back Up”. We thought last August 2010 that CD rates would surely be on the rise, since we haven’t created a magic ball and since no one can really predict the increase of rates, we made an educated guess that was completely wrong. We still have five months left in 2011 to see if rates will increase.

Here are some of the more active banks that consistently have some of the highest CD rates available nationally:

Bank of Internet cut its 12 month CD from 1.33% down to 1.20% and they also cut their short term 6 month CD rate of 1.15% down to 1.01%. The new leader for the 12 month CD term is now E-Loan at 1.26%.

First Internet Bank of Indiana currently holds the top spot for the 5 Year CD at 2.40% APY with a minimum deposit of $1,000. Discover Bank comes in second with a rate of 2.35% APY with a minimum deposit of $2,500.

If you are looking for the best CD rates, you might find better luck looking at your local credit union or a credit union that has no registration requirements like Melrose Credit Union out of New York.

You can always find the best cd rates here at bankaim.com.