bank rates

Credit Union’s Special CD Pays Big, 2 Ways

CBC Federal Credit Union has announced its 60th anniversary special, and here’s the update I promised.

The southern California credit union is paying 6.00% APY for the first six months of a 60-month CD with a $1,000 minimum deposit.

After that, the rate changes to 2.08% APY. So, when it’s all said and done, you’ll earn 2.50% APY.

Sounds good, huh?

Unfortunately, there’s one more six in the mix to carry on the anniversary theme.

The maximum deposit on this CD special is $6,000. (Maximum equals the most you can invest, of course.)

In our book, that seriously limits the value of this deal.

But, hey, if you have $6,000, you’ll have a tough time finding any other bank or credit union paying that much.

We also put our heads together over here and came up with a way to turn this into an even better short-term CD.

The early-withdrawal penalty is a standard 180 days, and the credit union says it will use the 2.50% rate to calculate that penalty.

So, if you invest the $6,000 maximum, you’ll earn $182 the first six months and $77 the next six months.

If you bail on the CD after that year, you’ll sacrifice everything you made over the final six months but still wind up with an effective return of 3%.

Try to find a 1-year CD paying anywhere close to that. You can’t.

If you bought a 12-month CD from Alostar Bank of Commerce, which is offering the top nationally available rate of 1.25% on our CD Rates Leaderboard, you’d make less than half as much.

Members of CBC Federal Credit Union can buy these special certificates of deposit through May 31.

To learn how to join CBC Federal and buy its CDs, go back to our March 29 post on this credit union.

You can also see how these returns compare with the best CD rates from scores of banks in our extensive database.

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  1. Mike Sante said:
    on June 1st at 01:29 pm

    This special is now over. The top rate is now 2.00% APY for 60-month CDs, with a 0.05% bonus for deposits of $50,000 to $100,000 and 0.10% for deposits of over $100,000.