bank rates

Highest CD Rates Roundup For Dec. 7

Bringing you the very best CD rates from credit unions and local banks.Are certificates of deposit still worth your time?

The Wall Street Journal this week gave a lukewarm “yes” to that question in a story that mostly rehashes the terrible rate situation with which savers are familiar.

But the piece does take an it-could-be-worse approach to recommending that CDs remain a part of your savings portfolio.

From the story:

It isn’t hard to shop around and find yields that handily top U.S. government bonds that might otherwise be an option for money that needs to be kept safe. “I believe that CDs are one advantage that a small investor has,” says Allan Roth, a financial planner in Colorado Springs, Colo.

Government bonds historically have outperformed CDs, the story notes, with 1-year CDs yielding about four-tenths of a percentage point less than Treasury bills between 1989 and late 2007.

And while noting that CDs are still a safe investment, the story gives us a sound reminder to protect ourselves:

When shopping for CDs in this new environment, the old rules still apply. Most important: Read the fine print of the terms of the CD. Be on the watch for “teaser rates,” yields which will drop after a certain amount of time or are available only on limited investments. And confirm with the bank the exact terms of early-withdrawal penalties.

As for the best deals, this week we added two institutions to our list of highest CD rates from credit unions and local banks:

  • Melrose Cooperative Bank (www.melrosecoop.com) in Massachusetts pays 2% APY on both 48- and 60-month CDs with a $500 minimum deposit. It also pays 1.50% APY for 36-month CDs. You can only buy Melrose Cooperative Bank’s certificates of deposit if you live or work in Melrose or one of its bordering communities north of Boston. You also have to do so in person at the bank’s single office, which is located at 638 Main St. in Melrose.
  • Red Rocks Credit Union (www.redrocks.org) in Colorado pays 2.02% APY with a $5,000 minimum deposit on 60-month CDs. You have to be a member of Red Rocks Credit Union to purchase these certificates of deposit. Membership is available to those who live, work, worship or attend school in Douglas County; employees of Lockheed Martin; and members’ families. You can also become a member by first joining the nonprofit Consumers United Association, which is open to all Colorado residents for a $5 annual fee.

We also wrote about a rate boost from Pentagon Federal Credit Union, which now pays 1.50% APY on 2-year CDs and 1.75% APY on 3-year CDs with a $1,000 minimum deposit. Anyone can join this credit union by signing up through PenFed’s website for either the National Military Family Association (a one-time $20 fee) or Voices for America’s Troops (a one-time $15 fee).

Unfortunately there are a number of rate cuts to report this week, as well.

First the deals that remain on our list: Credit Union 1 pays 1.85% APY on 5-year CDs available to savers in parts of Illinois, Indiana and Nevada; Houston Police Federal Credit Union pays 1.48% APY on 15-month CDs and 1.06% APY on 6-month CDs; and State Department Federal Credit Union in Washington, D.C. pays 1.91% APY on 5-year CDs.

And we removed several institutions from our list following big cuts: Cambridge Savings Bank in Massachusetts, Evolve Federal Credit Union in Texas, Knoxville TVA Employees Credit Union in Tennessee and Mid Missouri Credit Union in Missouri.

You’ll find all the top-paying deals clearly marked on our highest CD rates page, showing where they are available, with a quick link back to the original post, which includes more information on the institution and its requirements.

We’ll update this page weekly, so you’ll always know what great deals are out there from credit unions and local banks.

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