bank rates

My Credit Unions Let Me Down

At last count, I was a member of nine credit unions across the United States.

I joined them, not because I’m a fervent believer in credit unions as such, but because, at one time or another, each offered some CD deal I found attractive.

This month – at least so far – they’ve all disappointed me.

Entering September, only one of my credit unions increased its rates for CDs of the maturities that interest me – three and five years.

That was Pentagon Federal, which raised its 3-year CD rate from 0.94% to 1.26% APY and its 5-year CD rate from 1.15% to 1.56% APY.

It also started advertising CDs on its home page again.

But these rates are well below the 1.85% APY 3-year rate available at PenFed as recently as February.

They also fall way short of my current minimums targets of 1.60% for 3-year CDs and 2.00% for 5-year CDs.

Rates at my other credit unions have remained static.

Here are the APYs offered by the six other credit unions I belong to that offer CDs nationwide, with minimal membership requirements (assuming a $25,000 deposit):

Credit Union 3-Year CD Rate 5-Year CD Rate
Alliant 1.25% 1.55%
Melrose 1.46% 1.96%
Velocity 0.80% 1.30%
Andrews Federal 1.41% 1.91%
Mountain America 0.95% 1.85%
USAlliance Federal 1.26% 1.71%


I suppose Melrose and Andrews should be commended for approaching, if not quite reaching, the top rates for these maturities on our CD Rates Leaderboard (1.50% and 2.05% APY).

And perhaps Mountain America deserves mild kudos for its 5-year rate.

But, for some reason, I expected a September rate surge – that, when Labor Day rolled around, at least one of my credit unions would post rates achieving (or exceeding) the leading rate for at least one of these maturities.

I was wrong.

Maybe they haven’t gotten the message that market-based longer-term CD rates, as demonstrated by new issue 5-year brokered CDs, have been rising steadily for weeks.

For example, I just purchased a 5-year non-callable CIT Bank brokered CD at 2.10%. (By the way, the CIT rate for a non-jumbo 5-year CD purchased directly online is 1.60% APY.)

More likely, though, my credit unions just aren’t willing to break a sweat seeking fixed-rate deposits right now.

Despite years of rock-bottom yields, they still have more cash than they need to meet qualifying member credit demands.

Hopefully, that situation will reverse itself soon – and once again these credit unions will offer the very best rates.

I’m counting on it.

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Comments (2)
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  1. Kathy said:
    on September 11th at 06:27 am

    “Despite years of rock-bottom yields, they still have more cash than they need to meet qualifying member credit demands.”?????
    What does that mean???

  2. Charles Rechlin said:
    on September 11th at 08:06 am

    This was the explanation I got from Alliant as to why its rates were on hold. It means cus have more deposits than they are able or willing to lend out. At some point, a low loan to deposit ratio leads to operating losses.