bank rates

Western Deal: Bump-Up CD A Good Option

three stacks of bundled moneyIt’s going to be difficult to compete with the great deals from Pentagon Federal Credit Union, but there’s an intriguing offer out of Oregon and Idaho that residents there should examine.

The 17,000 member Icon Credit Union has two special CD rates.

With a $500 minimum deposit, it pays:

  • 2.08% APY for 60-month CDs.
  • 1.38% APY for 24-month CDs.

Although that 60-month CD special only slightly beats its term leader on our CD Rates Leaderboard, it offers the opportunity for a one-time bump to a higher rate during the term.

That could be a big deal if you believe rates are bound to increase during the next half decade. Is that enough of a carrot to pass up the 3.04% offer at PenFed?

Only if you believe CD rates are likely to climb well beyond 3% in the next few years.

On a $10,000 deposit, you’ll earn $1,615 over 5 years with the PenFed CD. That same deposit earns $1,084 at Icon if rates don’t change. But if rates increase to, say, 4% in two years and you bump the rate up, you’ll have earned $1,721, or about $100 more than the PenFed offer, at the end of your 60-month term.

It’s speculative, for sure. But it does give you the possibility of beating PenFed’s current offer.

Icon’s 24-month special doesn’t have a bump-up option, but, at nearly a fifth of a percentage point higher than the term’s current lead rate of 1.20% APY, it’s still an attractive deal.

You have to be a member of Icon Credit Union to purchase these certificates of deposit. Membership is available to those who live or work in Idaho’s Ada, Canyon, Kootenai or Shoshone counties, or in Union or Wallowa counties in Oregon. Members’ household or immediate family members also can join.

Membership requires a $25 deposit in a share savings account.

Members have to buy these special CDs at a branch. Those are in Boise and Meridian, Idaho, and La Grande, Ore.

Learn more about Icon Credit Union at www.iconcreditunion.org or call 800-877-3174.

See how these returns compare with the best CD rates from scores of banks in our extensive database.

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