Certificates of deposit aren't flying off of the proverbial shelves these days for reasons that should by now be obvious. In case you're just tuning into the CD rates blog, rates are low -- very, very low.
The average one-year CD rate is 0.25 percent, according to Bankrate's weekly rate survey. But some lucky credit union members can get much higher CD rates if they happen to belong to Navy Federal Credit Union. The Virginia-based credit union is currently offering 3 percent on deposits up to $3,000 for one year, Byrant Ruiz Switzky reported for the Washington Business Journal this week.
Depositors do have a few hoops to jump through before they can sign up for the high rate. In the story "How can Navy Federal pay 10 times more for deposits than the average bank?" Switzky writes:
Also, to get a 3 percent CD, Navy Federal's members must have a checking account and direct deposit of at least $300. So, Navy Federal isn't just getting a few thousand dollars in deposits that will likely leave the organization after 12 months; it's getting a relationship. That may well be worth 90 bucks in interest.
Similar deals may be available at credit unions in your area. It does take a little legwork to research CD specials, but it could prove to be worthwhile. This particular CD from Navy Federal is a special offer, so it doesn't show up in Bankrate's CD rates table. In order to make it onto the rate tables, CDs must be offered with no strings, such as direct deposit and checking relationship, attached.
Have you found any good CD rates lately?
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Senior investing reporter Sheyna Steiner is a co-author of "Future Millionaires' Guidebook," an e-book written by Bankrate editors and reporters. It's available at all the major e-book retailers.