Best 1-year credit union CD rates — February 2020

Sunday, February 16, 2020

  CD rates are beginning to stabilize after declining throughout much of 2019. As of Feb. 12, the average 1-year CD yield was 0.77 percent APY according to Bankrate's weekly survey.

While yields generally aren't as high as they were almost a year ago, it's still possible to end up with a competitive interest rate. One way to do that is to shop around and look at the yields tied to the share certificates offered by credit unions.

Pros and cons of credit union CDs

Brick-and-mortar banks can be pretty stingy when it comes to paying out interest to their customers with savings accounts. In many cases, their CD rates aren’t impressive either.

Credit unions are member-owned institutions. That means they’re always looking out for their customers. It’s not hard to find a credit union offering competitive rates tied to CDs (or as credit unions often call them, share certificates).

“The great thing about credit unions is that we’re not-for-profit, meaning we have the ability to return the money we bring in back to our members in the form of higher rates on our products,” says Brett Wheeler, chief financial officer at USALLIANCE Financial.

The drawback? You may not have access to a credit union share certificate if you cannot qualify for membership. While there are many credit unions that are easy to join, there are still institutions that have restrictions based on where you live or work, or the group you're affiliated with.

Even if you can become a credit union member and apply for a share certificate, you may forget about this account if you have multiple accounts at different banks or you have no other ties to the credit union. If you're not careful, your CD could automatically renew, forcing you to keep money locked up for a longer period of time than anticipated. That could cause problems if you need money you've saved to cover an emergency or make an important purchase.

Here are five credit unions offering today's best nationally available 1-year CD rates. They each pay nearly three times the national average.

Best 1-year credit union CD rates — February 2020

Note: The APYs (Annual Percentage Yield) shown are as of Feb. 1, 2020. The rates for some products may vary by region.

Navy Federal Credit Union: 2.00% APY; $1,000 minimum deposit

Navy Federal Credit Union has more than 8.8 million members and is the world’s largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.

In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.

  • What it pays: 2.00 percent APY
  • Membership restrictions: Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: The lesser of all dividends for 90 days on the amount that you withdraw or all of the dividends withdrawn since the certificate was issued or renewed.

Delta Community Credit Union: 1.99% APY; $1,000 minimum deposit

Delta Community Credit Union began as the Delta Employees Credit Union in 1940. It was started by eight Delta Air Lines employees.Delta Community Credit Union has more than 400,000 members and has 26 branches in metro Atlanta and three branches outside of Georgia.

  • What it pays: 1.99 percent APY
  • Membership restrictions: Anyone living or working in metro Atlanta and employees of more than 150 businesses are welcome at Delta Community Credit Union. Delta Air Lines, Chick-fil-A and UPS are some of the eligible businesses.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 90 days of interest

SchoolsFirst Federal Credit Union: 1.95% APY; $500 minimum deposit

SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. The credit union, created by school employees, has 50 branches.

SchoolsFirst Federal Credit Union (SchoolsFirst FCU) has low minimum balances and CD terms from as short as 30 days to as long as five years. The more money you put in your CD, the higher the APY. CDs at this credit union have four balance tiers: $500, $20,000, $50,000 or $100,000.

  • What it pays: 1.95 percent APY
  • Membership restrictions: SchoolsFirst FCU serves the California educational community. Certain schools employees, certain retired school employees and immediate family members of existing SchoolsFirst FCU members may be able to join.
  • Minimum deposit: $500
  • Early withdrawal penalty: 90 days of dividends

First Tech Federal Credit Union: 1.90% APY; $500 minimum deposit

First Tech Federal Credit Union was founded in 1952 by a few Hewlett-Packard and Tektronix employees.

  • What it pays: 1.90 percent APY
  • Membership restrictions: You can join if you work for a company on its partner list or work for the state of Oregon, work or live in Lane County in Oregon or if you belong to the Computer History Museum or the Financial Fitness Association.
  • Minimum deposit: $500
  • Early withdrawal penalty: 180 days of dividends

Alliant Credit Union: 1.90% APY; $1,000 minimum deposit

In 1935, what’s now Alliant Credit Union was founded as the United Airlines Employees’ Credit Union. Alliant currently has 450,000 members nationwide.

Alliant offers competitive APYs with low minimum balance requirements for CDs. Alliant also has traditional individual retirement account (IRA) CDs, Roth IRA CDs and SEP IRA CDs, if this is an appropriate option for your retirement savings.

  • What it pays: 1.90 percent APY
  • Membership restrictions: Current employees or retired employees from a business that partners with Alliant Credit Union may be eligible to join the credit union. You may also be able to become a member by belonging to an organization that Alliant Credit Union partners with. You can also qualify to join Alliant Credit Union if you live or are employed in a community near its Chicago headquarters.If those circumstances don’t apply to you, you can make a one-time $5 payment and Alliant Credit Union will donate that money to Foster Care to Success so you can become an Alliant Credit Union member.
  • Minimum deposit: $1,000
  • Early withdrawal penalty: The number of days the CD is open -- up to 90 days.

Read the fine print

Before signing up for any bank account, it’s important to understand the terms and conditions. With share certificates — and CDs across the board — there’s typically a penalty for early withdrawal. By pulling money out of your share certificate (or CD) before it matures, you’ll likely forfeit some of the interest you’ve earned. Consequences for early withdrawals vary from one credit union to the next and sometimes vary within a single credit union for share certificates with different term lengths.

As long as the credit union you’ve chosen is federally insured by the National Credit Union Administration, the money you’ve deposited in your share certificate will be safe. In the event that the credit union shuts down, you’ll still walk away with your savings. Just keep in mind that there’s a $250,000 threshold for single ownership accounts. Larger amounts won’t be automatically insured.

Recap: Best 1-year credit union CD rates

Institution APY Minimum deposit
Navy Federal Credit Union 2.00% $1,000
Delta Community Credit Union 1.99% $1,000
SchoolsFirst Federal Credit Union 1.95% $500
First Tech Federal Credit Union 1.90% $500
Alliant Credit Union 1.90% $1,000

Learn more about other CD terms:

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