Big deal: This 5-month CD pays a whopping 3%

Navy Federal Credit Union
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There are few ways to get a guaranteed return above 2 percent. One involves buying a long-term CD.

The world’s biggest credit union is changing the game. Customers can earn a high yield without signing a four or five-year contract.

Navy Federal Credit Union’s special 5-month certificate pays 3 percent APY. That’s more than twice as high as the best 6-month CD rates.

Top nationally available 6-month CD rates
Institution APY Minimum deposit
First Internet Bank of Indiana 1.37% $1,000
M.Y. Safra Bank 1.26% $5,000
Pacific National Bank 1.25% $1,000
Nationwide Bank 1.20% $500

The deal should interest savers trying to meet a short-term goal, like saving for a down payment on a car or wiping out credit card debt. Compare the offer to other top CD rates.

The nuts and bolts

Before you decide the 5-month special is too good to be true, read the fine print.

The minimum deposit is $50. But the maximum amount you can deposit is $10,000.

Each member can only buy one 5-month certificate. So you can’t bypass the balance cap by purchasing a bunch of accounts.

You can, however, make multiple deposits whenever you like. Few CDs – other than ones offered by banks like Amboy Direct – offer similar benefits.

Calculate how much interest you stand to earn. And try to avoid the early withdrawal penalty. According to the credit union’s certificates brochure, you could lose “dividends on the amount withdrawn for 90 days or from the date of purchase or renewal (whichever is less).”

How to join

A wide range of people can become Navy Federal members. You’ll qualify if you:

  • Are currently affiliated with the armed forces, the National Guard or the Department of Defense
  • Are an honorably discharged veteran
  • Have a family or household member who’s eligible for membership, even if they’re no longer alive

Taking a short quiz can show you whether you can join. You’ll also find a list of materials you need to open an account.

Civilians and service members must:

  • Have a Social Security number
  • Have a current or previous home address
  • Have an email address
  • Have a government ID or driver’s license

Family members must provide information about their sponsor, including his or her last name and affiliation. All new members must open a savings account and deposit at least $5.

How to buy Navy Federal CDs

Applying for membership and opening an account online should take about 10 minutes. You can also apply over the phone or at a branch.

You can make your initial deposit by mailing a check, transferring money from another account or wiring money from an external bank.

When your certificate matures, you’ll have a few weeks to decide what to do. It can automatically roll over into a 12-month EasyStart certificate, which also has a 3 percent APY.

About Navy Federal Credit Union

Navy Federal Credit Union is headquartered in Vienna, Virginia. It has 295 branches in multiple states and serves more than 7 million members.

The credit union earned four out of five stars on Bankrate’s latest Safe & Sound Ratings, which measures the financial health of banks and credit unions throughout the United States.