When interest rates start climbing, deciding when to buy certificates of deposit can seem daunting.
A Colorado-based credit union has a sensible solution. It offers the best nationally available CD yields that automatically adjust following Federal Reserve rate changes.
Bellco Credit Union has two Index Advantage CDs with tiered variable interest rates. Its 22-month CD is the better deal.
Make a $10,000 deposit and you can earn 2.05 percent APY. That’s 24 basis points higher than the top 24-month CD rates. A basis point is one-hundredth of a percentage point.
A 2.15 percent APY applies if you deposit at least $100,000. Compare this offer with other high-yield CDs.
|First Internet Bank of Indiana||1.81%||$1,000|
|M.Y Safra Bank||1.71%||$5,000|
Calculate how much interest you could earn by the end of your term.
Bellco’s 44-month CD
The 44-month CD offer is similarly appealing.
A $10,000 minimum deposit triggers a 2.35 percent APY. That’s two-tenths of a percentage point higher than what competitors offer. Invest at least $100,000 and the annual percentage yield rises to 2.45 percent.
The maximum deposit for both Index Advantage CDs is $125,000. Each member can only open one CD.
Interest rate adjustments
The Fed raised rates in June by a quarter percentage point. Less than two weeks later, the yields tied to Bellco’s Index Advantage CDs increased by the same amount. Bellco’s rate disclosure notes that rates may reset on the first calendar day of the month after the Fed alters its target federal funds rate. (This means the CD APY could also decrease.)
With traditional CDs and savings accounts, it could take months for savers to see rates rise. With an Index Advantage CD, that problem doesn’t exist.
There are a couple of other benefits to having a Bellco CD. Interest compounds daily. Plus, its early withdrawal penalties are fairly lenient. For Index Advantage CDs, it’s equal to 90 days of interest.
How to join
There are many ways to become a Bellco Credit Union member.
In Colorado, you can join through the Consumers United Association. To get started, register and create an account username. You’ll pay either a $5 annual fee or a $25 lifetime fee.
Otherwise, you can become a member by completing a membership application online or in a branch. Applicants must:
- Be the relative of an existing Bellco member
- Have ties to hundreds of companies and associations (or have an immediate family member who fits this description)
- Live or work in one of 13 Colorado counties
- Be at least 18 years old
- Be a U.S. citizen or resident alien
- Have a Social Security number
- Have a U.S. address
- Have a driver’s license or passport
All new members pay a one-time $5 fee and must deposit at least $25 into a savings account.
How to open an Index Advantage CD
Once you’ve received membership approval, you can open an Index Advantage CD online or in a local branch.
Online, you can fund your CD through an electronic bank transfer or mail a check. In a branch, you can write a check, transfer money electronically, deposit cash or wire money.
About Bellco Credit Union
Bellco Credit Union has a couple dozen branches and is headquartered in Greenwood Village, Colorado. Established in 1936, it serves more than 300,000 members.
Deposits are insured by the National Credit Union Administration. Bellco earned four out of five stars on Bankrate’s latest Safe & Sound Ratings, which measures the financial health of U.S. banks and credit unions.