Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?
On average, yes. As of June 2019, the average one-year credit union CD had a 1.42% annual percentage yield (APY), compared to the 1.11% APY average among one-year bank CDs.
Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of November 4, 2019. We then eliminated any credit union with a health rating lower than a B and identified the top offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.
Best credit union CD rates with restricted memberships or membership fees
Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s often possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.
Wheelhouse Credit Union — 11-Month CD, 2.50% APY, min. deposit $1,000
For a limited time, Wheelhouse Credit Union is offering an outstanding yield on this 11-month certificate of deposit. At 2.50% APY, this among the best returns you can find on a credit union CD with a term under one year. In addition, Wheelhouse is offering a 22-month certificate yielding an impressive 2.75% APY, and a 33-month certificate earning 2.86% APY. The minimum deposit for all three certificates is $1,000.
Communitywide Federal Credit Union — 12-Month CD, 2.25% APY, min. deposit $1,000
For over 50 years, Communitywide Federal Credit Union has provided banking services to the citizens of northern Indiana, and now a completely revamped online and mobile portal brings its great rates to you, wherever you are. Membership in Communitywide FCU is open to members of the Michiana Goodwill Boosters or the Marine Corps League of St. Joseph Valley, as well as employees of over 40 companies in the central Midwest region.
In exchange for a $1,000 minimum deposit, Communitywide’s 12-month share certificate earns a 2.25% APY. One great feature is flexibility regarding your dividends, which may be compounded in the certificate, deposited to another share certificate, or transferred to another account. Another feature to understand is that there is no automatic renewal of Communitywide’s share certificates, which could be a good thing for savers who like to be reminded to survey the best rates available before rolling over their investments.
Dow Chemical Employees’ Credit Union — 12-Month CD, 2.25% APY, min. deposit $1,000
You do not need to work for Dow Chemical to get this competitive rate on a share certificate — membership is open to anyone who joins the Midland Center for the Arts. In addition, current and retired employees of Dow Chemical, Dow Corning, and their affiliates are also eligible.
State Department Federal Credit Union– 12 Month Share Certificate, 2.22% APY, min. deposit $500
Don’t worry, you don’t need a security clearance from the federal government to join this credit union—you simply need to sign up with the American Consumer Council and you can begin enjoying the benefits of your new membership.
One of those benefits, should you so choose, includes this 12-Month Share Certificate, which allows you to park your money in an account earning 2.22% APY with a minimum deposit of at least $500. You’ll have to pay 180 days worth of interest if you withdraw your money from the certificate before it matures, but it’s worth noting you can make a partial early withdrawal — and pay the penalty — without closing out the account completely.
USALLIANCE Financial — 12-Month certificate account, 2.20% APY, min. deposit $500
USALLIANCE Financial is offering a 12-month certificate account with a competitive APY of 2.20%.
Membership in USALLIANCE Financial is open to residents of certain localities in Massachusetts, Connecticut and New York, as well as members of the American Consumer Council and a raft of other professional associations.
Connexus Credit Union – 12 Month Share Certificate, 2.20% APY, min. $5,000
This Wisconsin-based credit union cracks our ranking of the best credit union CD rates for its 12 -month share chertificate’s 2.20% APY. It requires a bit of a hefty minimum deposit of $5,000 to open an account, but its APY is fairly generous compared to its competitors. Anyone can join Connexus by joining the Connexus Association and making a $5 donation.
Technology Credit Union – 12 – 17 Month Certificate, 2.10% APY, min. $1,000
The Technology Credit Union offers a slew of CDs with competitive rates, but its 12 to 17 month term CD stands out with a 2.10% APY and a low minimum deposit of just $1,000. It’s worth noting that if your certificate is not funded within 30 days of opening, it will be closed automatically. Technology Credit Union is open to anyone who joins the Financial Fitness Association, which has an $8 fee.
Self-Help Credit Union – 12-Month Certificate, 2.12% APY, min. $500
The Self-Help Credit Union’s 12-month certificate will certainly help out your finances, with a 2.12% APY and a minimum deposit of just $500. Membership to the Self-Help Credit Union is open to anyone who joins the Center of Community Self-Help, which has a membership fee of $5.
Best CD rates for credit unions with no cost to join
The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)
Unify Financial Credit Union – 1-Year Share Certificate, 1.75% APY, min. deposit $1,000
NASA Federal Credit Union – 1-Year Share Certificate, 1.50% APY, min. deposit $1,000
If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.
Best CD rates for credit unions with the best mobile apps
By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.
But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2018 mobile banking app analysis.
Eastman Credit Union – 18-Month Investment Certificate, 2.40% APY, min. deposit $1,000
Eastman Credit Union has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.This special offer yields 2.40% APY for an 18-month investment certificate deposit, with a minimum deposit of $1,000. If you withdraw your money before the CD matures, you’ll owe a penalty fee of 90 days’ worth of dividend earnings.
Delta Community Credit Union – 1-Year Certificate, 1.99% APY, min. deposit $1,000
Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 1.10% to 1.99%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.
SECU – 1-Year CD, 1.85% APY, min. deposit $500
Wright-Patt Credit Union – 12 to 17-Month Certificate, 1.71% APY, min. deposit $500
Wright-Patt offers an 12 to 17-month certificate yielding a decent return of 1.71% APY. withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.
Redstone Federal Credit Union – 12 Month MemberPlus Share Certificate, 1.51% APY, min. deposit $1,000
However, if you do qualify for membership, you could earn an APY of 1.51% with a minimum deposit of $1,000. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.
3 questions to consider before opening a credit union CD
Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs) than traditional banks, as of September 2018. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).
There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.
According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it’s pretty solid.”
For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.
The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.
Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.