BECU, or Boeing Employees Credit Union, is a not-for-profit credit union focused on its members’ financial well-being. One of the ways they help members save is through Certificates of Deposit, also known as CDs.
A CD is a savings tool where you deposit a sum of money for a fixed period, and in return, you earn interest. The longer you keep the money in the CD, the more interest you generally earn.
In this article, we’ll give you a detailed look at BECU CD rates, what features they offer, and how they stack up against other CD options you might be considering. Let’s explore if a BECU CD is the right choice for you.
Understanding BECU CDs
BECU, like most credit unions and banks, offers certificates of deposit. Here’s an overview of what you can expect.
BECU CD Options
BECU offers CDs with terms ranging from 3 months to 60 months.
The minimum deposit is generally \$500, but if you opt for an Add-To CD, you can open one with only \$100.
BECU offers three types of CDs: standard CDs, Bump CDs (which allow you a one-time rate increase if rates go up during your term), and Add-To CDs (which allow you to make additional deposits throughout the term).
Member Advantage Accounts and CD Rates
BECU offers a program called Member Advantage, which gives qualifying members access to higher rates on certain products, including CDs. To qualify, you’ll have to meet certain requirements, such as using a BECU debit or credit card a certain number of times per month or maintaining a certain balance in your BECU accounts.
To get the best CD rates at BECU, you’ll most likely need to qualify for Member Advantage.
BECU CD Features and Benefits
BECU offers several types of Certificates of Deposit (CDs), each with its own features and benefits.
Standard CDs
BECU’s standard CDs offer a fixed interest rate for the term you choose. With standard CDs, the interest compounds automatically unless you direct BECU to transfer it to a separate account. BECU offers standard CDs with a variety of maturity dates to choose from.
Bump CDs
If you think interest rates might rise during your CD’s term, you might consider a Bump CD. This type of CD allows you to request a one-time increase in your interest rate during the CD’s term, if rates go up. Keep in mind that BECU offers Bump CDs for 12-month or 24-month terms only.
Add-To CDs
BECU also offers CDs that allow you to add to your deposit over time. These “Add-To” CDs require a lower minimum deposit to open — just $100.
Other CD Benefits
All BECU CDs share a few attractive features: There are no monthly maintenance fees, and you can access your account information easily online.
BECU CD Rates Compared to Other Banks
When you’re shopping for a CD, it’s important to compare the rates offered by different banks and credit unions. Here’s how BECU’s CD rates stack up against some of its competitors.
Short-Term CD Rate Comparison
BECU’s rates on CDs with shorter terms are usually lower than you’ll find at online banks like Capital One and Ally Bank. For example, you might find that BECU’s APY on a 6-month CD is significantly lower than the rates offered elsewhere.
Long-Term CD Rate Comparison
If you’re willing to lock up your money for a longer period, BECU’s longer-term CD rates (3 years or more) can be quite competitive, especially if you have a Member Advantage account. With a Member Advantage account, BECU often offers higher rates than many other banks on these longer-term CDs.
Factors to Consider When Comparing Rates
Keep in mind that to get the best rates at BECU, you’ll likely need a Member Advantage account. When you’re comparing rates, always look at the APY (annual percentage yield) to see the actual return you’ll get on your deposit. Be sure to compare the APYs and the terms (the length of time you’ll be locking up your money) across different banks and credit unions to make sure you’re getting the best deal for your specific needs.
Understanding CD Penalties and Maturity
It’s important to understand how early withdrawal penalties and CD maturity work before you commit your money to a certificate of deposit.
Early Withdrawal Penalties
If you take money out of your CD before it reaches its maturity date, you’ll likely be penalized. The penalty structure varies, but it’s generally based on the CD’s term length. For terms of 12 months or less, the penalty might be 30 days’ worth of interest. For longer terms, it could be 90 days’ worth of interest.
For example, some institutions charge 60 to 90 days’ interest for shorter-term CDs and up to a year’s worth of interest for longer-term CDs. Make sure to factor in the potential hit you’ll take if you need to access those funds early.
CD Maturity and Renewal
When your CD reaches its maturity date, it will automatically renew for another term at the then-current interest rate. BECU, like many credit unions and banks, provides a 30-day notification period before renewal and a 7-day grace period after renewal. This gives you time to decide whether you want to change the term length, withdraw your money, or make other adjustments to your account.
Is a BECU CD right for you?
BECU CDs offer several advantages, including a range of CD types, flexible term lengths, and the “Add-To” option. However, their short-term rates might be less competitive than other banks, and you’ll face penalties for early withdrawals.
CDs are generally low-risk, but they’re not the best place for your emergency fund. Consider your financial goals and how comfortable you are with potentially tying up your money for a set period.
To get a better idea of potential earnings, try using a CD calculator like the one SmartAsset provides. And remember, talking to a qualified financial advisor can provide personalized advice based on your unique situation.
Conclusion
BECU CDs offer a variety of terms and rates, giving you several options when you’re looking for a safe place to grow your savings. Remember to consider the minimum deposit requirements, early withdrawal penalties, and how the interest rate compares to other CDs and savings accounts.
Before you invest, read the fine print and make sure you understand the terms and conditions. It’s important to think about your financial needs and goals to decide whether a BECU CD is the best fit for you.