Andrews Federal Credit Union 84-Month Certificate at 3.01% APY

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Updated 1/23/17. It appears that Andrews FCU has quietly added back this 7-year 3% APY CD on their share certificate rates page. I don’t know how long this will last. Thanks to FI35 for the tip. Please see my Andrews Federal Credit Union Application and Account Opening Review for more details on the opening process. As I have an active account with Andrews FCU, I verified it as an option today (1/23/17) to open directly online. (Click to enlarge.)


Original post:

Let’s take a closer look at this 84-month Share Certificate at 3.01% APY. The early withdrawal penalty is a rather modest 180-days of interest. The minimum opening deposit is $1,000. No maximum balance cap. I created a spreadsheet to calculate the effective interest rate if you withdraw early, and here are the results visually:


If you withdraw after one year, you’ve still earned 1.50% APY after paying the penalty. After 2 years, you’ll have earned 2.25% APY. After 3 years, you’ll have earned 2.51% APY. At all these intervals, you are ahead of nearly all the top rates from other banks and credit unions.

If you don’t qualify directly, anyone can join the credit union by first joining the American Consumer Council for $8. Try the promo code consumer and you should be able to save that five bucks. After that, join AFCU online, and deposit the minimum $5 to open a share account. After your share account is open, you can try to open the promotional CDs online. Alternatively, you may need to call them up directly and expedite things.

Please see my Andrews Federal Credit Union Application and Account Opening Review for more details.

I am striking out the refer-a-friend bonus text below because I no longer see it advertised on their site. This way I can keep the details in case they bring it back.

$50 Refer a Friend Bonus. As part of the holiday promotion, new members can also get a $50 cash bonus if referred by an existing member. The referrer also gets $50. However, the referred person must open a checking account and set up direct deposit of $500 or more. Here are the exact terms:

Refer a friend offer available to existing Andrews Federal members who refer a new member to the credit union. New member must open a new Free or Advantage Checking account with a direct deposit of $500 or more. Direct deposit must be initiated within 30 days of opening new Free or Advantage checking account, and must be received for at least two consecutive monthly statement cycles for both members to be eligible for reward. Account must remain open and in good standing for at least 90 days; accounts closed prior to 90 days will be ineligible. $50.00 will be credited to the referring member’s and the new member’s credit union accounts within 4 weeks after the 90- day period has ended. New member must qualify for credit union membership, which includes the opening of a Base Share Savings account with a minimum balance of $5.00.

I am not exactly sure how this works in practical terms. I believe that during the application process there is a question “Where Did You Hear About Us?” and you can pick “Family/Friend Referral” and you can leave your friend’s name and Andrews FCU membership number in the comments field. If you are looking to open up a checking account and set up direct deposit, I am a member now so if you want a referral please contact me.

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  1. Great information. I joined the ACC and entered the code. They never asked for any money and immediately e-mailed me a Certificate of Membership with a number. I then used that number to join the AFCU and buy the 6 month certificate as well as open a checking account. Unfortunately, the only funding mechanism offered was an ACH transfer from my bank. I tried buying the 6 mo 3.00 APY for 15K but was limited to 1K as the maximum allowed when transferring money from any financial institution other than AFCU. Hopefully once an established customer I can fully benefit from future deals. Thanks for the tip!

    • Glad you found it useful! I got the ACC membership without any fee as well. I signed up for the $5 share account and hopefully can open a CD with more than $1k later on by then linking up with Ally bank, transferring money over using Ally bank as initiating hub (should work with other online banks with free transfers as well), and then funding a CD once the funds are already at AFCU.

  2. Is there a hard credit inquiry for joining the credit union and opening the share account and a CD?

  3. Can someone clarify the time involved from start to finish?

    The black friday link says Nov 30th deadline. So if I were to start from ground zero on Monday morning, do I have sufficient time to get in this offer assuming I am also an external customer who will need to do ACH from my bank to fund ?

    I am trying to get into the 84 month deal..and its awesome!

    Also, is this a locked in rate? as in it will not go down and assuming they do compound interest.

    Will I get 12,298.74 for 10k invested in this offer assuming yearly compounding and keeping for 7 years?

    • I would recommend calling and verifying that it has been extended to 12/31. I’m pretty sure it has, just the website is not updated. I would apply by 11/30 and confirm that they will let you fund by 12/31.

      • The offer is extended until 12/31 for sure.

        The way the process would work
        Open and account (apply for one online following steps in this blog) and get an account number (turnaround 72 hours)
        Link an external bank acct and initiate ACH FROM external account to default share savings of the credit union
        Once money available in share savings, go ahead and purchase the 84 month share certificate

        • Rudi Pittman says

          As a follow up….once you have money into the andrews saving account you can already have them setup the CD’s. They will temporarily remove the hold on the funds, create the cd’s and then put the hold back on for the normal period of time for funds to clear.

          You might also check if andrews has a “local affiliate bank” in your area. I was able to drive to one of my credit unions, get a cashiers check then head over to “Atlanta Postal Credit Union” and deposit the money into my Andrews account. I then called Andrews and they were able to pull it across bypassing the normal hold APCU would have and setup the cd accounts.

          If you max out the NCUA insurance by depositing $250,000 into the savings/cd’s then you will certainly want to have the interest from the cd’s paid out to your savings account so you can pull t hat money out on a quarterly basis to another account where it is protected via FDIC or NCUA (the credit union version). This will lower your APY from 3.01% to 2.98% because no compounding will accrue.

          • if u got 250k then its smarted to just put 203,135 usd so after 7 years u get the full 3.01 intrest and ur account will be at 250k, and u can put the other 47k in another bank at 3% if u r worried about the FDIC insurance thing

            250k x 7y x 2.98 = 307,050.79
            250k x 7y x 3.01 = 307,677.49

            203,135usd x 7y x 3.01 = 250,000.26

            anyways guys 1 important thing to note is once u open the CD they tolled me that u cant add to it, so that kind of sucks, but they said that u can open many of the same cd’s so if u r trying to make ur money more accessible open one 7 year cd ever year or so so that after couple of years u will have a maturity date coming on one year intervalls if u need the money or find a better rate somewhere else, just my tip to u

            also Navy FCU have a 3% cd but they only allow max 13k in it, but u can open with 50usd and then add more money as u go any day ur cd is open up to 13k max. its a good deal but it sucks that there is a 13k max not like afcu u can put as much as u want but only on account opening day. so for me i will open each new afcu 7y cd each month i get my money so it will grow at 3% and mature on different moneys/years in the future.

            hope this all make seance to u and is helpful

          • Rudi Pittman says

            @homer Good information but you are assuming the person is going to keep the cd for the full 7 years. If rates continue to rise and better offerings some out then fully loading the cd with $250,000 is going to come out ahead. You also have the money to invest in other offerings so are not losing the full amount of APY. (ie Ally’s 11 month no withdrawal penalty CD is paying 1.50% and you could jump out of it to a better rate at any could be socking away the excess there)

  4. I was debating mentally a lot about how this would be better than paying off my 4% mortgage, and then stumbled upon your earlier discussion.

    Spot on !!

  5. I just got off the phone with someone at ACFU and she said what Stacy did — that it’s been extended to 12/31.

    “For most people, the best deal is the 84-month 3.01% APY certificate because the early withdrawal penalty is a rather modest 180-days of interest.”

    Regarding this, Jonathan, the rep I spoke to noted (unless I misheard her) that the early withdrawal penalty is 90 days of interest if done within the first 24 months, and 180 days thereafter.

    “After your share account is open, you can try to open the promotional CDs online. Alternatively, you may need to call them up directly and expedite things.”

    The rep also told me that I would need to call back to open the CD rather than doing it through the website. The same is true of closing it, according to her.

    Thanks for the article about this!

  6. Jonathan, I finally got my application accepted. This is the most user unfriendly banking site I’ve encountered. Apparently, after your application is accepted you must join “Smart Connect”. I haven’t a chance to explore it further but they let me have a 6 mo. CD for $1000. Thus far hasn’t been worth the effort, but hopeful if I can ever figure out how to get into the actual banking site.

    • Rudi Pittman says

      Netteller/smart connect is the service they use to access their accounts online. Other banks also use netteller.

      It’s the only realistic way small banks can provide online access, bill pay etc. Keep in mind andrews is a small credit union based out of maryland. They never intended for this offer to be so widely distributed but have stepped up and are trying to handle it as best they can. Their call center is overwhelmed so have a little patience. I’m not fond of 30 minute wait times to reach customer service but I’ve found the actual staff to be very friendly and to go out of their way to help.

  7. Anybody know which credit bureau was pulled when applying?

  8. How do you set up an external account on their site? I can’t figure it out!

  9. I submitted my application (to open a savings accounts so I can buy the 3 mo 3.01% CD) last night and called now to expedite its opening. I was told that there are many ahead of me but since I submitted the application before the end of the promo period, they will honor it when it opens.

  10. Does anyone know what are the tax consequences of the early withdrawal penalty? Specifically, will I have to pay taxes on the forfeited interest?

  11. Inflation 2.15$
    In 7 years, inflation will be much higher. Gundlach is a big TIPS fan.
    3% over 7 years is crazy. Just absolutely not something anybody should do.

    • You can always take the $$ out early Paul. It’s not actually locked up in the account.

    • This is the best CD available at this time, by far (better than even a 30-year Treasury currently), and is still on par with the next-best after the early withdrawal penalty if you hold it at least 2 years. So pull out in 2 years if you find something that’s actually paying better at that time (or even earlier, if it’s that much better).

    • I don’t think anybody here is advocating holding this CD for seven years. FYI, 7-year TIPS are currently yielding 29 bps, which means inflation over the entire seven year period would have to exceed 2.71% to be better off in the TIPS. I agree that 3% over 7 years isn’t great, but its better than a 10-year T-Note which is currently yielding 2.53%.
      But the point here is you can create a 2-year CD with a yield of 2.25%, which is compelling. A high-yield savings account only pays 1%. Two-year nominal Treasuries are currently yielding 1.24%–this is significantly better than that. And 2-year TIPS are currently yielding -83 basis points, meaning inflation would have to be nearly 3.1% for the next two years, starting now, for the TIPs to match this total return. For that to happen, if inflation is 2.15% in 2017 it would have to exceed 4% next year.

  12. “Updated 1/27/17.”

    Did you mean 1/24? The 27th isn’t until Friday. 😉

  13. from day you submitted application how long take (same day?) to send you customer id number? i submit mine friday night last week and no word yet.

  14. I’ve read through all the posts and all the information on the credit union website and see no instructions on how the 7-year CD can be canceled. Does anyone know the process? Does their website have a mechanism or do you have to call or must it be done in person?

    • It definitely doesn’t have to be done in person, lol. The way the account information is displayed on the website, it appears to allow for online partial withdrawals as long as you leave at least $1000 in each CD. It’s unclear whether partial withdrawals would pro-rate the penalty or not. To close them out entirely, I’m pretty sure you’d have to contact them in some manner – phone, secure message through the website, or mail.

    • I had the 84 month special from when it was first offered. I was able to close the CD this year (with penalty applied) online through secure messaging. It was pretty straight forward

  15. Rudi Pittman says

    Since interest rates have come up (Ally has a no withdrawal penalty 11 month cd paying 1.50%…Dollarsavingsdirect has a savings account paying 1.40% and other banks are offering 1 year cd’s for 1.70% along with higher rates for longer terms) how long do you recommend continuing to hold onto this one before considering alternate offerings?

  16. I followed your guidance in January and open a $250k share certificate at Andrews FCU at 3.01% APY. Prior to that I was earning 0.90% APY on my cash equivalents in an online bank. Very grateful to the MyMoneyBlog for timely and detailed information. There were a number of hurdles doing this remotely, buy you walked readers through the process in a very clear and helpful manner.

  17. Thanks Jonathan, I took advantage of this when it was first out. Now, 3% CDs are back at Andrews Federal with less time commitment (55 months) …

  18. DirtyLilRat says

    I’m thinking of breaking this CD in order to take advantage of the new rates. My CD matures in Feb ’24. Anyone else considering this?

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