Credit Unions Dangle High-Rate CDs

Apparently, toaster giveaways are passé.

Another knickknack is beckoning consumers to join financial institutions: high-rate CDs.

A handful of credit unions are offering promotional short-term CD rates that exceed 7% annual percentage yield.

It's quite a rate, given that secondary-market six-month CDs were selling at 3.2% recently.

You can invest only a limited amount in the promotional CDs. And the CDs have other limitations: Many are limited to new members. It's effectively a complicated way to give you some cash back for joining.

So we searched BankingMyWay.com for credit unions' high-rate CD promotions and calculated how much above the average CD rate a new customer could earn. Calculations used national average APYs of 2.76% for 12-month CDs and 2.63% for shorter-term CDs.

Other terms and conditions may apply, and consumers must meet eligibility requirements to become a credit union member.

Here's what we found:

• New members of Patelco Credit Union would earn about $42 above the market rate investing in an introductory CD of $1,000 at 7% APY for 12 months.

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• Pacific Service Credit Union in California is offering new members who invest between $1,000 and $1,500 in six-month CDs a 7% APY for six months. New members 23 or under can invest as little as $100 to qualify for the rate. Consumers investing the maximum would earn $32 above the market rate.

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• In Colorado, Elevations Credit Union new members who open a checking account, or members who open a new dividend-bearing checking account, can invest between $1,000 and $2,000 in a CD at 9% APY for 12 months. Consumers investing the maximum would earn about $124 above the market rate.

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• Educational Community Credit Union in Michigan is offering its members a $500 CD at 8% APY for eight months. Consumers would earn about $17 above the market rate.

Here's a look at the national averages for rates on various types of CDs:

Local CD rates are available here.