Posted by Chuck on December 10, 2018
High-Yield APY Accounts

Published on December 10th, 2018 | by Chuck

48

Navy Federal 3.75% 40-Month IRA CD + $100 Signup Bonus

The Offer

Direct Link to offer

  • Navy Federal CU is offering a special 3.75% APY 40-month CD rate for IRA accounts.
  • First-time IRA plan holders get $100 who open an IRA with $100 or more.

The Fine Print

3.75% Offer

  • Limit one Special 40-Month IRA certificate per member.
  • This offer, including the stated Annual Percentage Yield (APY), is effective December 3, 2018. Navy Federal reserves the right to end or modify this offer at any time.
  • The Special 40-Month IRA Certificate has a $50 minimum and a $150,000 maximum balance.
  • Only available for IRAs or ESAs.
  • Additional deposits are allowed at any time, subject to the maximum balance and IRS contribution limits.
  • Penalties apply for early withdrawals from certificates.
  • Other restrictions may apply.

$100 Offer

  • This offer is effective December 3, 2018 and can end or be modified at any time.
  • Offer only available to members who open their first IRA plan and deposit a minimum of $100 in the new IRA account no later than 45 days after account opening.
  • Limit one IRA $100 bonus per member.
  • Once funds have been deposited to the IRA, Navy Federal will credit the bonus directly into your new IRA account within 30 days.
  • The IRA $100 bonus will be credited to your IRA in the form of a dividend and will not be reportable as a contribution.
  • Penalties apply for early withdrawals from the certificate, including any earned dividends. Members should consult a tax consultant or obtain legal advice regarding any tax implications related to the dividend.
  • Taxes related to the IRA $100 bonus are the member’s responsibility. Navy Federal does not provide tax advice.
  • Other restrictions may apply.

Our Verdict

I imagine setting up an IRA is a hassle people would avoid just for the bonus, but if you’re in the market for an IRA and qualify for Navy Federal membership (military families), 3.75% is a nice rate for a 4o-month CD, and the added $100 bonus for first-time IRA plan holders sweetens it further.

Thanks to reader David for sending this in and to others who have mentioned this as well. There was a similar offer earlier in 2018 for $100 bonus.



48
Leave a Reply

avatar
 

  Subscribe  
newest oldest most voted
Notify of
lingua
lingua

Is it churning that got me used to only locking money away for a few months that makes me so uninclined to lock 100 away for 40 months, despite the easy double my money bonus?

AmzH8ter
AmzH8ter

I relate so much with this comment!

Snorlax
Snorlax

It’s an IRA, you’ll lock it away until you are 59½

Alex
Alex

Does this – https://www.doctorofcredit.com/nfcu-open-ira-get-100-bonus-2-75-apy/ – preclude me from getting this bonus?

Matt

If this was a normal CD I’d be all over it. IRA certificates are lame.

Sean
Sean

Just to provide a helpful data point, the 40 month ROTH IRA CD works as well. I called in to find out – my plan is to:

1. Open the 40mo ROTH IRA CD with $100
2. Collect the $100 bonus and the 3.75% rate for the 40 months
3. Roll over the funds into my main ROTH IRA.

Steve
Steve

I have Roth IRA with Vanguard in VFIAX S&P 500. How do I roll over Navy Federal Roth IRA CD to Vanguard? Is there any fee?

Jeremy
Jeremy

I don’t think Vanguard charges any ACAT fees.

Snorlax
Snorlax

You’ll have to check the fee schedule on both sides (Navy Federal and Vanguard), but there’s not likely to be any fees, or at least minimum fees.

As far as how you do it, you just fill out a securities transfer form with Vanguard.

millionairenextdoor
millionairenextdoor

I called in for more information and also decided to open the Roth IRA option.

Matt P
Matt P

Comes out of to around 6.5% apy over the 40 month period if you only put in $100. Doesn’t seem worth the hassle.

DAVID
DAVID

Your math is wrong.

200 * (1.0375)^3.333
226.1092612 Vo = Value at end of investment

100*(1+X)^3.333=226.11 Vi * (1+ interest rate) ^ years of investment
(1+x)^3.333=226.11/100 Vi = Value initial
(226.11/100)^(1/3.333)
1.277340145
27.7% annualized rate of return

Jeremy
Jeremy

27.7% annualized rate of return is definitely worth it. That’s better than most years of the S&P 500 with 0 risk. I may need to actually look into this. Can you give the annualized rate of return at varying deposit amounts?

DAVID
DAVID

the formula is there for you to use. Basically your first deposit of $100 earns 27.7%. More than that will earn the Navy’s stated rate of 3.75%

Ben
Ben

If anyone is depositing retirement savings in a CD, you had better be months from retirement or have the risk tolerance of an armadillo!

gary
gary

its known as assett allocation. a % should be in insured assets.whether in an ira or not, is more of taxes

Jan B
Jan B

Yes, there is a world outside of what is prominently discussed here. Tax savings is smart, too.

Keith
Keith

The recent volatility in the stock market may mute returns in years to come. I think for the additional risk one must take, 3.75% annual return looks awfully nice.

Ken
Ken

1+. Recently opened one. I’m thinking to transfer my Roth IRA from a broker to this one b/c of possible bear market.

JT
JT

Damn I think I already got a $100 Roth bonus from NFCU or I would hit this up.

Andrew
Andrew

Anyone knows how smoothly I can open this with the minimum deposit and then roll over another NFCU IRA CD when it matures in a few months?

tro
tro

To me it looks like you can currently direct existing certificates to renew into this special certificate.

https://myaccounts.navyfederal.org/NFCU/accountservices/ifse?id=maturityinstructions

Log into your account and go to this link. If your certificate is maturing in a few months, like mine, you should already be able to select it and direct the full amount to renew into the 40 month special certificate – it was actually the first option on the drop down for me.

However, I haven’t actually done this before, so I don’t know if you could run into problems if they end the offer before your maturity date (which would obviously be bad IT but not out of the question).

I also don’t know if you have the option to direct maturity into another _existing_ CD because I only have one open right now. If someone else knows I would be interested to find out as well.

Ken
Ken

Better to open this 40-month account now with $50. Then update the maturity instructions of the existing account yourself or call NFCU to transfer the full balance to the new account on the maturity date.

Ken
Ken

It’s very simple and straight forward. Just open this IRA account with the minimum deposit. Then update the maturity instructions to rollover the full balance to the new account. Call NFCU if you need help.

Ken
Ken

If you’ve maxed out your IRA contribution for 2018 and have earned at least $50.00 in dividends, you can use the dividends to open this IRA CD. If you don’t have enough dividends and still want to open this account, take an early withdraw of $50 from an existing IRA and pay a small penalty.

Andrew
Andrew

Could this be dividends from any year or just 2018? I have a roth IRA with vanguard I’ve maxed out for the last 6 years, could I just take $50 out of that, and in 40 months roll it back into vanguard?

Snorlax
Snorlax

This is bad advice, you could sell some stock in your existing IRA and do a cash rollover to NFCU.

Jan B
Jan B

Why not just spare $50 from your emergency fund to fund this IRA CD and skip the penalty phase? Time is money but so is simplicity.

Mike Advantage
Mike Advantage

How do you guys sign up for Navy Federal?

My Dad was in the Navy, but he’s older now and probably not interested in taking the time to join another credit union. Is there any way that I can get a Navy Federal account without having to convince my Dad to apply for an account for himself?

I was also interested in a credit card they offered earlier this year. So this is the second time that I’ve wanted to sign up.

Thanks

Chuck

Looney Tunes
Looney Tunes

You should be able to join by providing a document from your family member who served but who doesn’t want to join the credit union.

They list the the requirements on their Membership Eligibility page under Family Members>Join Now>None of these apply. Show me more>I have a family member who serves or served in the military.

You have to call 1-888-842-6328, you can’t apply online

Bill
Bill

If you happen to have a branch near you, I discovered that they are more lenient on proof if you apply in the branch (or at least were for me). My father was in the Army but I was not able to get any proof from him, but they took my word for it.

Jan B
Jan B

My children are members because of their dad’s service. No mil dep ID needed.

Mike Advantage
Mike Advantage

Can anyone here sponsor me for a Navy Federal account?

CLH Comment
CLH Comment

Not unless you want to move in with a random stranger from this response thread. – That’s they only way they could qualify you. Follow the advice given above, your father doesn’t have to sign up to qualify through him.

Similarly, My Father didn’t want to sign up: I either didn’t know I qualified anyways, or I didn’t want to ask him for paperwork. (I don’t remember “Veteran” being an eligible qualification back when I joined. I thought they either had to be Active Duty or Retired Military.) So I followed an alternate route:
First, my parent’s are divorced so I don’t believe my Mom would qualify through him. That’s a moot point since my uncle, (Her brother) serves. Basically , I got her signed up and then that qualified me with just her membership number and statement that she’s my mother. I.e. I don’t qualify through my Uncle since he’s not my immediate family, but he is my mom’s immediate family. Once she joined, I was eligible.

If you don’t want to ask your father for paperwork, most Credit Unions don’t require anything more than the basic share account to join. My Mom had nothing more than the ($25?) basic minimum for years. (I eventually got her a Credit Card to rebuild her credit, since they are so generous on approvals. – Side note: I don’t recommend actually using their cards.)

Basically you’re really fortunate that you have a solid way to qualify. You’re either going to have to convince you’re dad to give you a paper showing he’s a veteran, or get him or another immediate family member to actually join. – You could just give your father the money for the share account. They occasionally run some decent bonuses, so if you time the sign up right, you might be able to get him a referral bonus for referring you, or some other bonus like the one available here.

NFCU has it’s own flaws, but IMO they have some great perks that makes them worth taking the effort.

Danno
Danno

Some people have kind of a negative impression with it being an IRA account, which I understand but with the Roth you can withdraw your principal and roll over the interest to your brokerage IRA if you so choose. That’s my plan: Put in $5,500 before the end of the year, another $6,000 at the start of next year, when the CD matures I’ll pull out my $11,500 contribution and decide if I want to move my roughly $1,500 in interest into another account or just do another CD with NFCU (depending on their specials when that time comes).

Snorlax
Snorlax

You shouldn’t have to withdraw, you should be able to roll over to Fidelity or Vanguard or whoever when the CD matures.

Danno
Danno

Yeah, personally I’ll keep the contribution in a Roth IRA. I like NFCU certificate specials as a place for my “fixed income” portion of my portfolio. Just trying to give some options for anyone who may want to get the 3.75% return without having all of their money tied up until retirement. Even if I didn’t plan to leave the principal in a Roth IRA, I’d still jump on these to squeeze some extra interest out of my money and then consolidate those accounts at a later date.

Ken
Ken

Beware there are a lot of complaints and bad reviews about Vanguard services which have been going from bad to worse. Google “Vanguards reviews complaints” and you’ll see. I’m planning to move my 401K to another broker at the beginning of next year. Fidelity is one of my options due their zero-fee funds, trading support, and local offices. Please share other brokers if you have great experience with them.

Bill
Bill

If I open a Roth IRA to get this bonus, will the $100 be taxable? I’m guessing not if it’s reported as a dividend.

Back to Top ↑