5/2/16 UPDATE: NRLFCU appears to have stopped the 777 promotion and it is not possible at this time to sign up for the promotional account.
While the master of bank bonuses, Doctor of Credit, is enjoying his vacation, I thought I’d cover the latest opportunity I came across today. NRL Federal Credit Union is allowing members to open a 7-month CD that pays out close to 7% APY on up to $7,000 in funds as a part of their “777” promotion. While this isn’t a traditional “Meet X requirements and get $XXX” bank signup bonus, the payout can be pretty high if you have the funds to float. As far as guaranteed returns go, this is the highest I’ve ever seen. Even the best of the rewards checking/savings accounts only go up to ~5% and often have hoops to jump through with minimum transactions and such. The good news is you can potentially fund up to $9,000 with a credit card, but it might cost you a hard credit pull to open. I’ll break down all of the details below.
- CD Interest: 6.73% APY (with potential to bump up to 7% APY)
- CD Amount Range: $500-$7,000
- 777 CD Limit: 1 per member
- Membership Availability: Nationwide
- Credit Card Funding: Up to $9,000
- Hard Credit Pull:
Most LikelyProbably Not
- Promotion End Date: Unknown
- Direct Link to Offer: NRLFCU Home Page
Thanks to steiner_math on reddit for bringing the promotion to my attention.
Anyone is eligible to open an account at NRLFCU as long as they first join the American Consumer Council which is 100% free to join. They make it extremely easy to join as well and only require inputting your name, address, and email to this web form on their website:
Like many credit unions, you must open their Savings Account with a minimum of $5, but there are no fees to worry about.
777 Share Certificate Details
For the life of me, I can’t find any details about the 777 Share Certificate promotion aside from the picture above found on their home page, but you can see some more information once you start the process of opening an account.
Basically the Share Certificate operates like a normal CD where you put in money up-front and it gains interest at the advertised rate until the end of the CD’s term where you get the full balance back plus interest. In this case, the interest rate is 6.734%+ APY with a term of 7 months.
Early Termination Fee
The basic idea behind a CD is that the bank will have access to your money for the full term and you won’t be able to withdraw it until the end, but it is still possible to withdraw your money in the case of an emergency where you need it. This 777 Share Certificate doesn’t seem to differ from the bank’s other Share Certificates and appears to be subject to the same Early Withdrawal penalty as their other products which is based on the length of the term.
In the case of this 7-month CD, you would be penalized the previous 30 day’s dividends if you decided to withdraw the funds before the 7 months were up. For example, if you withdrew the money after 6 months, you would only gain interest on the first 5 months (6 months minus the 30 day penalty). So you’re not really at any risk of losing money, simply at risk of not getting the full interest.
Increasing the APY Above 6.734%
NRLFCU offers a “Loyalty Rewards” system that allows you to increase the payout on their Share Certificate products by up to 0.25% APY by using different services they offer. Here are the different services that can increase your interest rate:
- Direct Deposit to NRLFCU
- eStatements with NRLFCU
- An active Visa CheckCard with NRLFCU
- A loan refinance from another financial institution
- Apply for a loan or new certificate account online with NRLFCU
- Deposits totaling $250,000 or more with NRLFCU
- A mortgage with NRLFCU
If you qualify for any of the above requirements, your interest rate will increase by the total number met:
- 1 Requirement met = 0.05% increase
- 2 Requirements met = 0.10% increase
- 3+ Requirements met = 0.25% increase
Given the promotional CD is only for a short term, it’s probably not worth going out of your way to max out this Loyalty Rewards benefit. Everyone should sign up for eStatements and opening the 777 Share Certificate online meets two of the requirements for a free 0.10% bonus, but I don’t see any others that justify the effort for the final 0.15% bonus.
Value of the Offer
- Return on $7,000 at 6.884% APY (6.734% + 0.10% Loyalty Bonus) = $281
- Compare to $7,000 in a 1% savings account for 7 months = $41
- Compare to $7,000 split across 5% Netspend accounts = $204
If you have $7,000 simply sitting in an account that is yielding 1% or less that you don’t need for 7 months, there is over $240 worth of opportunity you could take advantage of by shifting your money into this promotional account for 7 months. If instead you’ve already moved all of your cash into high-yielding accounts like Netspend, your total benefit is reduced, but still available if you don’t mind the effort of opening up another account.
Credit Card Funding
The other place you might be able to get value from this offer is via credit card funding to open the account. The account funding page allows you to fund the account initially with up to $9,000 with a Visa or Mastercard. I do not know if any credit cards will run this as a cash advance, so I highly recommend you reduce your cash advance limit to $0 or close before attempting to fund this account.
If you are opening the account with the full $7,000 CD, you can fund it completely and add an extra $2000 to the Savings Account you have to open to maximize the funding limit:
The final page of the application screen forces you to check a box that specifies:
By clicking this checkbox, you agree that the information provided is true and correct. You authorize us to verify the information submitted and to obtain your credit reports. Upon request, we will inform you of a credit pull with the credit reporting agency’s information.
I do not know if they actually follow through with the hard pull if you’re not opening an overdraft account or any other credit based account, but the potential is definitely there if you decide to open an account.
I think this is pretty standard for banks offering CD-like products, but it’s worth noting this info from the fine print on how to access your money after the maturity date. If you don’t do anything, they will roll the money into a 6-month CD at the standard (very low) interest rate, but I believe it would be possible to simply close that account early to get your money out if you miss the initial window.
Twenty (20) days prior to maturity, we will send a notice to you. You may choose to have the matured share certificate transfer to any of your savings or checking accounts. Unless we receive notice from you, the share certificate account will automatically roll into another share certificate account on the maturity date, for the same term range rounded down to 6, 12, 24, 36, 48, 60 or 84 month terms at the then current rate. There is a 10-day grace period after the maturity date, during which you may elect to make changes without penalty. Please call the Credit Union to obtain current rate information.
The close to 7% guaranteed returns were enough to make me jump on opening a new account and the credit card funding will be a nice bonus if it goes through successfully. I attempted to fund the full $9,000 on my new United Business card and will probably update on Twitter whether or not it succeeds. I had Credit Karma soft pull my credit soon after applying and didn’t have any new inquiries on TransUnion or Equifax, so the jury is still out as to whether or not they will actually pull my credit. I’ll also update on Twitter if I find out for sure, but let me know in the comments below if you find out yourself!
If you can float $7,000 for the next 7 months and want to get a good guaranteed return, this is just about the best place to park your money. I would feel comfortable putting my emergency fund in this CD because in the case of a real emergency it shouldn’t be too difficult to pull the cash out and simply lose out on the expected interest. As I currently have my emergency fund sitting in a 0.95% account (Discover Savings), if the credit card funding goes through I’ll get ~$400 worth of value from opening the account. For an account with no minimum spend or other hoops to jump through, that’s definitely worth the risk of a hard pull in my book.
If anyone is able to find a page on the NRLFCU website with more promotion specific details, please let me know below so I can update the post.