A 7.5% APY Certificate of Deposit In This Interest-Rate Environment? Yes, But One Week Only!

Sometimes, junk mail is cool.

I was going through the day's mail, placing the important stuff to one side and shredding the junk. I was just about to destroy a large postcard when I noticed the numbers 7.5 in huge letters on the front of the card. Upon further examination I found that it was an unbelievable offer from a local credit union: 7.5% APY on a one-year certificate of deposit (CD) or a one-year IRA CD!

I know this is hard to believe, so I've attached a scan of the postcard to this blog post. Proof, baby!

According to BankRate.com, the average rate on a 1-year CD is 2.34% APY right now. Not bad really, considering that most banks can borrow money via the Federal Reserve at no more than 0.25%. I understand that other factors influence CD rates, but still: 7.5%? That has to be the best rate in the country! If you can find any better anywhere in the United States, please post a comment below and let us all know.

Of course, the deal comes with some tight restrictions. It's a one-week special from the Freedom Credit Union, which is about a 15 minute walk from my place. They're celebrating their 75^TH anniversary (get it? 7.5 APY / 75 years.) The minimum deposit is $500 and the maximum is a disappointingly timid $1,000. If they get 350 new members before the promotional week is up, the offer is rescinded and no one else gets the deal.

A restriction I don't get: if you're between the age of 13 and 25, you can only deposit $250. What's up with that? I'm an old man so it doesn't affect me, but I think this particular dictate is unfair to young, money-savvy savers and investors.

The Freedom Credit Union is easy to join: if you work or live in my local area, you can become a member. I really like credit unions that are easy to join.

Want a piece of the action? Well, if you live in Pennsylvania you may be able to take advantage of this deal. Here are the requirements:

"...Freedom [Credit Union] personal Memberships are for anyone who lives, works, worships, performs volunteer service, or attends school in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties..."

The 7.5% APY promotion runs from April 18 through April 24. Since the offer ends if/when they get 350 new members, better not procrastinate if you want in. I have a feeling some folks are already setting up camp.

And this is why I choose to keep shredding junk mail instead on opting out of receiving it. You never know what kind of shiny nuggets you'll find among the Chinese restaurant menus and supermarket circulars. Yep.

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