First Tech FCU 'Bump Up' rate CDs....Think Twice.....

[Spotsy]

First Tech FCU, like many other banks/CUs, have been offering 'Bump Up' rate CDs, usually on shorter terms such as 7 months, up to 13 months. The premise is to allow you to buy a CD at todays rate with a one time rate increase on your original CD if rates should rise during your time period of that specific CD ownership. Keep in mind that when you purchase a 'Bump Up' CD, the iniital CD rate may be slightly lower then a non-bump up traditional fixed term CD, but the 'Bump Up' feature provides an advantage to accept the slightly lower rate for today. With the Fed raising rates like they are, 'Bump Up' CDs are a cool option to 'ride the market wave'.

Unless you are First Tech FCU, which was at one point was offering a higher rate on their 'Bump Up' CDs, but then suddenly, the 'Bump Up' CDs are now at a lower rate, unless you buy a new 'Bump Up' CD with 'new money (to the bank)', then the rate for the same term new 'Bump Up' CD is significantly higher. Any existing 'Bump Up' CD holders are left out in the cold. Not very cool. Think twice about a First Tech FCU 'Bump Up' CD.

[AndySoCal]

@SpotsyThe promo 13 month bump rate CD is to try to attrach new money into the credit union. If I had money for a CD I would not be looking at a bump rate CD. I would look at a non bump rate CD and lock in the higher rate.  If you were to exercise the bump in a bump rate CD the bumped rate is for the remainder of the term of the CD. . The current rate for existing members non new money for a 13 month bump rate is 3.82%or 3.87. A 12 month CD is pay 4.50% or 4.55%. I do not see any financial advantage at this point in time in bump rate CD.  You can get better CD interest rates at other credit unions and banks.

Here is a link for you to see what is availible. You can customize the search to see what is near where you live

https://www.depositaccounts.com/cd/1-year-cd-rates.html 

[Spotsy]

Why would I get a 12 month fixed CD at First Tech for 4.5 when I can get a promo to the promo 13 month bump rate CD starting at 5.35?  And you are promised that if rates go even higher, they will allow you to increase, one time bump up, to the higher rate....oh wait, First Tech did promise that so I should be able to do that with my existing promo 13 month Bump Up CD....oh wait....First Tech said you can now only bump up if you deposit 'new money' (yes, i am well aware that this is how banks attack new money deposits, guess they are getting low on cash, hopefully it isnt another 'situation')..."sorry, your existing money needs to stay at the 4.5 when you opened it".  But wait...I can open up a non-promo 13 month bump up CD for 3.82% and it will always stay 3.82% no bump up....wait...that is a lousy rate.

What next, a promo promo promo 13 month bump up CD with a now even higer rate since the Feds raised the rates again this week....but wait....can only be new money to get the higher rates.

Hmmm....ya know what this is sounding like...

[AndySoCal]

@SpotsyI understand how you feel regarding "new money only offers". These just attempt to attract new customers to the credit union or bank. I checked the capitization of Frist tech CU on depositaccounts.com and they are well capitalized. In order to get the that rate the money must from  an account outside the First Tech. If you transfer the money to fund the account from a First Tech CU account you will receive the rates I mentioned. The Feds have increased rates yes there is no guarantee the CU will raise rates. If the CU does by how much is a question.  In the link that I included there banks and CU's that pay higher the First Tech.  When I am shopping CD rates if it is a new only rate I see what the normal rates are. If there is a big difference I do not open an account.  In the link there are CU's offering 5.50 for one year and CU that offers 5.70 18 months

EDITED TO ADD Additonal information