Banking

USALLIANCE Financial Adds 11-Month No-Penalty CD

Deal Summary: 11-Month No-Penalty Certificate, 0.85% APY, $500 minimum deposit, checking or savings relationship for required new members.

Availability: Easy membership requirement.

As CD rates continue to play musical chairs, the 11-month No-Penalty Certificate offered by USALLIANCE Financial (USALLIANCE) has recently become a rate leader. Offered for an unspecified limited time, the 11-month No-Penalty Certificate earns 0.85% APY. The minimum opening deposit is $500, with no stated balance cap.

As stated in the fine print on the No-Penalty Certificate landing page,

An early withdrawal of principal requested prior to the maturity date will be processed as an account closeout for the entire balance with no early withdrawal penalty imposed.

Withdrawals and account closeouts are not permitted to be made within the first 7 calendar days of opening the account, beginning on the date of deposit.

Partial early withdrawals are not permitted during the term of this certificate.

Savings/Checking Relationship

I took a look at the Certificate Special online application for new members and the MyLife Savings (MLS) account was automatically selected. When I unchecked the MLS this notification popped up:

In addition to your Certificate account, please select either a checking or savings account.

USALLIANCE has two savings accounts (MyLife Savings and High Dividend Savings) and a checking account (MyLife Checking) to choose from.

The MyLife Savings account currently earns 2.00% APY on the first $500 and 0.02% APY on any amounts over $500. The MLS can be opened with as little as $1.

USALLIANCE unveiled its High Dividend Savings (HDS) account in January 2019, with an initial 2.30% APY. Its rate remained competitive through the beginning of this year, but since January, there have been four rate decreases, with the HDS currently earning a dismal 0.33% APY.

The checking account listed on the Certificate Specials online application is the MyLife Checking, which is a free checking account with no minimum balance requirement or maintenance fees. It’s also a non-interest bearing account.

As stated in USALLIANCE’s Certificate Accounts Disclosure, the Early Withdrawal Penalty reads as follows:

If your Certificate Account has an original maturity date of less than 18 months,
the penalty amount will equal 180 days of dividends on the amount withdrawn.

According to the Certificate Accounts Disclosure, the ability to withdraw any of the principal before maturity is not necessarily a given.

You may make withdrawals of principal on a Certificate
Account at the discretion and approval of USALLIANCE Financial.

I have included the following in several other USALLIANCE blog posts, but it’s still important information, whether you’re a long-time DA reader or new to the fold.

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POD Beneficiary

USALLIANCE allows unlimited POD beneficiaries to be named, but Social Security numbers are required for each named beneficiary, which can be a deal breaker for some investors. While not requiring Social Security numbers was more common in the past, asking for a beneficiary’s Social Security number seems to becoming the norm.

Accessing Maturing Funds

USALLIANCE Certificates have a grace period of seven calendar days, beginning on the maturity date, although “all term accounts are available for a range of maturity days to permit you to schedule redemption for a business day.” While seven days is on the short side, USALLIANCE has provided an easy method for accessing maturing funds.

Transfer Upon Maturity: If prior to maturity you elect to redeem your Certificate Account
or the Credit Union does not automatically renew your account, the entire balance will be automatically transferred to your Share Management Checking, Share Management Savings, STAR Account or MyLife Account (Checking or Savings) for easy access.
Please note: Jumbo Certificates do not renew automatically.

Once the funds are in a checking or savings account, an ACH transfer can be initiated from another bank.

Right To Call

In previous blog posts, I have mentioned USALLIANCE’s “right to call” any of its Certificates early that, according to USALLIANCE, has never been exercised. Nonetheless, the “right to call” is spelled out in the Certificate Accounts Disclosure, and reads as follows:

The Credit Union has the right to call or redeem Certificate Accounts early. To call or redeem your Certificate Account early, the Credit Union will provide 60 days written notice to you. Should the Credit Union exercise this option, your Certificate Account will be redeemed without penalty on the day specified in the notice, and the entire balance, including earned dividends, will be automatically transferred to your Share Management Checking, Share Management Savings, STAR Account or MyLife Account (Checking or Savings) for easy access.

Availability

Headquartered in Rye (Westchester County), New York, USALLIANCE Financial’s field of membership (FOM) is wide and varied, providing a path to membership for almost any U.S. citizen or resident alien, with a valid Social Security number.

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USALLIANCE revamped their online application almost a year ago and the latest version does not detail the various ways to join on the first page. According to CSR, the different ways to join have not changed and still include,

Easy Membership Requirement: Members of the following associations/charitable organizations qualify.

  • American Consumer Council (ACC)
  • AOPA
  • Arc of Westchester
  • Council of Community Service
  • New York Historical Society Museum and Library
  • The Rye Arts Center
  • St. Thomas Orchestra of Mamaroneck
  • Sullivan ARC (Sullivan County residents only)
  • The Bill Fish Foundation
  • Tread Lightly!
  • Unite Here

Residency: Individuals who live, work, or worship in the Massachusetts counties of Barnstable, Essex, Middlesex, Norfolk, Plymouth, Suffolk, or Worcester are eligible for membership. In addition, individuals who live, work, or worship in the city of West Haven, Connecticut, and qualifying districts in Manhattan, Mount Vernon, and The Bronx, are welcome to join. Following the 2018 assumption of First Jersey Credit Union, individuals who live, work, or worship in the New Jersey counties of Bergan and Passaic qualify for membership.

Employment: Employees of over 175 companies are eligible to join, including employees or retirees of the state or local government in the New York counties of Columbia, Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster, or Westchester.

Education: Registered students, staff, and faculty members of Columbia University and Manhattanville College (both in NYC) qualify for membership, as do members of Columbia University’s Alumni Association.

Religious Affiliation: Members of ten named houses of worship in the New York counties of Bronx, Sullivan, and Westchester are eligible to join.

Joining USALLIANCE and/or opening a No-Penalty Certificate can be done online. According to USALLIANCE’s COVID-19 Updates page,

To best accommodate our members, we will be offering limited in-branch appointments (at the locations listed below) for transactions that cannot be completed electronically through one of our alternative delivery channels (Online and Mobile Banking, ATMs, or Call Center).

  • 1032 Eastern Avenue, Malden, MA
  • Boston Post Road, Port Chester, NY
  • 350 W 31st Street, New York, NY
  • Walmart, 7500 Route 209, Napanoch, NY

Unlike most credit unions, USALLIANCE does not have a Share Account that must be opened with a small deposit to establish membership. The only deposit requirement was at least $1 in the account you wish to open. Based on the new online application, it now appears that either a checking or savings account must be opened.

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USALLIANCE participates in the CO-OP Shared Branching network, providing members access to more than 5,600 branches throughout the country.

Credit Union Overview

USALLIANCE Financial has an overall health grade of “B+” at DepositAccounts.com, with a Texas Ratio of 8.51% (excellent) based on March 31, 2020 data. In the past year, USALLIANCE has increased its total non-brokered deposits by $102.01 million, an excellent annual growth rate of 8.92%. Please refer to our financial overview of USALLIANCE Financial (NCUA Charter # 17587) for more details.

USALLIANCE Financial was chartered in 1966 as a credit union for IBM employees. Formerly known as USAlliance Federal Credit Union, the Credit Union did a rebrand in September 2015 to “help drive home all that we have to offer to potential members.” From humble beginnings in the company’s basement cafeteria, USALLIANCE is currently the 13th largest credit union headquartered in New York State, with more than 121,000 members and assets in excess of $1.9 billion.

How the No Penalty Certificate Compares

As I have mentioned in previous blog posts, no-penalty CDs are not that common, and the longer the term, the more competitive the CD. When compared to other nationally available no-penalty CDs, USALLIANCE Financial’s 11-month No-Penalty CD APY currently shares the top spot with CFG Bank’s 13-month Penalty Free CD APY.

Interest Rate CD Length of Term Credit Union/Bank
0.85% APY 11-Month No-Penalty CD ($500 min) USALLIANCE Financial
0.85% APY 13-month Penalty Free CD ($500 min) CFG Bank
0.75% APY 11-Month No-Penalty CD ($25k min) Ally Bank
0.65% APY No-Penalty 11-Month CD ($500 min) Marcus by Goldman Sachs

The above rates are accurate as of 8/28/2020.

To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.

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