Dow Credit Union CD Rates Receive National Recognition
Recent research by the Wall Street Journal recognized the Midland-headquartered Dow Credit Union’s certificate of deposit rates for being among the most attractive in the nation, as market-wide interest rates have created opportunities for savers.
While record increases in market interest rates make borrowing more costly, the environment likewise creates rare opportunities for those seeking to save, according to experts. Certificates of deposit, or CDs, represent one such example. Low-risk CDs function similarly to a savings account; however, with CDs consumers commit funds for a fixed period of time in order to lock in a higher interest rate. Unlike savings accounts, the rates on CDs are guaranteed for the duration of the period, with the caveat that the funds typically cannot be withdrawn without incurring a penalty.
“CDs have been overlooked over the last decade due to the low-interest rate environment reducing the attractiveness of CDs," said Dow Credit Union CFO Sanjay Ahluwalia. "However, the current higher interest rate environment market is creating savings opportunities with CDs that have not been seen for years.”
The Wall Street Journal's BuySide identified three “top” credit unions nationwide for their CD rates, Dow Credit Union being the only institution of the group with a presence in the Midwest. Their research also found that credit unions in general have come to outpace traditional banks through these accounts, with the average one-year CD at a bank paying 1.59% interest compared to 5.27% APY offered for a six-month term at Dow Credit Union.
According to the Wall Street Journal, member-owned credit unions can often pay better rates than traditional banks, as they do not contend with the same shareholder demands, "leaving more money for members."
“CDs are a safe place to park your dollars and lock in higher savings rates," said Ahluwalia. "If you can afford to let some money sit for a while, now is a great opportunity to invest in a CD."