Rate Adjustments on CD’s

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Rate Adjustments on CD’s

A concern which members may have when placing money into a Certificate of Deposit (CD) is that they have locked in their rate and may miss out on new rate increases as the economy and the interest rate environment improve.  This concern may cause you to either go very short and invest in the shorter 6 month or 12 month CDs so you can “ride the curve” if rates go up.  While this is not a bad strategy, it can cause you to miss out on higher rates offered on the longer term CDs (24 months and 36 months) while the market is flat.  Some members will elect to “ladder” their CD maturities and have some scheduled to mature periodically throughout a certain timeframe.  This is good if you anticipate needing some of this money and do not want to pay a fee for early cancellation of a CD but again, may not be the best option to maximize your return.  So, how do you reduce some of the concern?

Over the last few months, your Board of Directors has been considering options which will help alleviate these concerns.  As a result, any CD you have with Vicksburg Railroad Credit Union is eligible for a “rate bump” over the life of the CD.  For every year of term, you will get a like number of opportunities to “bump” or increase your rate for the remainder of the CD (Example:  you have a 2 year CD then you can increase the rate 2 times over the remaining life).  The rates you can choose from when you decide to increase it will be the Vicksburg Railroad Credit Union CD rates in effect at that date for the same term CD you have (Example:  on the 2 year CD above, you will be able to use the current 2 year rate offered by Vicksburg Railroad Credit Union to replace the rate).  To change the rate on your CD, simply call us and we will take care of it right then.  Lastly, the timing of the rate change is up to you.  You could increase your rates as often as our rates change, so long as you do not exceed the number of increases allowed over the remaining life of the CD as shown:

Term of CD                                                Number of increases allowed

6 months                                                   one

12 months                                                one

24 months                                                two

36 months                                                three


We think you will enjoy this flexibility and the peace of mind it can provide when choosing a CD to invest in.  Should you have any question, please feel free to call us at 601.638.3134.