Lake Michigan Credit Union CD Rates

Lake Michigan Credit Union 12 Month CD

4.90% APY

Lake Michigan Credit Union serves residents in Michigan and Florida. Its wide selection of certificate of deposit (CD) terms range from three months in length up to five years. All of those terms are available as part of a retirement account. The minimum deposit requirement of $500 also makes the accounts accessible to many customers.

Unfortunately, the standard CD rates don’t stack up very well with the best CD rates. Members can qualify for a higher rate and you can get a significantly higher rate if you open one of the current special CDs. Continue reading for more on those rates and how you can maximize your CD earnings.

To calculate how much interest you could earn with a CD, try using SmartAsset's CD calculator.

Special CDs

Standard CD Terms

12 Month CD Interest Rate Comparison

Overview of Lake Michigan Credit Union CDs

Lake Michigan Credit Union (LMCU) is based in Grand Rapids, Michigan. It serves residents of Michigan’s lower peninsula. Through acquisitions of other credit unions, LMCU also serves Florida residents in the counties of Charlotte, Collier, Desoto, Glades, Hardee, Hendry, Highlands, Hillsborough, Lee, Manatee, Monroe, Palm Beach, Polk and Sarasota. In 2018, LMCU also acquired Encore Bank in Florida.

LMCU offers many CD terms, ranging from three months up to 60 months (five years). All terms are also available to use in an individual retirement account (IRA) or health savings account (HSA) with the same rates. Certain terms will have special rates that are higher than they would normally be. Regardless of what kind of account you have, you will need to deposit at least $500 to open an account.

In addition to regular CDs, you may also see Add-On CDs. These CDs allow you to make additional deposits into your CD account during your term. There is no minimum for how much you can deposit and you don’t need to follow a schedule for deposits. This is the only CD account type that allows you to make deposits during your term.

The interest rates for all terms are higher (by 0.25%) if you qualify for the relationship rate, known officially as the VIP Relationship Reward Bonus Rate. This rate is available to all members of the credit union. You can become a member when you open a checking or savings account with the bank.

Once you open an account, interest will immediately start to accrue. How often interest credits to your account will depend on your term. You should ask about the frequency of interest payments before you open an account. Once interest credits to your account, it is considered as part of the principal. If you withdraw any principal before your account’s maturity date, you will have to pay an early withdrawal penalty.

The amount of the penalty depends on how much you withdraw and the length of your term. If you have a term of less than 12 months, you will pay a penalty equal to 90 days’ interest. A term of more than 12 months will have a penalty of 180 days’ interest. That penalty applies to either the amount you withdraw or the interest you’d earn for your entire term, whichever amount is less. You may have to pay additional penalties if you withdraw funds early from an IRA.

You can avoid paying a penalty by waiting until your term’s maturity date. At that point, LMCU will provide you with a 10-day grace period, during which you can make any changes to your account. That includes making additional deposits, withdrawing principal, changing your term length or even closing your account entirely. Unless you close your account, it will renew for a new CD at the end of the grace period.

How Much You Earn With Lake Michigan Credit Union CDs Over Time

With such a wide range of terms available, the amount of interest you earn could vary greatly. The standard CD terms have low rates and you won’t earn much with them. The same is true if you open one of those CDs in an IRA or HSA.

The best way to maximize earnings is to opt for a term with a specialty rate. Those terms aren’t always the same and rates also change over time, so make sure to ask about the current specials before you open an account.

Members of LMCU will also earn a significantly higher rate. It is a good idea to make sure you become a member before opening any CD accounts. Generally, you can also maximize earnings by choosing a longer term and by contributing more money to your account.

The table below shows what your approximate total balance will be based on different initial deposits and term lengths. The rates used for this table are the relationship rates. 

How Lake Michigan Credit Union CD Rates Compare to Other Banks’

Overall, standard CDs do not have very competitive interest rates with LMCU. Even the member rates are not very high. As such, you should certainly shop around and compare CD rates from a few banks before you open any accounts.

The best way to get a competitive rate with LMCU is to open a term with a special rate. However, even those rates aren’t always higher than the rates from other banks. For example, Capital One offers a higher rate for its one-year term. It also has higher rates than LMCU on longer terms (three to five years). There is no minimum deposit necessary to open an account with Capital One.

Another bank to consider if you want a term of one year or more is Marcus by Goldman Sachs. Marcus has fewer term options overall, but it also has terms of up to six years in length. The minimum deposit is also just $500.

Customers looking specifically to save in an IRA should consider working with a broker like Edward Jones. The IRA CDs from Edward Jones have some of the highest rates on the market. They also come in terms of up to 10 years. There is a $1,000 minimum deposit (higher than the LMCU minimum) but the higher rates may outweigh the higher price tag for some people.

*These are the relationship rates, which you can only get after you become a member.

Should You Get a Lake Michigan Credit Union CD Account?

There is a wide range of CD terms available from Lake Michigan Credit Union. However, the standard rates are not very competitive. If you are looking for the highest rates, you should probably only consider another bank or credit union, unless you’re interested in a term that offers a special rate. That applies whether you are looking for a regular CD or an IRA CD. Even if you are interested in the special rates, you can find higher long-term CD rates elsewhere.