New High CD Rates at Virtual Bank

Virtual Bank made some substantial increases to some of its CDs today. The new rates on the 3-month, 6-month and 12-month CDs are 4.50%, 4.75% and 4.90% APY. These rates are now the highest for banks with nationally available CDs. All of the Virtual Bank's CDs have a $10K minimum deposit requirement. Here's a summary of the old and new certificate rates:

Term      Old APY   New APY   Change
3 months   4.25%     4.50%    +0.25%
6 months   4.40%     4.75%    +0.35%
9 months   4.40%     4.40%          
12 months  4.70%     4.90%    +0.20%
18 months  4.70%     4.70%          
2 years    4.80%     4.80%          
3 years    4.90%     4.90%          
4 years    4.95%     4.95%          
5 years    5.00%     5.00%          

The 3-month CD has a one month early withdrawal penalty. The 6 and 9-month CDs have a 3-month penalty. All others have a 6-month penalty. This is based on an email that I received from Virtual Bank's customer service.

One important thing to note is that the 1-year CD has a 6-month early withdrawal penalty. So 6-months interest would be lost for an early withdrawal even if the interest hasn't yet been earned. Many 1-year CDs at other banks only have a 3-month penalty.

Some other information that I received from Virtual Bank's customer service is that CDs can be funded completely online without having to mail the application or check. Applications can be submitted online. If you had an eMoney Market, you could request in your CD application that Virtual Bank transfer funds from the eMoney Market to open your new CD. Otherwise, you would need to either mail a check, or wire the funds.

Once a CD matures, you have 14 calendar day grace period to make any changes to the CD. You can instruct Virtual Bank to transfer the funds to your existing eMoney Market account through the bank's secure messaging system. From there, it's easy to initiate an ACH transfer to your linked checking account. You could also instruct Virtual Bank to mail you the check.

Virtual Bank's Money Market Account and Bonus

Virtual Bank's eMoney Market account is still only paying 3.55% APY for deposits under $50K. Deposits over $50K earn only 3.45% APY. These rates haven't changed since last September 27th.

Although Virtual Bank's money market account hasn't remained competitive, it has done a decent job at keeping its certificates of deposit competitive. It also has a good referral program for its money market account that's comparable to ING Direct's program. Here's a summary:

• You can refer up to 50 friends to open eMoney Market accounts.
• Each friend that opens an eMoney Market account earns $20.
• You then earn $20 for each friend who opens an account.
• You can earn up to $1000.
• A minimum deposit of $100 is required to open an eMoney Market account.

If you are interested in the $20 sign-up bonus, send me an email with your first and last name to [ bankdeals at gmail dot com ], and I'll send you a referral.

As I described above, even if you're only interested in CDs, the money market account is still useful for transfering money for CDs.