Prime Rate Indexed CD at a Pennsylvania Bank

Nittany Bank has a unique type of CD deal. The CD offers 65% of the Prime Rate for 5 years. You have the option to do a penalty free withdrawal or deposit every anniversary date and 10 days after. There's a $1K minimum deposit. Currently, the Prime Rate is 7.75% so this CD is currently paying 5.04% APY. There's also the same type of CD with a 3 year term that earns 60% of the Prime Rate. Currently, the APY is 4.65%.

A history of the Prime Rate is available here. The Prime rate general runs 3% above the Federal Funds rate. The next two meetings of the Fed occur on May 10th and June 28th. If the Fed raises the rate at both meetings by 0.25%, the new funds rate will be 5.25% and the Prime Rate will likely be 8.25%. This will result in the following rates on these CDs: 5.36% 5-year and 4.95% 3-year. So this could be a pretty good deal. If the rates fall later this year or next year, you can always withdraw the money within one year.

The bank has branches in State College and Bellefonte, Pennsylvania which is about 50 miles northwest of Harrisburg.

Credit for this find goes to a commenter in the finding deals post. Thanks!