5.64% 6-Month CD at a Washington State Bank (Indexed to Prime)
Jul 4, 2006 - 12:47 PM by Ken Tumin
Seattle Savings Bank is offering a 5.64% APY variable rate certificate of deposit called the Option Plus CD. The rate is indexed to the Prime rate. There is no penalty for withdrawal after the first 6 months, with a 30-day notice. During the first 6 months, the penalty for early withdrawal is 90 days of interest. The minimum opening balance is $25K. There's a $10K minimum balance. Deposits of $1K minimum are allowed during the first six months. The bank is also offering a 3-month Option Plus CD with an APY of 5.38%.
The bank has branches in and around Seattle.
I had first reported on this Option Plus CD on June 8th. Since the rate is indexed to the Prime Rate, the new rate is about 0.25% higher now. Note, the Prime Rate is generally 3% above the federal funds rate. A commenter just recently asked about a Prime-indexed CD that I had reported back in April. That one was a 5-year CD with a variable rate equal to the Prime rate minus 1% which would be a good deal now. Unfortunately, it's no longer listed. However, I thought it would be useful to look back at other variable CDs from my previous posts and see if any are still being offered. This one from Seattle Savings Bank seems to be the best deal now.
The bank has branches in and around Seattle.
I had first reported on this Option Plus CD on June 8th. Since the rate is indexed to the Prime Rate, the new rate is about 0.25% higher now. Note, the Prime Rate is generally 3% above the federal funds rate. A commenter just recently asked about a Prime-indexed CD that I had reported back in April. That one was a 5-year CD with a variable rate equal to the Prime rate minus 1% which would be a good deal now. Unfortunately, it's no longer listed. However, I thought it would be useful to look back at other variable CDs from my previous posts and see if any are still being offered. This one from Seattle Savings Bank seems to be the best deal now.
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Anonymous - #1, Tuesday, July 4, 2006 - 6:27 PM
Hello all –
I have access to Prime minus FDIC insured CDs. $50m minimum, settlement at Bear Stearns Securities Corp. As Ken suggested earlier, the Fed Funds Rate is generally 300 basis points below the Prime rate.
Just for an example, lately I've been selling 12-month prime minus 265 basis points; current APR on the CD is 5.60% (since Prime is 8.25% & FF Rate is currently 5.25%). We take Prime according The Wall Street Journal on that given day. The CDs pay monthly interest via check and re-set monthly as set by the WSJ stated Prime rate. I would be able to facilitate ACH interest to your checking if preferred also.
There are 4 more Federal Open Market Committee meetings before year end (8/8, 9/20, 10/24 & 12/12). There have been reports from the large firms on Wall Street of FF rate being in the area of 6% in the near term. That being said, these are pretty safe instruments given the time periods of 12-24 months, structurally correct, in my opinion. It is not that often that you are able to ride this last "wave" of hikes in order to increase yield on a normally locked type investment.
I have inventory of the following:
12 month Prime -265 bpts
18 month Prime -255 bpts
24 month Prime -250 bpts
These deals are written daily so rates are subject to change. They are also subject to being oversold. (Financial institution names and financials are available upon request). All are FDIC insured up to $100,000.00.
There is no fee to open/maintain the account with Bear Sterns Securities Corp. via our firm, Financial Northeastern Securities Corp. www.financialnortheastern.com.
I normally deal with institutional investors (banks, non-profits etc). However, I do handle investments for high net worth individuals. My individual clientele is mostly affluent investors who prefer CDs in larger denominations because of the carefree investment ease that it provides. I try to guide my clients to stick to “CD Ladders” in order to minimize risk in interest rate cycles. My typical trade for an institution is $100m. For individuals, the minimum is $50m. Again, there are no-fees associated with the opening/maintenance of the Bear Stearns account and there is NO COMMISSION charged to you. My firm is already paid a fee from the institutions we are funding. We are on target to underwrite close to $20 billion in 2006 alone. I can send information on our company if you would like to read further. I would only prefer to be contacted by investors that buy CDs/US Gov't Agencies as an efficient means of investing and place larger block trades $50k and above.
Please call me if interested. I can be reached at (800-362) 9876 ext 203. Thank you,
Greg Taylor
(CRD # available upon request)
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