High Yield Long-Term CDs at USAA Bank

USAA Bank has some high yields on long term CDs. Currently, the highest yield is 5.97% APY for a 7-year term and a minimum deposit of $175K. The APY for a $95K minimum is 5.86% and for a $1K minimum, the APY is 5.70%. The interest rates are not listed publicly. You must have a member number to access these. Below is a list of all the current rates:

USAA Certificate of Deposit Rates as of 10/30/06

              Annual Percentage Yield (APY)
Term           stnd    jumbo  super jumbo
1 Year         5.20%   5.36%   5.46%
15 Months      5.23%   5.39%   5.49%
18 Months      5.29%   5.45%   5.56%
2 Years        5.30%   5.46%   5.57%
3 Years        5.35%   5.50%   5.61%
4 Years        5.40%   5.56%   5.66%
5 Years        5.65%   5.81%   5.91%
7 Years        5.70%   5.86%   5.97%

stnd = Minimum of $1,000
jumbo = Minimum of $95K
super jumbo = Minimum of $175K

CDs are available for both regular and IRA accounts. The CDs with terms of 1 year and over have a early withdrawal penalty of 180 days of interest. The grace period is 10 calendar days. Interest is paid monthly. You can select that interest payments be reinvested, paid by check, deposited into your USAA account or external account. CDs can be opened online.

The best rates require that you go past the $100K limit. For non-IRA accounts, this might put you over the FDIC limit. However, you can be insured beyond $100K with joint accounts or with qualifying beneficiaries. USAA does allow you to specify multiple beneficiaries. However, this can't be done online. You have to fill out an ammendment to the CD with the multiple beneficiaries. Refer to this post for more info on FDIC insurance.

USAA has changed its membership eligibility this year. They use to allow anyone to join. As of June 30, 2006, you must either have a military affiliation, be a current bank customer or be a resident of Bexar County, Texas (which includes San Antonio).

In addition to high yield long-term CDs, USAA also has competitive checking and money market accounts. This FW thread is a good resource on USAA.

USAA is FDIC insured. It has a safe and sound rating of 4 out of 5 stars (sound) from Bankrate.com.