Alliance Bank is offering a 6.98% APY 36-month variable rate IRA certificate of deposit (pdf of rate page). The minimum is $500. The interest rate is 6.75%. The rate is tied to the Prime Rate minus 1.5%. There's a 3-month interest penalty for early withdrawals. According to the CSR, this IRA can be opened by mail from any state. Alliance Bank also offers some competitive regular CD rates ranging from 5.50% APY 2-year CD to a 5.40% APY 6-month CD.
The Prime rate generally runs 3% above the Federal Funds rate. It's likely we'll start seeing some reductions in the Fed funds rates next year. If the rate reductions are small and slow, a variable CD like this that starts much higher than available fixed CD's could be a good deal. However, if rates fall like they did in 2001 in which the Prime Rate fell from 6.50% to 4.75% (see rate history), the fixed rate CD's would be the better deal. The 3-month interest penalty is better than the typical 6-month penalty for early withdrawals. This reduces the risk of losing out too much if rates do plummet.
Branches are located in Culver City, Irvine, Woodland and Burbank, California. The bank is FDIC insured. It has a safe and sound rating of 4 out of 5 stars (sound) at Bankrate.com.