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Netbank Raises CD Rates Again - 5.45% 1-to-2 Year

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Update 9/28/07: NetBank closed by the FDIC. See post more details.

Netbank raised rates again this week on all of its CDs. The 12-month, 18-month and 24-month CDs all have an APY of 5.45%. All other terms have an APY of 5.40%. The minimum deposit is $1,000.

Thanks to the readers who left comments in my last week's post on Netbank. People seemed to have both good and bad experiences with Netbank. Some of the negatives include:
  • The accounts have no ACH ability
  • CSRs are often not aware of the internet promotions
  • Several fees (see Netbank's fee page) including $7.50 for account closure ($25 if closed within 6 months), $5/month fee for 12 months of inactivity on accounts, $5/month for 3 months of inactiviy for bill pay in checking account for balances under $3K.
  • The CDs are slow to open compared to ING Direct CDs

The positives include:
  • Most readers report receiving the bonuses
  • Many readers were satisfied with the customer service
  • You can initiate ACH transfers from your outside bank accounts to deposit/withdraw from your Netbank accounts

Netbank is still advertising the $250 new account bonuses ($75 for a new money market, $75 for a new checking and up to $100 for a CD). For the last year, it has been advertised at this Drugstore.com page. Here's Netbank's promo page. Please refer to my previous Netbank bonus post for more info. Also note that the CSR's often are not aware of these specific promotions. But as I mentioned, many people have successfully received them.

Another downside with Netbank is that they don't have the best financials. In fact their current safe and sound rating at Bankrate.com is only of 1 out of 5 stars (weak). Perhaps they're trying to counter the bad ratings by raising rates. But the bank is FDIC insured. You can check the information on this FDIC page.

Thanks goes to shrazzy for commenting on these new CD rates.
  Tags: CD rates

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Comments
4 comments.
Comment #1 by Anonymous posted on
Anonymous
I recently closed my Netbank MM account (after getting the bonus). I indicated to them in the Bank Mail message that I was okay with the $7.50 being charged, as it was a listed fee -- but they never charged it! Maybe I was lucky, or maybe there has been a change to that policy & the website just hasn't been updated yet.

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. That's nice to know. Hopefully, it is a change in policy.

1
Comment #3 by Virginia (anonymous) posted on
Virginia
I called shortly after I first opened my accounts with them and asked a CSR about the fee. She said they didn't charge a fee for account closing except for the $25 if you close within 6 months. I haven't closed my accounts with them, so I don't know whether that info was accurate, but I just mentally deducted $15 (for my two accounts) from the various bonuses I got for opening accounts for them. You still come out way ahead.

My only issues with them are that the transfer speed is slow and that you have to maintain a $500 minimum balance in the MMA to avoid fees. I have several Netbank CDs - it would be nice if that was a combined balance requirement instead of specific to funds in the MMA.

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Comment #4 by Anonymous posted on
Anonymous
I know it doesn't mention this on the web site at this time, but the policy has been that the $7.50 account closing fee only applies to accounts with a remaining balance of $7.50 or less. The idea was if the remainder was under $7.50, they would not pay out (they didn't let your balance go negative).

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