VirtualBank just increased the rate on its 12-month CD from 5.39% to 5.55% APY. The 5.55% APY is now the best yield for a one-year CD that's available nationally. The 6-month CD rate also increased by 5 basis points to 5.44% APY.
VirtualBank CDs have the following features:
- $10,000 minimum to open
- Compounded daily and credited monthly
- Joint and Trust accounts can be selected
- A beneficiary can be included
- Can be reinvested or deposited into a VirtualBank eMoney Market Account
- Early withdrawal penalty equals: 1 month interest for 3 month term, 3 months interest for 6 and 9 month term, and 6 months interest for one year or longer terms. Penalties applied whether interest has been earned or not.
Last year I opened a VirtualBank CD. I already had their eMoney Market account. So I first transfered the money into this account and used this to fund the CD. You can also fund the CD by check or wire transfer. I was able to open the CD online, but there were a few complications. Hopefully they've improved things in the last year. The first complication is that it required not only my eMoney Market account number, but also my Client ID. This is easier to find now. Click on the "My Accounts" tab for your eMoney Market account. The Client ID is now listed on the left middle of the page. The second complication was that they require you to mail back to them a signature card. This can be done by printing out the card at the end of the application or by waiting for them to send you the signature card with the other CD documentation along with a postage-paid envelope. The CD took effect the next day after I applied online, so there's no rush in sending the signature card.
To manage the CDs, you can use VirtualBank's secure message email system that's available when you are logged in. Before the CD was about to mature, I sent them instructions to close the CD and transfer the money into my eMoney Market Account. This was done with no problems. I received the reply from them on the next day. Note, it's always a good idea to follow up with any bank during the grace period, to make sure the CD is closed as instructed. I believe the grace period at VirtualBank is 14 calendar days.
Once the money is transfered to the eMoney Market Account, it's easy to initiate transfers to your external linked accounts. The eMoney Market Account only has a yield of 4.60% APY for balances under $50K (4.86% APY $50K to $100K and 5.13% APY for over $100K). Even though the yield isn't the best, it does have several nice features, and as I've mentioned, it makes purchasing and closing CDs very convenient. For more info on the money market account, please see this post.
Another thing I like about VirtualBank is the login security. In addition to the password, you have to key in a PIN into a virtual keyboard. Some may think this extra step is a hassle. I haven't had any trouble with it, and it should make it harder on spyware from being used by criminals to access your account.
VirtualBank is a division of Lydian Private Bank which is FDIC insured (FDIC Certificate # 35356).The bank currently has a 3 out of 5 star rating (performing) at Bankrate.com based on data from March 31, 2007.