Dedicated to Deposits: Deals, Data, and Discussion

5.65% 12-Month / 5.65% 60-Month CD at Mutual Bank in Houston (Nationally Available)

POSTED ON BY

Mutual Bank
Update 9/20/07: This CD special is no longer available.

Mutual Bank's new Houston branch continues to offer a grand opening special certificate yield of 5.65% APY for terms of 12, 24, 36, 48 and 60 months. The minimum deposit is $5,000, and there is no maximum deposit.

I had first reported on this special last month. A reader just mentioned in an email that the special is still going on, and they're still allowing people from any state to open these CDs. You have to make sure to mail the application to the new Houston branch. This is not advertised at Mutual Bank's website.

These special rates are expected to last through September, but they could change at any time. So please check with Mutual Bank before sending in the application. The application is available on their website here. A reader in my previous post commented that he was instructed to send the aplication, W-9 form, 2 forms of ID, and a Letter of Direction to the Houston branch. Once the CD is established, you should be able to get online access.

Mutual Bank has been FDIC insured since 1962 (FDIC Certificate # 18659). Their safe-and-sound star rating at Bankrate.com has fallen again since my February report. It's now 2 out of 5 stars (below peer group) based on 3/31/07 financial data. Last year it had been 4 stars. In February it had fallen to 3 stars.

Thanks to the reader who emailed me about this special and the readers who gave additional details in the comments.
  Tags: Mutual Bank, CD rates, Texas

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Comments
8 comments.
Comment #1 by Anonymous posted on
Anonymous
The terms of this certificate state that you cannot withdraw principal without their consent. If they do consent, then you pay a 3 month prepayment penalty. I opted not to buy the certificate because I do not want to be at their mercy if I need the money.

1
Comment #2 by Anonymous posted on
Anonymous
In the above comment I meant to say any withdrawal of principal prior to maturity. Needing the bank's approval is highly unusual.

1
Comment #3 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info. I'm afraid other banks make similar stipulations in their disclosures. For example, here's what E-LOAN has in its disclosure:

Normally, withdrawals will not be permitted during the first ninety (90) days the Account is open. After that, they may be permitted at our discretion. We will impose an interest penalty on early withdrawals of principal before the end of your Account term.

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Comment #4 by mh (anonymous) posted on
mh
Not unusual at all.

All the CDs I've ever opened state in their T&C's that early withdrawal of all or part of the funds is at the sole discretion of the bank. The only exception is the death of the owner, or one of the owners, of the CD. In that case, the CD can be closed immediately, and without penalty.

A CD is a contractual agreement by the customer to keep the funds on deposit at the bank for the stated term.

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Comment #5 by Anonymous posted on
Anonymous
mh, I don't think that's true. All the cd's I own let you withdraw the money as long as you pay the penalty. I have only seen a few banks or credit unions impose this condition. I won't buy these cd's if their terms are a few years or more. I always read the truth in savings disclosure because rarely do I ever find anyone at these banks who know the terms and conditions of their cd's. I am surprised how many people buy cd's without reading these disclosures. The amount of the penalty and more importantly how it is imposed varies considerably.

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Comment #6 by mh (anonymous) posted on
mh
No, I didn’t say the bank would actually not honor the early withdrawal request by a customer. They make the statements in the T&C’s to protect their rights. Of course they anticipate that customers may want/need to withdraw before the CD’s maturity. That’s why there’s a penalty scale.

It’s somewhat similar to banks’ reserving the right to require seven days written notice for withdrawals from all savings and interest bearing checking accounts. It’s highly unlikely they would actually require such notice for the average depositor.

Please quote your bank’s T&C that “lets” you close without their also agreeing to it.

1
Comment #7 by Anonymous posted on
Anonymous
Called today, this promo is no longer available.

1
Comment #8 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the update. Sorry to see it end, but I guess it's understandable after the Fed funds rate cut.

1