Bank of Internet USA has recently increased the rates on some of its certificates of deposit. The largest increase was on the 60-month term which now has a yield of 4.20% APY. Some details on these CDs from the CD page and from their disclosure page include:
- $1,000 minimum to open
- $100,000 maximum deposit
- Compounds daily
- Paid monthly into account, by check or wire to your checking account
- Interest rate is based on the day BofI receives the application. This rate is reserved for 10 calendar days to allow time for your deposit to be received by BofI
- Trust, Non-Profit Corp. and UTMA accounts can be opened
- No IRA accounts available
- Early withdrawal penalty is 6 months of interest for terms 2 years and longer
- Grace period is 10 days
- Forfeit interest earned during grace period if you close the CD
If you decide to open a BofI CD, please consider using this affiliate link. It'll take you to a BofI sign-up page like the above links, but I'll get a little credit for it.
BofI is still holding on to some high rates on its checking and money market accounts. Please see my review of these accounts for more information.
Bank of Internet USA is a member FDIC (Certificate # 35546). It has a rating of 3 out of 5 stars (performing) by Bankrate.com based on 9/30/07 data. BauerFinancial gives BofI a 5 out of 5 star rating (superior) based on 12/31/07 data.
Other Long Term CD Deals
It's not easy to find rates much higher than this from banks for a 60-month term. Other banks offering a little better rate include KeyDirect's 4.50% APY (not all states), WaMu's 4.25% APY (online only) and iGObanking.com's 4.30% APY. You still can get the best long term CD rates at credit unions (see my latest weekly CD list).
With long term CDs there's always a question about the wisdom of locking in rates for such a long term. Of course it would have been better to have locked them in last year when rates were higher. If inflation continues to worsen, there's a chance that rates will rise in the next year. On the other hand, a recession could have the effect it did in 2001 in which rates remained low for several years. One important thing to remember is that with a CD you have the option of early closure with an early withdrawal penalty. The 6-month penalty seems to be the average penalty for terms over one year, but this can often be a year or more of interest at other banks.