10% 6-Month CD ($2.5K Max) and Other Promos and News at Flagstar Bank

Flagstar Bank is offering a new 6-month CD promotion with a yield of 10.00% APY. The minimum deposit is $500, and the maximum deposit is $2,500. It does require you to jump through some hoops. A new checking account is required, and you must have at least 15 transactions (can include online bill payments, debits and credits). Instead of the 15 transactions, it appears you can also satisfy the CD requirement with $250 direct deposit of income per month. A $100 penalty may be imposed if the checking is closed before 6 months or if you fail to meet the transaction requirements.

This special is not listed at Flagstar's website. It was advertised in yesterday's Fort Wayne News Sentinel. The ad is available online here.

Other Flagstar Promotions

This CD special is more like a checking account bonus. If you have $2,500, the 10% will earn you about $87 more than a 3% account for 6 months. You may be better off with Flagstar's $100 gas card checking account bonus which still seems to be available (see post). I don't know if they would allow you to do both, but it may be worth a try.

The gas card promotion is only available in the three states where Flagstar has branches (Georgia, Michigan and Indiana). I would guess this CD promotion has the same limitation.

Matching CD Rates

Readers have informed me that Flagstar will beat any CD rate by 0.05% from a bank within the same county. Another reader reported that Flagstar in Georgia applies this to the entire state. So you can see if you can use this to get a 4% CD (see post).

Flagstar's Express Money Market Account

Flagstar continues to have one of the best online money market accounts, and it's available to people in any state (see post).

Financial Health

Flagstar has been hit hard by the mortgage crisis. It has only a 1 out of 5 star rating at Bankrate.com based on 12/31/07 data. Flagstar Bancorp reported last week a loss for the first quarter, but it's showing some improvements (see article). As with any bank, always keep below the FDIC limits (Flagstar FDIC Certificate # 32541).

Tags: Indiana, Flagstar Bank, Georgia, Michigan, CD rates