Dedicated to Deposits: Deals, Data, and Discussion

Countrywide Bank's Savings Account and CD Rate Changes - Long Term CD Yields up to 4.50%

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Countrywide Bank lowered the rates slightly on its online savings account and 12-month CD. The new yield for balances over $10,000 is now 4.00% APY (was 4.05% APY). The 12-month CD yield dropped from 4.20% APY to 4.10% APY.

On the positive side, there were some nice increases on the long term rates. The 24-month CD yield is now 4.25% APY, and the 36-month CD yield is 4.50% APY. Previously, all of the long term CD yields were only 3.00% APY. Below is the full list of old and new Internet CD yields:

CD TERM OLD APY NEW APY CHANGE
3 Month 3.25% 3.25% 0.00
6 Month 3.25% 3.25% 0.00
9 Month 3.25% 3.25% 0.00
12 Month 4.20% 4.10% -0.10
18 Month 3.00% 4.10% +1.10
24 Month 3.00% 4.25% +1.25
30 Month 3.00% 4.25% +1.25
36 Month 3.00% 4.50% +1.50
48 Month 3.00% 4.50% +1.50
60 Month 3.00% 4.50% +1.50
84 Month 3.00% 3.00% 0.00

Note, some local Countrywide CD rates are 5 basis points higher than above. You can check on this by submitting your zip code on top of the rate table. I've tried a few zip codes, and only a California zip code shows the extra 5 basis points.

Countrywide CD Details and the Advantage of Having a Savingslink Account

Details of Countrywide CDs are listed in their account disclosure (pdf) starting on page 17. In February Countrywide ended the feature that allowed you to make additional deposits to a CD during the first 30 days. They still give you a period of 10 days to fund the CD after you apply online when you'll be guaranteed the CD rate at the time of the application. A few readers have commented that they didn't receive the rate at the application time when they sent in the check with the documentation they received in the mail from Countrywide. It appears that you should send in the check without waiting for the CD documentation from Countrywide if you want to ensure the check is received before 10 days.

The easiest way to close a CD at maturity is to also have a Countrywide savingslink account. A few readers have commented that they were able to have Countrywide transfer the CD funds into their savingslink account very easily. Once in the savingslink account, you can initiate a fast ACH transfer to any of your accounts at other banks. The savingslink account has a minimum opening deposit of $1,000, but it has no balance requirements or monthly service charges after it's opened.

Other CD details include:
  • 91 days of interest early withdrawal penalty for terms under 12 months.
  • 180 days of interest early withdrawal penalty for terms of 12 to 60 months.
  • Grace period at maturity when you can close without penalty is 10 calendar days
  • No hard credit inquiries for opening CDs or savings accounts
  • CD funding options: mail a check, wire transfer, or drop off check at a CW financial center. ACH funding for a CD is not an option. There's now an ACH funding option. For those with a Savingslink account, you can use the same Savingslink links to transfer money to fund the CD.

Latest News on Countrywide

Bank of America's planned purchase of Countrywide is still on track. The latest news indicate that Countrywide shareholders may get less on the deal as credit deterioration continues at Countrywide. First Quarter results are scheduled to be released on April 29th. According to this article new allegations have been added to a class action suit pending against Countrywide. There had been worries that the combination of worsening credit problems and lawsuits could derail the buy-out.

Since no one knows for sure how this will turn out, it's best to play safe and keep your deposits at Countrywide under the FDIC limits. Note, there are many ways to extend your FDIC coverage over $100K. However, you have to be careful, especially if you use POD's. Please see this post for more info.

To review Countrywide Bank's FDIC information, please see their FDIC page.

Thanks to the reader who mentioned these new rates in the finding-the-best-deals post.

Edited 4/20/08: Updated ACH info for funding a CD based on readers' comments.

  Tags: CD rates, IRA rates, savings account

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Comments
19 Comments.
Comment #1 by Anonymous posted on
Anonymous
No hard pulls for opening Countrywide accounts but they do a ChexSystems inquiry each and every time you open an account. For example, opening Savingslink and 4 CDs means 5 ChexSystems inquiries.

1
Comment #2 by Anonymous posted on
Anonymous
Google 20% return in a day. Countrywide rates not so good. The days of keeping in Money market are over. Been moving cash to the markets since we are now out of the dippage again.

1
Comment #3 by Anonymous posted on
Anonymous
Quote: "Google 20% return in a day. Countrywide rates not so good. The days of keeping in Money market are over. Been moving cash to the markets since we are now out of the dippage again.

By Anonymous, at 10:05 AM, April 18, 2008"

Well good for you, but I visit this site for tips on CDs and MM Accts., not stock trading advice.

Many thanks to Banking Guy.

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Comment #4 by Marcus (anonymous) posted on
Marcus
I disagree.

I think we welcome any and all money advice, even if it involves a legitimate stock tip.

People want to read about others who might come up with successful alternatives to the low bank rates.

It's not as if he is trying to sell us something or make us have to contact him via email, the way some others have.

And he or she is not posting a ton of posts about this, like some others have on that TDAmeritrade thing, as one example.

Freedom of speech.

And, you have the right to not read the posting, just as much as he or she has the right to post it.

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Comment #5 by Anonymous posted on
Anonymous
A note on the ACH issue for CDs. If you have a SavingsLink account, you can use the external accounts you have linked to the SavingsLink account to perform a very easy, efficient ACH funding for a CD. I have done it twice, and I enjoy the peace of mind of knowing the rate is locked in. You'll still get a signature card to mail back, but a postage paid envelope is provided. Just another good reason to open a SavingsLink account if you like their CDs.

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Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the info on the ACH for the CDs. When you have a savingslink account, can you specify the ACH funding in the CD application? Or does it require something special in the application?

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Comment #7 by Anonymous posted on
Anonymous
What's to prevent GOOG from dropping 20% again? Odd how so many seem to think the selloff is over. Citigroup is firing 9000 people and writing down another $12 billion. Yeah, go buy stocks. Bad news is now good news...until reality sets in again and we hit new lows. Lol.

As for Countrywide, I had the sense to put $500k in their 6 month CD at a 4.84% rate or some such at the beginning of the year. Anyone think they will give me that rate again if I renew for another 6 month once it expires since its a decent size chunk of change?

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Comment #8 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
Not only will you not get 4.84%, you will not even get 4% very shortly.

Oil closed at $117 a barrel today.

It is guaranteed the Fed will cut the Fed Funds Rate again at the end of this month. Countrywide will lower their rates yet again, as will everyone else.

At this rate, it might soon be a miracle if any bank can offer over 3%.

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Comment #9 by Anonymous posted on
Anonymous
Countrywide is a great bank to do business with and I will hate to see them go. I still don't think the deal with BAC will go thru as currently structured. If it does I will move on as I am not a lover of BAC. I have stated on here before that everyone who has much in the way of assets should own some stocks and I have been buying some as my CD'S mature since CD rates are so low. However, the poster bragging about google doesn't tell you that even with that 20% rise it is still trading $200.00 below its 52 week high. I am also buying muni bonds that are AAA rated and insured and they pay over 5% tax free. Every investor should do what's best for himself. Anyway, I don't think countrywide as we know it now will be around much longer. Best wishes for success wherever you put your money.

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Comment #10 by Sofa King Everything...Too (anonymous) posted on
Sofa King Everything...Too
The problem with GOOG is that you need $539,000 to buy 1,000 shares.

Yikes!

Oh, to have that much money.

You are correct that B of A never offers great interest rates. If the B of A and CW deal is finalized, B of A will get those CW rates down to B of A levels.

I think the B of A -- CW deal will go through, as B of A is picking up CW at a great price for B of A. If threats of expensive lawsuits persists, maybe you will be right that the deal will fall apart.

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Comment #11 by Anonymous posted on
Anonymous
It's been about a year since I last deemed a CD, but countrywide had changed from allowing closure over the phone to requiring you to mail or fax instructions for closure.
form

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Comment #12 by Anonymous posted on
Anonymous
I would be interested in knowing what AAA muni bonds are paying 5% tax free so I can look into them. I'm assuming that is state tax free only?

My buddy tells me there are high quality corporate bonds that are yielding upwards of 9% but you have to keep a look out for them and they are far and few between. Anyone know a resource where I can keep tabs online for these types of bond options?

Stocks are crazy overbought right now. IF anyone is thinking about buying you should wait until after the summer IMO since the market is without a doubt coming in again. "Sell in May and Stay Away" is a common Wall Street adage for a reason especially during a bear market. Just saying.

1
Comment #13 by Anonymous posted on
Anonymous
When I opened up a CD recently, the online application allowed me to fund it via ACH without first having any other Countrywide accounts.

1
Comment #14 by Anonymous posted on
Anonymous
Was NOT suggesting to buy GOOG FYI.

Never take stock tips from forums. The point was in my own life I think the market is now undervalued and its time to move from savings/mma to the market which I have been doing.

Countrywide at 4% still a good bank to use if you want to pocket in cash.

1
Comment #15 by Anonymous posted on
Anonymous
Muni bonds are federal income tax free. Some are state income tax free depending on on the bond you buy and the state you live in. If you have a brokerage account any where they can help you with muni bonds. Go to yahoo or google and type in muni bonds and you will get all kinds of information. I use schwab and they currently have 8 different bonds in their inventory paying over 5%. These bonds are AAA rated and probally insured altho I didn't look them up seperately for the insurance. When I say insured that is not FDIC. Anyone getting in muni bonds for the first time should use a broker so they know what they are doing. For anyone looking for income investments that are NOT FDIC insured I suggest you look at quantumonline.com . It is a site that has information on preferred stocks,reits, closed end funds, etf's and royalty trusts. It is free but I think you have to register to use it. Happy rate hunting to all.

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Comment #16 by Bob in Stockton (anonymous) posted on
Bob in Stockton
Dear Banking Guy:

RE: Banking Guy said...
Thanks for the info on the ACH for the CDs. When you have a savingslink account, can you specify the ACH funding in the CD application? Or does it require something special in the application?

I can't say for sure about specifying SavingsLink funding on the CD application, but I recently opened a CWB CD that I initially thought that I'd send them a check. Later changed my mind and called CWB and they initiated the funding from my Savings Link. I think I'll open any future CWB CD's over the phone from my SavingsLink as it worked great.

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Comment #17 by Anonymous posted on
Anonymous
Been using my Trifecta of Banking now for awhile.

Countrywide linked to HSBC. Sovereign is good if you want to stick with one bank and want full in branch service.

Smartypig better only if you commit to a goal and gift cards.

Countrywide is more flexible banking system.

Locking in long term cd's now is nuts as rates will likely climb. The only disappointment is the 12 mth rate which dropped to 4.10% from 4.20% which could have been a feasible product.

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Comment #18 by Anonymous posted on
Anonymous
Dear Banking Guy,

I posted the info on the ACH CD funding associated with SavingsLink. You asked a follow up question. I had an existing SavingsLink account, which I had already linked to OneUnited. I wanted the funds for the new CD to come from the OU account. As I filled out the application and got to the section on funding, use of external linked accounts was an option, and, since I had more than one bank linked to SavingsLink, I had to click on OneUnited to select it. Nothing else to it. A record of the transfer to CD appears in the same section as transfers to SavingsLink, but it shows the CD account as the destination. You get an email showing that the transfer was initiated, too, just as you do with a transfer to SavingsLink.

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Comment #19 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for following up. I've updated the post with your info.

Having the savingslink, CD and moneymarket (if you want checks) looks like an excellent package. I hope BOA doesn't change things, but I would be surprised if rates do remain this competitive after the buyout.

1