US Bank has increased the rate on its CD specials. The new 59-month CD yield is 4.75% APY, and the 43-month CD yield is 4.25% APY. The shorter term yields are much lower: 3.50% APY for a 23-month CD and 2.80% APY for a 11-month CD. I reported on this special 59-month CD last month when the yield was 4.50%.
As I mentioned in that last post, one important detail regarding this CD is a severe early withdrawal penalty. According to the CD disclosure, the penalty for the 59 month CD would be over 29.5 months of interest on the amount withdrawn. Here's how it's described in the disclosure:
If your account has an original maturity greater than one year, the penalty will be the greater of either A or B, plus a $25 early withdrawal fee.
A. One-half of the interest that would have been earned on the funds withdrawn if held for the entire term.
B. 3% of the amount withdrawn.
Early withdrawal penalties for long term CDs are typically only 6 months of interest, so this is much worse. If inflation forces interest rates to shoot up, a small early withdrawal penalty can save you a lot of money, when you want to close the CD and move the money into an account with a higher rate.
US Bank does have an online application. However, I called their toll free number (1-800-US BANKS), and I was told you can only open the CD online if you already have a checking account with them and you use the checking account to fund the CD. Otherwise, you have to come into one of their branches. They do not accept checks by mail to fund a CD.
US Bank has branches in 26 states. Below is the list of states with the number of offices in each:
Arizona - 60 Arkansas - 47
California - 338 Colorado - 147
Georgia - 1 Idaho - 91
Illinois - 128 Indiana - 24
Iowa - 110 Kansas - 31
Kentucky - 125 Minnesota - 135
Missouri - 219 Montana - 25
Nebraska - 61 Nevada - 58
North Dakota - 25 South Dakota - 20
Tennessee - 27 Texas - 1
Utah - 45 Washington - 187
Wisconsin - 127 Wyoming - 14
The bank also has branches in Ohio.
It's a large bank with $232.8 billion in assets. It has been FDIC insured since 1934 (FDIC Certificate # 6548).
Other High Certificate of Deposit Rates
On Sunday I reported on a better long-term CD deal (higher rate and smaller early withdrawal penalty) at M&I Bank (see post). Unfortunately, it's available in fewer states. I have several other high yield long-term CDs available nationwide in my last weekly rates update. Some of the banks offering these CDs include KeyDirect, Wachovia, National City, Capital One and E-LOAN.
Update 6/14/08: Rates have increased! The new rates are: 5.25% APY 59-month, 4.75% APY 43-month, 4.00% APY 23-month and 3.50% APY 13-month.
Update 5/31/08: Rates have increased! The new rates are: 5% APY 59-month, 4.50% APY 43-month and 3.75% APY 23-month.
Update 5/24/08: The 59-month CD yield has fallen from 4.75% to 4.65% APY, and the 43-month CD yield has fallen from 4.25% to 4.10% APY.