4.50% 23-Month CD at KeyDirect
Jun 16, 2008 - 9:58 AM by Ken Tumin
Update 7/26/08: The 23-month CD yield has increased to 4.75% APY.
KeyDirect is offering a 23-month CD with a yield of 4.50% APY. The minimum deposit is $5,000.
The CD disclosure is avaialable at the bottom of their Certificate of Deposit page. According to this disclosure, the 23-month CD has an early withdrawal penalty of 6 months of interest. The penalty jumps up to 9 months of interest for terms of 24 months.
The CDs may be opened online at KeyDirect for people who live in 37 states and in DC which don't have KeyBank branches (see bottom of their CD overview page). In the other states, you have to open CDs through Key Bank. KeyBank is based in Cleveland, Ohio and has been FDIC insured since 1956 (FDIC Certificate # 17534).
For those who want to stick with a financially healthy bank, KeyBank should be a reasonable choice. BauerFinancial gives them 4 stars (excellent) based on 3/31/08 data. For a term around 24-months, the next best choice is Indymac's 24-month CD special with a yield of 4.20% APY. However, Indymac doesn't come close to KeyBank in terms of financial health.
KeyDirect is offering a 23-month CD with a yield of 4.50% APY. The minimum deposit is $5,000.
The CD disclosure is avaialable at the bottom of their Certificate of Deposit page. According to this disclosure, the 23-month CD has an early withdrawal penalty of 6 months of interest. The penalty jumps up to 9 months of interest for terms of 24 months.
The CDs may be opened online at KeyDirect for people who live in 37 states and in DC which don't have KeyBank branches (see bottom of their CD overview page). In the other states, you have to open CDs through Key Bank. KeyBank is based in Cleveland, Ohio and has been FDIC insured since 1956 (FDIC Certificate # 17534).
For those who want to stick with a financially healthy bank, KeyBank should be a reasonable choice. BauerFinancial gives them 4 stars (excellent) based on 3/31/08 data. For a term around 24-months, the next best choice is Indymac's 24-month CD special with a yield of 4.20% APY. However, Indymac doesn't come close to KeyBank in terms of financial health.
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Anonymous - #1, Monday, June 16, 2008 - 10:31 AM
Key Bancorp is NOT SAFE.
That 4 star rating is old or inaccurate. Key Bancorp was involved in tons of real estate investments that went bad including several bankrupt homebuilders such as Levitt Homes.
Key Bancorp retained loads of vacant land in areas such as Port St. Lucie Florida and other places. They lost loads of dollars.
Key Corp is now a shaky penny stock on the American Stock exchange at 24 cents a share.
Public, ASX:KYC
Do your homework!!!!!!!!!!!
Anonymous - #2, Monday, June 16, 2008 - 10:40 AM
Sorry wrong Symbol:
NYSE: KEY
But still I wouldnt rate them a 4 star bank. Key Corp is trying to raise capital right now due to shortages.
However this is precisely why interest rates are high and why KeyCorp is offering a decent rate on a CD.
Anonymous - #3, Monday, June 16, 2008 - 10:59 AM
The yields available in the 14 states where Key has branches are less attractive and require higher minimums than those available via KeyDirect. If you live in one of those 14 states, KeyDirect is not available to you. In my state, the yield on a 23-month CD is 3.75% with a minimum deposit of $25,000.
Anonymous - #4, Monday, June 16, 2008 - 1:16 PM
Yeah Key hasn't been rate competitive here.
I use HSBC and Countrywide and will continue for the forseeable future.
Anonymous - #5, Monday, June 16, 2008 - 1:17 PM
With HSBC they always have rate promos every so often and an overall competitive rate, a large branch structure and the like.
So an HSBC Online Savings linked to Online Billpayment is still a great account to use.
Anonymous - #6, Monday, June 16, 2008 - 1:37 PM
To the first anonymous poster: Be polite about your comments. If you find a contradictory information or update, just post nicely. You didn't need to add "Do your homework!!!!!!!!!!!" Bank deals does a lot of good work here. He may have just missed this one detail. You gotta give him thumps up for all his efforts here.
Anonymous - #7, Monday, June 16, 2008 - 9:14 PM
THE SKY IS FALLING !!!!!!!!!
THE SKY IS FALLING !!!!!!!!!!!!
Anonymous - #8, Monday, June 16, 2008 - 9:15 PM
OOPS.......MY BAD
JUST GAS
Anonymous - #9, Monday, June 16, 2008 - 9:24 PM
KeyCorp (NYSE: KEY) announced it will raise $1.65 billion in capital through stock offerings, and it cut the dividend in half. The capital raise is intended to offset an unfavorable tax treatment ruling of $1.1 billion to $1.2 billion. And, guess what? The stock tanked.
Home foreclosures surged in May. The number of U.S. homeowners who faced foreclosure increased 48% from the same month last year and 7% just since April. The ugly numbers are fueled by the combination of slow home sales, falling prices, stricter lending standards, and a soft economy. Obviously, this is bad. But how bad? Is this merely the inevitable peak for a trend that has to happen before things get better? Or is the crisis just escalating? Nobody knows.
Anonymous - #10, Tuesday, June 17, 2008 - 12:22 AM
The stock price of many regional banks has tanked since mid-May. So it's true that ratings based on 1Q results don't reflect the most recent developments.
Take a look at Fifth Third (FITB) and Regions Financial (RF). They are all pretty much in the same boat, with the possible exception of USBank. It will be interesting to see results for 2Q ... in 1Q all these banks made huge profits from the Visa IPO that largely offset their loan losses.
Just stay under FDIC limits. The best rates nearly always come from the guys who need the deposits most.
Banking guy, if another bank takes over someone like KeyBank and chooses not to honor the terms of the CD, does the depositor usually have the option to withdraw the CD balance without penalty?
Anonymous - #11, Tuesday, June 17, 2008 - 12:38 AM
What is the best way to fund your CD?
ACH, mail check, or wired transfer?
Anonymous - #12, Tuesday, June 17, 2008 - 4:37 PM
"Banking guy, if another bank takes over someone like KeyBank and chooses not to honor the terms of the CD, does the depositor usually have the option to withdraw the CD balance without penalty?"
Anonymous, if another bank takes over KeyBank with FDIC help, even if it does not change the terms of your original CD, you have the option to withdraw early without penalty. Anytime a bank goes under, you have the option to early withdraw your CD without penalty.
You don't have this option if the bank is being purchased over normally, only if it fails and the FDIC bails them out.
Anonymous - #13, Sunday, June 22, 2008 - 9:21 PM
key bank website has much lowere rates in ny? since there are branches in ny does that mean you couldn t get the 5.50 apy which was at keydirect?
Banking Guy (anonymous) - #14, Monday, June 23, 2008 - 6:49 AM
Yes, unfortunately, you may not be able to get these KeyDirect rates if you live in New York or other states with Key Bank branches.
Anonymous - #15, Sunday, July 27, 2008 - 12:47 PM
Anyone have any thoughts on the 23 month cd versus the 48 month cd. 4.75% versus 5.25%? According to my calculations, one would need to find a cd of at least 5.7% after the 23 months, in order to break even with the rate of 5.25% Does it seem likely that in two years that will be easy to find? Banking should be all straightened out by then, and they won't be as desperate for money as they are now. I am not sure the Fed will be able to actually raise rates until the economy and stock market stabilizes more--which could be about a year to a year-and-a-half. Any thoughts about 23 months versus 4 years?
Anonymous - #16, Sunday, July 27, 2008 - 2:14 PM
Excellent question on 23 Mo @4.75 vs.48 Mo @ 5.25. I think this is the answer. It basically comes down to whether Fed will raise interest rates by 100 basis points (1%) over the next two years. For example, if Fed does two increases over the next 12 months @.25 each and then two more @.25 each in months 12-24 then two year CD rate would theoritically be 5.75 in two years time (using 4.75 two year CD as basis). Meaning, in this scenario, you would come out the same irrespective of whether you chose the 24 month or 48 month CD.
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