Dedicated to Deposits: Deals, Data, and Discussion

5.15% 60-Month / 4.20% 18-Month CD at OnBank - Nationally Available


OnBank has increased the rates on is online CDs. Its long-term CDs are now very competitive with a 5.15% APY 5-year CD and a 4.20% APY 18-month CD. Terms under 18 months are not nearly as competitive. The minimum deposit is $500. Below is the full list of CD rates and terms:

OnBank CD yields as of 7/03/08:

3 Months 2.50%
6 Months 2.90%
12 Months 3.05%
18 Months 4.20%
24 Months 4.30%
36 Months 4.70%
48 Months 4.90%
60 Months 5.15%

Details about the CDs are available at OnBank's certificate of deposit disclosure (pdf) and in their FAQ page. One nice thing about OnBank is that you can fund accounts with ACH electronic funds transfers. However, it has issues that can complicate using a savings account as the funding source (due to the limited withdrawals allowed from a savings account). One major downside for some is that they do not allow beneficiaries to be included on accounts (according to the CSR). Below is a summary of the key account features:

  • Accounts cannot be funded by check. Only electronic funds tranfer by ACH is allowed
  • Electronic funds transfer by ACH is used to fund the CD. Trial deposits (and debits) are used to verify your external account.
  • No electronic funds transfer limits for CDs (per banking rep)
  • Electronic funds transfers can also be used to add or withdraw funds from an OnBank time deposit account during the grace period following the maturity date
  • up to 21 days for OnBank to receive the opening deposit after application submission to lock in rates (see disclosure for the official time period)
  • Beneficiaries cannot be included (per CSR). Joint account with rights of survivorship is an option.
  • interest is compounded and credited to the account quarterly and at maturity
  • 10 calendar-day grace period after CD maturity when you can close CD without penalties
  • money withdrawn during the grace period will not earn any interest during the grace period
  • early withdrawal penalty is 182 days of interest on the amount withdrawn for terms of one year and longer

I first reported on OnBank in this April post. They still have a very competitive no-minimum savings account. The yield has remained at around 3.50% APY since it was launched. Please refer to my April post for the account review.

OnBank is a division of M&T Bank, N.A. which is a member FDIC (FDIC Certificate # 34069). M&T Bank, N.A. is a subsidiary of M&T Bank Corporation. M&T Bank, N.A. has a 4 star rating (sound) at Bankrate based on 12/31/07 data and a 5 star rating (superior) at BauerFinancial.

Thanks to the reader who mentioned these new rates in the Finding the Best Deals post.

Update 8/05/08: I've been informed by an OnBank representative that there are no dollar limits for ACH funding of CDs. I had been told by an CSR that there was a $20K limit.

Related Pages: CD rates

Related Posts

Comment #1 by Anonymous posted on
Dear Banking Guy,
RE your comment of:
"21 days for OnBank to receive the opening deposit after application submission to lock in rates"
This is not the same info that I just received. According to CSR "justin" the rate you get is the rate of the date they receive your funds!**
He also said that you first have to open a Savings Account with them (funded via ACH) and THEN open the CD by transferring your money from your OnBank savings account.
If by that time the rate of the CD has changed unfavorably you can just *NOT* open the CD.
**Now it could be I understood it wrong here and what you mean is that they WON'T lock rates for 21 days??
Anyway maybe you could clarify?
A Loyal Fan

Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Except what I noted with CSR came from their disclosure and their FAQ (links are included above).

Here's the exact wording from their disclosure:

"We reserve the right not to open an account if we do not receive the opening deposit within 21 days of receiving the account opening application."


"The following rates and annual percentage yields will apply if the account is opened and funded within 21 days of 7/3/2008."

About the electronic funds transfer, this is the exact wording from the FAQ:

"You will make an initial deposit to your OnBank CD by scheduling an electronic funds transfer from an existing account you have with us or another institution."