Dedicated to Deposits: Deals, Data, and Discussion

5.25% 29-Month CD with Key Advantage Checking at KeyDirect


KeyDirect has ended its 4.75% APY 23-month CD, but they have come out with a new 29-month CD with a yield of 5.00% APY. As I first mentioned in this August post, you can receive an extra 25 basis points on the CD rates if you have or open a Key Advantage Checking Account. So with this checking, the 29-month CD yield is 5.25% APY.

The minimum deposit for the CD is $5,000, but to avoid a $15 monthly fee on the Key Advantage Checking, a combined balance of $10,000 is required. The combined balance includes checking, savings and CD balances. A few other ways to avoid a monthly fee are described in the disclosure.

For more details about opening and closing a KeyDirect CD, please refer to my August post. One thing to note about this 29-month term is that the early withdrawal penalty is equal to 9 months of interest which is higher than the 6-month penalty for the 23-month term.

Accounts at KeyDirect may be opened by 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 (which may have lower rates).

KeyBank is based in Cleveland, Ohio and has been FDIC insured since 1956 (FDIC Certificate # 17534).

Key Corp, the parent of Key Bank, has been hurt in this credit crisis, and this is starting to be reflected in Key Bank's financial ratings based on 6/30/08 data. gives the bank a 2-star rating (below peer group) and BauerFinancial gives it a 3.5-star rating (good).

Thanks to the reader who mentioned this new CD in the comments.

  Tags: KeyDirect, CD rates, IRA rates

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Comment #1 by Anonymous posted on
Be careful opening an account here. Multiple mistakes were made opening mine a couple of months ago and the customer service is very poor.
It took forever and ever to get them to put the correct rate on the CD's (with 1/4 percent higher due to opening the Key Advantage Account). If I hadn't phoned them numerous times to 'remind them' they probably would never have even done it. Their snail mail is slower than molasses; to this day I am still waiting for a corrected CD statement on one of my accounts.

Comment #2 by Anonymous posted on
Got 23 month done last week at the 5% APY. Feel like I did OK. Not certain I would be as comfortable with another 6 months tacked on. Heck, 23 months is a long time in this financial environment. Also agree with Banking Guy on seeking lower penalty whenever possible. So the 29 carries sort of a double whammy when compared with the old 23.

Comment #3 by mcrmgf (anonymous) posted on
terrible rates at ny branch

Comment #4 by Anonymous posted on
I had a bad experience before with KeyDirect, even though I wanted to open a CD with them because, at the time, they had a very attractive rate...

Talked to them on the phone at all the info...and found out they would not accept funding of the account via ACH transfer...especially if you didn't already have a checking or savings with them.

So, they insisted that I paper mail the check to them.... But they wouldn't lock the rate until they actually received the check. And by the time we sorted everything out, on the day I was going to mail the check much to my dismay, they substantially cut their rates. So I bailed out.

I don't know the reason why they can't have a system in place to fund new CDs thru ACH transfer from one of your other bank accounts. It's a very common practice among other institutions...and much quicker than snail mailing.

Comment #5 by Anonymous posted on
I agree with the first poster, I've had exactly the same experience.

I got updated paperwork today for a CD I opened 6 weeks ago. It says my interest rate is 48.000% ... unfortunately, the APY is correct at 5.01%. They obviously have some serious administrative challenges.

Today I think I finally got a CSR who actually was competent. I've gotten lots of just plain wrong information from their CSR's.