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5.00% 6-Month CD at Dime Bank for NY, NJ and CT

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Dime Savings Bank
Update 11/28/08: This special CD seems to have ended. It's no longer listed at the bank's website.

Dime Savings Bank is once again offering a special CD with a 5% APY and a term of 6 months. One thing that has changed since my last Dime Savings post is that this promotion is only available for residents of New York, New Jersey and Connecticut. The other promotion details are essentially the same. A checking account with specific activity is required. The minimum deposit is $500, and the maximum is $100,000.

The required checking account, Prime Dime Checking, hurts this deal. There is a $15 monthly fee if the average daily balance falls below $5,000. Also required is either monthly direct deposit of payroll, pension or government benefits or at least one online bill payment per month. The checking account has an APY of 2.00% for balances between $5K to $25K, of 2.25% for balances between $25K and $50K and 3.00% for balances between $50K to $150K.

Since you're required to keep at least $5K to avoid a monthly fee, and you'll only earn 2% APY on this $5K, you'll need to have a large balance in the CD to make up for this. For example, a $5K checking account balance earning 2% APY and a $25K CD earning 5% APY are equivalent to a $30K deposit earning 4.50% APY. For a $90K CD, the combined yield would be 4.84% APY.

Before I reported on this bank in December 2006, I was told by a banking rep that they only do a ChexSystem check with no hard credit pull during the application.

Dime Savings Bank has some solid financial ratings for soundness: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 6/30/08 data. It has been FDIC insured since 1943 (FDIC Certificate # 16012). It's based in Brooklyn, New York, and it has $3.7 billion in assets.
  Tags: Dime Savings Bank, New York, CD rates, New Jersey, Connecticut

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Comments
8 comments.
Comment #1 by Anonymous posted on
Anonymous
Are there any banks left that will match rates - IndyMac?

1
Comment #2 by Anonymous posted on
Anonymous
Footnote 1 of the promo page seems to say that the maximum deposit in this 5% CD is $100,000.

1
Comment #3 by Anonymous posted on
Anonymous
I think it is very nice of them to have potential depositors jump through hoops with all of their requirements. The days of bankers offering toasters to open an acct. at 7% will return and the bs will go away!!!!!!
There are people with money looking to invest it. WHY ALL OF THE REQUIREMENTS?

1
Comment #4 by Anonymous posted on
Anonymous
Hi Bank guy,

Can you provide the math on how you to calculate total apy between the CD and checking ?

Thanks,

1
Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
Here's the math that I used to come up with an approximate 4.50% apy for $30,000 ($5K in the checking and $25K in the CD):

(0.02*5000+0.05*25000)/30000 = 0.045

1
Comment #6 by Anonymous posted on
Anonymous
Thanks for the quick response. I did the math for a 100k CD and 5k in checking and it came out to be 5.1% apy. Is this possible?

I assume for the checking, maybe I use their on line bill paying.

Do you also know what is the penalty for early withdrawal.

Thanks again

1
Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
$100K in CD and $5K in checking would earn about 4.86%:

(0.02*5000+0.05*100000)/105000 = 0.0486

Not sure about early withdrawal penalty.

1
Comment #8 by Anonymous posted on
Anonymous
doh, an error in my math calculation. Thanks for the clarification.

1