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.