Capital One Bank is offering some very competitive CD rates at its branches that are higher than its Direct Banking CD rates. These branch CD rates include 5.25% APY for 60 months, 4.50% APY for 24 months and 4.00% APY for 12 months. These rates are higher than the rates for similar CDs at Capital One Direct Banking and Capital One / Costco Direct Banking. However, Capital Direct Banking has the best deal for a 7-year CD with a yield of 5.50% APY (5.55% APY at the Costco version).
Branches also offer Flex CDs which allow rate bumps during the CD term if rates go up. The 5-year Flex CD has a competitive 5.00% APY, and this allows 2 rate bumps. It's questionable if this feature is worth the lower rate. Even if there's a rising-rate environment, it doesn't mean that the rate will go up for the specific CD that you have. So you may never get a chance for a rate bump.
There's an online application for these CDs, but it states that "you will be required to visit a branch office in Texas, Louisiana or our headquarters branch in McLean, Virginia to complete the process." However, I've seen these same CD rates advertised in today's New York Daily News. The ad is available online here (update: the ad is no longer available online). The small print of the ad states that this offer is available in New York, New Jersey and Connecticut. Refer to the Capital One branch locator to see if there's a Capital One branch near where you live.
One thing a little odd about Capital One CDs is the early withdrawal penalty. It's not a simple 6-month interest penalty. However, the penalty of the branch CDs appear to be different than the Direct Banking CDs. According to the terms of the branch CDs, the early withdrawal penalty for CD terms over 12 months to 60 months is $25 plus 3% of the withdrawal amount. The 3% would equal about 7 months of interest for a 5.25% APY. This is more straight forward than the Direct Banking CD penalties which factor in the Economic Replacement Value to determine the penalty of long-term CDs (see post).
FDIC and Financial Info
Capital One has two FDIC entities, however, I've been told that new accounts will be FDIC insured through Capital One, N.A. (FDIC Certificate # 4297). It's a large bank with $108.5 billion in assets and $72.5 billion in deposits based on 6/30/08 data. Capital One's rating at Bankrate is 3 stars (performing) based on 6/30/08 data. The rating at BauerFinancial continues to be 3.5 stars (good) based on 6/30/08 data.
Edit: Corrected CD term for 4.50% APY.