Dedicated to Deposits: Deals, Data, and Discussion

4.00% 12-Month CD & 3.75% 6-Month CD at First Command Bank - Nationally Available

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First Command Bank
Update 1/20/09: The CD application is no longer available online. I was told by the banking rep that you must now either be an existing customer or go through their office or one of their financial planners to open a CD.

Update 1/19/09: The CD rates have dropped. The new CD rates for a $10K minimum are now 3.75% APY for 12 months and 3.50% APY for 6 months.

First Command Bank is offering two very competitive CD rates: 4.00% APY for 12 months and 3.75% for 6 months. Minimum deposit is $10,000. For a $1,000 minimum the APYs are 3.45% for 6 months and 3.95% for 12 months. These CDs are also available as Traditional IRAs. These rates are listed in the bank's rate table as of 1/16/09. I just called at 7:30am CST and confirmed these rates are still available. The banking rep did not know how much longer they would last.

According to the banking rep, CDs can be opened using their online application from any state. Details about the CDs are available at the bank's CD/IRA page and in the bank's depository agreement (pdf). Some important details include:
  • 10-day grace period at maturity
  • early withdrawal penalty: 30 days interest on amount withdrawn for terms less than one year, 90 days for one year or more
  • Interest accrues daily and credited quarterly for balances under $10K and monthly for balances of $10K or more
Some additional details I learned from my call this morning with the banking rep include:
  • There is a credit check for new customer accounts. The CSR didn't know if it's a hard or soft pull
  • CD rate locks when they receive the funds, not at time of application
  • CD can be funded by either a check or free wire transfer (wire would help ensure they receive funds before the rate changes)
  • At maturity, they require signed written instructions to close the CD. This can be faxed or mailed.
  • At maturity, the bank can send you the funds by check or wire transfer (outgoing wire transfer fee is $12)
When you see hot rates like these, the first thought is that the bank may be in bad shape and is desperate for deposits. But that does not seem to be the case. First Command Bank has some strong ratings for soundness: 5 stars (superior) at BauerFinancial and 4 stars (sound) at Bankrate. Both ratings are based on 9/30/08 financial data.

First Command Bank is a one-office bank located in Fort Worth, Texas. From the FDIC data, it has $544 million in assets, $459 million in deposits and 105 employees. The parent of First Command Bank is First Command Financial Services which was founded in 1958 to help members of the US military with financial planning. I found this article about the First Command Financial Services grand opening in North Carolina.

First Command Bank has been FDIC insured since 1997 (FDIC Certificate # 34415).

Thanks to Peter who mentioned these CDs in the Daily News & Deals post.

  Tags: CD rates, IRA rates, Texas, First Command Bank

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Comments
26 Comments.
Comment #1 by Anonymous posted on
Anonymous
I just filled out the application, pretty simple process. If it pans out Ken, I'll hit the tip jar for sure. Nice work.

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Comment #2 by Anonymous posted on
Anonymous
I was ready to jump on this one too. But was dicouraged by the rate lock not being guaranteed until the funds are received. Rates can drop overnight. Then a person would be stuck with a lower than anticipated interest rate. Sometimes even electronic funds transfers are delayed. It would be better if at least the bank would say how long their present rates would be good for or allow for a grace period of a few days to fund the CD after they receive the online application.

1
Comment #3 by Anonymous posted on
Anonymous
The problem with the unavailability of the rate lock, as mentioned by Anonymous at 8:13 am, is the same problem I had with GMAC Bank's CDs.

1
Comment #4 by Anonymous posted on
Anonymous
If you are that concerned, do a wire transfer. Some banks (WaMu) don't even charge to send them, but if your bank does charge, the $10-$20 fee would be well worth it.

1
Comment #5 by Anonymous posted on
Anonymous
I am a little concerned about the rate lock as well, but took my chances. A couple things to note: 1. the CD application is under the checking/savings link; and 2. during the application where you are picking your CD, if you click on "check current rates" (or something like that) the rates for 2/19/2008 come up. I called a CSR and he confirmed that those rates are incorrect and he confirmed the one year rate to be 4% APY.

1
Comment #6 by Anonymous posted on
Anonymous
Opened a CD toady, 1 year 4%, called to confirm that I got 4% and they said yes.

1
Comment #7 by Anonymous posted on
Anonymous
12:45 I am simpatico with your situation in every respect as re the toady CD. I also have opened those in the past, as well as CDs that were a little squirrelly.

Stock investors may have their cats and dogs. But darn it, us savers have our toads and squirrels.

1
Comment #8 by Anonymous posted on
Anonymous
You should first determine if this company is where you want to put your money - http://www.sec.gov/news/press/2004-170.htm

"Washington, D.C., Dec. 15, 2004 -- The Securities and Exchange Commission today announced the institution of settled enforcement proceedings against First Command Financial Planning, Inc. (First Command), a registered broker-dealer whose customer base consists almost entirely of active-duty and retired U.S. Military personnel. The SEC alleges that First Command used misleading sales materials to offer and sell mutual-fund investments through an installment method called a systematic investment plan (systematic plan). The NASD today also initiated settled disciplinary proceedings against First Command based on similar allegations relating to the firm’s sales of systematic plans. In settlement of these actions, First Command has agreed to pay $12 million to be used to reimburse certain customers and to fund investor education programs for members of the U.S. Military and their families."

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Comment #9 by Anonymous posted on
Anonymous
Two things to consider about that last post. 1) That issue was resolved over 4 years ago. 2) The bank is not the investment arm of the company, it's the bank.

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Comment #10 by D (anonymous) posted on
D
Guess what? The rate just dropped to 3.75% today (Monday, Jan. 19th). I sure am glad I didn't grab their bait!

1
Comment #11 by Anonymous posted on
Anonymous
Just spoke to a supervisor. She said they have been innundated with applicaitons. She said they would be sending email out to applicants within the next 48 hours indicating whether their application was approved. She told me if I applied on Friday I probably would get the Friday rate. CSR told me that the bank president decided not to take CD applications from non-members as of Friday. I pointed out this was not posted on their web site Friday and she told me that it is posted now.

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Comment #12 by Anonymous posted on
Anonymous
i open the cd on 1/17/09, good for me since the rate just dropped, they dont take non-bank customer apps, i called them they said my app will be declined.
guess i will have to go to clearsky

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Comment #13 by Anonymous posted on
Anonymous
Got this email from them today:
-----------------------------
Thank you for your application for a deposit account with First Command Bank. After careful consideration, we regret to inform you that we are not able to approve your request at this time.



We are currently accepting applications only from existing First Command clients and individuals who apply in person. We invite you to apply for a deposit account at our branch location or visit a First Command Financial Advisor to apply (see www.firstcommand.com for locations near you).



We apologize that our online deposit account application did not make this clear, and we welcome the opportunity to serve you. If you have any questions, please contact us at 888-763-7600 or fcbcustcare@firstcommandbank.com.



Sincerely,



First Command Bank





Donna Sheckels | Sr Data Management Rep |

First Command Bank | 888.763.6000 x 2692

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Comment #14 by djc314 (anonymous) posted on
djc314
I got same email/letter. Really mad as there was nothing on their site that said it they woulud only accept from existing First Command clients and individuals who apply in person.

But probably would have been put into lower rated cd anyone so Im mad but...

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Comment #15 by Anonymous posted on
Anonymous
I jumped on this thing first thing on the 16th, and got the same email just now. My ACH transfer had already gone through as well. I called Donna (accounts person) - apparently they had an "executive meeting" in which they decided not to honor the rate. Total bullsh*t. Somebody ****ed up and now they are covering their butts. Hell of a way to run a business. She said I should get my money back tomorrow. We'll see. At least I have a paper trail.

1
Comment #16 by Anonymous posted on
Anonymous
I just got the message as well. They took my money yesterday though. Bet they don't credit me any interest on that.

1
Comment #17 by Anonymous posted on
Anonymous
First Command managed to withdraw my funds on the 20th, before emailing me on the 21st that I couldn't open an account. They said I might have my money back tomorrow. On the 16th they said the account wuld be opened without problem. I have never heard of taking money, then returning it. What a business!

1
Comment #18 by Anonymous posted on
Anonymous
I had the same thing happen with my money. "You are denied, but we are going to take your $$ for a few days anyway." Do you know if they send your money back via ACH, free wire, or check? Getting it by check would just be kicking us while we are down.

I find what they did shady at best. Anyone know who to file a complaint with? I feel that going back on their word after the fact is not truthful in their advertising. At the very least there should be some sort of public record that makes people aware of their practices.

Seems like the banking managers learned their tricks from the invesment arm managers.

1
Comment #19 by Anonymous posted on
Anonymous
Same here, I opened a CD, called to verify over the phone that I was locked in at the 4% rate. They told me yes that I was. They took out my money. And then they send me the email saying that they were in the process of updating their website. What total bull! Oh and like you guys still haven't gotten my money back.

1
Comment #20 by Anonymous posted on
Anonymous
Crazy enough, First Command called me today and told me my account application had been accepted, after I received the rejection e-mail yesterday. I applied on the 16th and got the advertised rate. Good thing too, they had already taken my money.

1
Comment #21 by Anonymous posted on
Anonymous
Same here, they rejected me, then decided to accept me. It appears that they have decided to accept all the people who applied before the warning was issued to their website. For me they already took my money, and they told me they will back date my interest from the 16th at 4%, hooray!

1
Comment #22 by Anonymous posted on
Anonymous
I was in, then out, and am now back in as well. Robin called and was very nice - so all is well in the end. Pretty cool. Kudos to them.

1
Comment #23 by Anonymous posted on
Anonymous
you guys are a bunch of whiners. you probably overloaded them which caused them to change their policy regarding new applications.

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Comment #24 by Anonymous posted on
Anonymous
keep in mind, usaa and nfcu and all the other "military banks" have a policy that you must be in the military to have an account. it appears first command may have gone that route

1
Comment #25 by Anonymous posted on
Anonymous
"whiners"?

Apparently we got them to change it back again. What, you miss out Mr. Grumpy?

1
Comment #26 by Anonymous posted on
Anonymous
major props to First Command! i got my rate afterall and am happy. i could see why they would change their policy on the fly- because of the vultures that surf this site!

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