Dedicated to Deposits: Deals, Data, and Discussion

2.71% 18-Month CD at State Farm Bank - Nationally Available

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State Farm Bank
Update 5/20/09: The 18-month CD rate has fallen. Please check the bank's website for the latest rates.

State Farm Bank continues to offer a fairly compeititive mid-term CD special. The rate is 2.71% APY for an 18-month term. There's also a fairly competitive 1-year CD with a 2.54% APY. Minimum deposit is $500. The rates are listed at State Farm Bank's rate table as of 4/28/09.

My last post on State Farm Bank was March 11 when they were offering a special 2.77% 21-month CD.

State Farm Bank's CD Page has the details and the link to the Truth in Savings Disclosure. According to the disclosure, the early withdrawal penalty is 180 days of interest on the principal withdrawn.

State Farm Bank also continues to have a competitive rate on its Interest Checking Account. As of 4/28/09, the rate is 1.55% APY on balances of at least $2,500 (0% for smaller balances). This is the same that it was in March. Minimum opening deposit is $100, and there's a $10 monthly fee for average daily balances under $500. This checking account may not seem too competitive, but it's not bad if you compare it to 0.75% at Charles Schwab or 0.25% at ING Direct.

Update 4/29/09: The online application cannot be used to apply for the 18-month CD (or any CDs with special terms). You can apply by phone for that case.

You can apply online, but a printer is required, as you will be required to print, sign and mail the application to State Farm along with your initial deposit. You may also apply for an account by contacting State Farm Bank toll-free at 1-877-SF4-BANK (1-877-734-2265) or by contacting a participating State Farm agent.

A reader commented in my last post that there have been reports that State Farm Bank does a high number of hard credit inquiries when opening accounts. The hard credit inquiry can temporarily ding your credit score. If you've experienced this from State Farm Bank, please leave a comment.

State Farm Bank's ratings for safety and soundness have fallen a little since my last post. It now has 3 stars (adequate) at BauerFinancial and 2 stars (below peer group) at Bankrate.com. Both ratings are based on 12/31/08 financial data. State Farm Bank has been FDIC insured since 1999 (FDIC Certificate # 34617).

Other Top Certificate of Deposit Rates

For top CD rates nationally available, refer to my weekly rate summary. Many of the best CD deals are only locally available. To find the best deals in your state, refer to the index of state CD and bank deals.

  Tags: State Farm Bank, CD rates, checking account

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Comments
5 Comments.
Comment #1 by Anonymous posted on
Anonymous
I've had a number of CDs with S.Farm for more than 5years. Btw, the 2.71 APY/18 mo is ONLY avaiable if you phone and apply by phone (not online!) It is noted on the webpage. All other rates/terms can be applied/funded online as always. It's strange. As an aside, a good feature (depends on your needs) is that there is no need to fund the (2.71) cd until you 1) receive the paperwork they mail and 2/ you have 30 days in total. Interest starts when the funds are received. The rate IS locked...but if the rate goes UP (not likely) by the time you do fund, you can phone a CSR and they will bump the rate UP. You will get a mailed statement EVERY month!

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the information.

1
Comment #3 by Anonymous posted on
Anonymous
State Farm's money market account is listed today on bankrate.com as having an APY of 2.05% for balances of $100G or more, down from 2.20%, which they had listed on bankrate the past couple of days. They usually update their rates on Wednesdays, so that may be what we can expect for tomorrow.

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Comment #4 by Anonymous posted on
Anonymous
State Farm lowered its money market rates still again. The APY is now down to 1.90% for the $100,000+ tier.

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Comment #5 by Anonymous posted on
Anonymous
I started a CD at the 2.71 18-month rate a few weeks ago. Wonderful customer service and the rate locks immediately. I did not have to send in the check until after receiving the application in the mail. In total, the entire process was about 10-14 days (initial phone through having internet access to the CD, this inclusive of the memorial day holiday and weekends not acutal business days). I will definitely do more business with State Farm!

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