Dedicated to Deposits: Deals, Data, and Discussion

4.00% 60-Month CD at FNBO Direct - Nationally Available

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FNBO Direct
Update: The CD rate has fallen. Please check the bank's website for the latest rates.

FNBO Direct is offering a competitive 5-year CD with a rate of 4.00% APY. Some other fairly competitive mid-term CDs include a 2.75% APY 24-month CD and a 3.01% APY 36-month CD. The shorter terms are less competitive. These rates are listed in FNBO Direct's CD disclosure page as of 4/05/09. Minimum deposit is $500.

As described in their CD page, you must first have a FNBO Direct savings account to be able to open a CD.

CD Details

I did a review of these CDs last year. One thing to note is that these CDs are technically callable CDs. From the CD disclosure:
We may accelerate the maturity or call this account at our option on any maturity upon 30 days written notice.

However, I've been told by FNBO Direct that this callable feature is unlikely to be used:
Our CDs are callable, however, even in our parent company, we have never called our CDs to come due early.

Online Savings Account, the Good and the Bad

Many readers had problems with FNBO Direct during their 6% promotion in 2007. Some readers reported receiving requests for employment history with threats of account holds. In many cases, holds were actually placed on accounts (see post).

I've had the savings account since May of 2007, and so far I've been fortunate not to have any problems with the savings account. The rate as of 4/05/09 is 1.90% APY. The yield has remained fairly competitive for a mature, no-minimum online savings account (as compared with ING Direct, HSBC and ETrade). But I have to admit that the last rate cut that brought the rate below 2% was disappointing. FNBO Direct has an ACH transfer service in which you can initiate bank-to-bank transfers. One downside to their transfer service is that transfers are slow. It can take 3 to 5 days to transfer with at least 2 days in which the transferred money is not earning interest. Please see my full review of FNBO Direct's savings account for more details.

Checking and Cash Back Credit Card

FNBO Direct also offers its savings account customers an internet checking account and a cash back credit card (see post). Their internet checking account is called Online BillPay since online bill pay replaces paper check writing. It's similar to ING Direct Electric Orange account. See the Online BillPay Account Disclosure for more details.

Financial/FDIC Overview

FNBO Direct is part of First National Bank of Omaha. Deposit accounts opened through FNBO Direct are FDIC insured through First National Bank of Omaha (FDIC Certificate # 5452). For those looking for a strong bank, FNBO seems to be in good shape. They continue to have 4 stars (sound) at Bankrate.com (based on 9/30/08 data). Their ratings at BauerFinancial has recently gone up to 4 stars (excellent) based on 12/31/08 data. It had been 3.5 stars when the rating was based on 9/30/08 data.
  Tags: FNBO Direct, CD rates

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