Dedicated to Deposits: Deals, Data, and Discussion

2.40% 12-Month CD & 2.80% 24-Month CD at Frontier Bank in WA & OR - Available Nationwide

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Frontier Bank
Update: These CD Rates have ended. Union Bank acquired Frontier Bank as of April 2011.

Frontier Bank is offering several competitive rates on its CDs that can be opened online. These include a 2.00% APY 6-month CD, a 2.35% APY 12-month CD and a 2.60% APY 24-month CD. Minimum deposit is $500. For a $50,000 minimum, the 12-month CD APY is 2.40% and the 24-month CD APY is 2.80%. These rates are listed in the bank's rates sheet as of 7/29/09.

I contacted the bank representative this afternoon using their toll-free number (1-888-779-4801), and according to the CSR, they accept applications from out-of-state customers. The CDs can be funded by an ACH transfer. I was told the rate will lock at the time of the application as long as they receive the deposit within 5 days. I was told the rates typically change at the start of each month so lower rates may take effect after Friday. If you don't want to renew at maturity, you can request that they mail you a check or you can request a wire transfer (with a fee). I was told they can accept instructions by phone for the CD closure. According to the first page of the application, all applicants must be a US resident.

Branches are located throughout Washington State including the cities of Port Angeles, Vancouver, Seattle, Redmond, Bremerton, Tacoma, Mount Vernon and Everett. There are also branches in the Oregon cities of Salem and Portland.

Financial/FDIC Info

The bank is not in the best financial health. Many of their issues are described in their Second Quarter 2009 Results (pdf). It appears they've been hit hard by the local housing market. They also mentioned the issurance of a FDIC Cease and Desist Order. According to the bank:
we believe we have already addressed all of the regulators' requirements, with the exception of increasing Tier 1 capital, in which efforts are currently underway.

Their liquidity section explains for the high deposit rates:
We continue to closely monitor and manage our liquidity position, understanding that this is critical importance in the current economic environment. Attracting and retaining customer deposits remains our primary source of liquidity.

As you might expect, their ratings for safety and soundness are low: 1 star (lowest) at Bankrate.com and 0 star (lowest) at BauerFinancial. Both ratings are based on 3/31/09 financial data. The bank has been a FDIC member since 1978 (FDIC Certificate # 22710).

Other High Certificate of Deposit Rates
  Tags: Washington, Oregon, CD rates, Frontier Bank

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