Dedicated to Deposits: Deals, Data, and Discussion

2.10% 12-Month CD at UmbrellaBank - Available Nationwide

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Update 11/03/09: The 12-month CD rate has fallen back down to 2.10% APY.

Update 10/31/09: The 12-month CD rate has gone up! It's now 2.20% APY.

UmbrellaBank raised its 12-month CD rate today to 2.10% APY. Minimum deposit is $1,000. The bank's other CD rates are not quite as competitive. This 2.10% 12-month CD is listed at the bank's CD rates page as of 10/29/09.

UmbrellaBank has an online application that allows funding via an ACH transfer. When I last checked with the bank, I was told that the ACH transfer is not an option when the CD matures. I have the many details about UmbrellaBank CDs in my UmbrellaBank review.

Financial Overview

UmbrellaBank is the online banking division of New South Federal Savings Bank, a privately held company based in Alabama. You can find UmbrellaBank mentioned in this New South FSB press release. New South FSB is a FDIC member (FDIC certificate # 32276).

New South FSB isn't doing well financially. According to the Birmingham Business Journal:
[New South FSB] got caught up in subprime lending and construction and land development, two of the hardest-hit sectors in the recession. The bank is struggling with more than $247 million in nonperforming loans. It is currently under a cease and desist order issued by the Office of Thrift Supervision, which demands it must raise its capital levels my the end of this month

You can read the OTS's cease and desist order here. As you might expect it has low ratings for safety and soundness: 0 star (lowest) at BauerFinancial and 1 star (lowest) at Bankrate.com. Both ratings are based on 6/30/09 financial data.

Other Competitive Certificate of Deposit Rates

  Tags: CD rates, IRA rates

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Comments
2 Comments.
Comment #1 by Lawrence (anonymous) posted on
Lawrence
I hear that many online banking institutions have been offering much better rates but all should do their research to ensure they're not investing in a lost cause.

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Comment #2 by Anonymous posted on
Anonymous
For the most part, online banks have consistently offered higher rates than the bricks and mortar banks. This is not heresay, but a fact that you can see in many of the rate charts on financial websites. What do you mean by a "lost cause"? Are you referring to people who lost money in online banks? Or are you referring to putting your money into a bad rated bank that eventually closes like Indymac? Well, as long as you put into the bank below the FDIC limit, you are reasonably safe with your money. Now, if you are referring to the "lost interest" that might occur on your account for closed banks, well even if the revised terms are not to your satisfaction, the takeover bank usually allows you to close the account.

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