ING Direct just came out with its Added Value CD in which they add an extra 15 basis points to the current 12-month CD rate when you fund the CD with new money from an external source. This results in a very competitive rate of 2.25% APY as of 10/07/09. Unfortunately, you can't transfer from your ING Direct savings account to your linked checking account, and then use it to fund this CD. According to the small print, the new money must increase your total deposit balance with ING Direct above your balance on 10/7/09.
Last Friday ING Direct increased its 12-month CD rate from 1.85% to 2.10% APY. The 2.10% was already competitive. Now with this extra 15 basis points, ING Direct's CD rate is near the top, and it matches MetLife Bank's 12-month special CD rate. The only advantage with MetLife's CDs is that they allow beneficiaries (see post). For some reason, ING Direct doesn't allow beneficiaries on its accounts. They do allow joint accounts, living trust accounts and IRAs. Other than this beneficiaries issue, there's a lot to like with ING Direct CDs. They make it easy to open and manage the CDs. Refer to my ING Direct CD review post for all of the details.
ING Direct's ratings for safety and soundness used to be strong, but they're now only average: 3 stars (adeqaute) at BauerFinancial (based on 6/30/09 data) and 3 stars (performing) at Bankrate.com (based on 3/31/09 data). It has been a FDIC member since 2000 (FDIC Certificate # 35489). ING Direct is the largest internet-only bank with $90.1 billion in assets and $74.8 billion in deposits. As a comparison, Ally Bank has $42.5 billion in assets and $36.6 billion in deposits.
Other Competitive Certificate of Deposit Rates
For those with at least $25,000 to invest into a CD, you can currently get a higher 1-year CD rate at Alliant Credit Union. Opening and managing the CD may not be as easy as it is at ING Direct, but they do have other advantages such as allowing beneficiaries. For links to Alliant CDs and other top CDs, please refer to the following: