3.50% 48-Month CD & 2.00% 12-Month CD at Terrabank in Miami - Local Only

Terrabank is offering some competitive CD rates. The rates are not listed at the bank's website. A reader emailed me news about them, and I just called for additional details. Below is the list of CD and IRA CD rates that I was told as of 12/16/09:

• 2.00% APY 12 months (2.17% IRA)
• 2.30% APY 24 months (2.53% IRA)
• 3.00% APY 36 months
• 3.50% APY 48 months

Minimum deposit is $2,500. CD details are listed in the CD disclosure. One thing I noticed was that it allows add-on deposits. However, according to the CSR, the rate earned on add-on deposits is not the original rate but the current rate at the time of the add-on deposit. So that is not too useful.

One notable CD feature is a mild early withdrawal penalty: 90 days of interest for terms of one year or more. Based on this, the 4-year CD becomes very attractive. If you close the CD at 1-year, you would lose about 3 out of 12 months of interest. The result would be an effective rate of about 2.62%. At two years, the effective 2-year rate would be about 3.06% for the 2 years.

A branch visit is required to open an account. Branches are located in Miami and Hialeah, Florida.

The bank's ratings for safety and soundness are a little weak: 2 stars (below peer group) at Bankrate.com (based on 6/30/09 data) and 3 stars (adequate) at BauerFinancial (based on 9/30/09 data). The bank has been a FDIC member since 1985 (FDIC Certificate # 26442).

Other Competitive Certificate of Deposit Rates

• CD rates at DepositAccounts.com (overview of DepositAccounts.com)
• My weekly list of hot nationwide and local CD deals