iGObanking recently made a major bump in the rate of its 5-year CD. It's currently 3.55% APY. Minimum deposit is $1,000, and it's also available in an IRA. This rate is listed in iGObanking's CD rates page and IRA rates page as of 2/03/2010.
Long-term CDs may seem unwise when there's a risk that we may see high inflation and much higher interest rates in the near future. But it's not easy to predict when interest rates will rise. It could be in 6 months or in 3 years. For those looking for a top 5-year CD for their CD ladder, this is a good deal.
Every now and then iGObanking.com comes out with a good CD deal, but you have to be careful when the CD matures. Many of the CD rates are not competitive. So if you let your CD automatically renew, you may get stuck with a low-rate CD. A current example is the 1-year CD which has a yield of only 1.00% APY.
There's an online application that allows electronic funding via ACH. However, when you close the CD, they don't seem to provide a way to transfer it out via ACH. When I spoke with a CSR in 2008, I was told that you can request for them to send you a check via their secure email. You also have the option to transfer the money into your iGObanking savings or checking account.
The certificate of deposit details are described in their disclosure page. The early withdrawal penalty for CDs with terms of one year or over is 180 days of interest. The disclosure does give them the right to refuse an early withdrawal of principal:
You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.
The grace period after maturity in which you can close the CD without penalty is 7 calendar days.
My previous iGObanking reviews:
iGObanking.com is a division of Flushing Savings Bank, FSB, a New York bank with $4.1 billion in assets and 16 branches. Its ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 data. It has been a FDIC member since 1943 (FDIC Certificate # 16049).