NewAlliance Bank is offering a very competitive 5-year CD rate of 3.50% APY. Minimum deposit is $1,000, and a checking account is required. This CD is listed in the bank's CD rates page as of 4/18/2010. The other CDs are not quite as competitive. These include a 1.40% APY 15-month CD and a 2.00% APY 30-month CD. These are also available in an IRA.
The bank has an online application (via andera.com), but it states that they only accept deposits from Connecticut or Massachusetts residents. In the application, they have a link to the account disclosure. The disclosure points out a major downside with the long-term CDs:
For CDs with an originally scheduled term of three (3) years or more, the fee we may impose will be equal to one half of the interest that could have been earned on the amount withdrawn at the rate being paid on the deposit from the date of early withdrawal to the Maturity Date.
Based on my interpretation of this, if you make a withdrawal 2 years before maturity, you'll lose 1-year of interest. This is much worse than the typical 6-month early withdrawal penalty.
There's also a Premium Money Market Account special that pays 1.50% APY on balances of at least $50K. This is listed in the bank's specials rates page as of 4/18/2010. Note, the small print states that the rate is 1% APY for up to $50K and 1.50% APY for $50K. Note, this requires a checking and there are potential monthly fees. Also, there's no guarantee about how long this rate may last.
Branches are located throughout Connecticut, and in South Central Massachusetts.
The bank's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial (based on 12/31/09 data) and 4 stars (sound) at Bankrate.com (based on 9/30/09 data). The bank has been a FDIC member since 1960 (FDIC Certificate # 18261). It's a sizable bank with $8.4 billion in assets.
Best 5-Year CD Rate
It used to be fairly easy to find a 3.50% yield for a 5-year CD. This ended in April, and now it's hard to find. The best nationwide 5-year CD rate from a bank is currently 3.30% APY at EverBank. The best nationwide deal is currently at Fort Knox FCU which is offering 3.50% APY.
To find other high CD rates that are available by state or nationwide, please refer to the CD rates section of DepositAccounts.com.
Are long-term CDs a mistake now? I discussed the issue in this post.