Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Wilshire Bank2.28%$1k-36 Month Rainbow Savings w/ Automatic Transfer from a WSB Deposit Account
Wilshire Bank1.77%$1k-24 Month Rainbow Savings w/ Automatic Transfer from a WSB Deposit Account
Wilshire Bank1.77%$1k-30 Month Rainbow Savings w/ Automatic Transfer from a WSB Deposit Account
Wilshire Bank1.51%$1k-12 Month Rainbow Savings w/ Automatic Transfer from a WSB Deposit Account
Wilshire Bank1.51%$1k-18 Month Rainbow Savings w/ Automatic Transfer from a WSB Deposit Account
Accounts mentioned in this post. Rates as of July 28, 2014

Wilshire State's Bank Installment Savings Account

POSTED ON BY

Wilshire Bank

It has been a while since my last report on Wilshire State Bank's Rainbow Savings Account. The rates dropped last November, but they've held since then which makes them a good deal. The Rainbow Savings Account is an installment savings account in which you make equal monthly deposits during the term rather than one initial deposit like a CD. However, like a CD the rate is fixed during the term.

The current rates as listed at Wilshire State Bank's Rainbow Savings page as of 5/06/2010 are shown below. These rates assume you have automatic transfer from a Wilshire State Bank deposit account.

  • 3.82% APY 36 months
  • 3.30% APY 30 months
  • 3.30% APY 24 months
  • 3.05% APY 18 months
  • 3.05% APY 12 months

If you want to compare the above rates to CDs with comparable maturities, it requires that you consider the rate you receive on the savings or checking account that holds the initial lump sum. The monthly deposits would come from this account. By the time the installment savings account matures, all of the principal of the savings or checking account has been transferred to the installment savings account. So about half of the money earns the savings/checking account rate for the term, and about half earns the installment savings rate. So you can estimate the equivalent CD yield by averaging the two rates. Here are the equivalent CD yields of the Wilshire Rainbow Savings Account assuming you also have Wilshire's eLink Savings account with a 1.25% APY that will last through the term.

Estimated CD Equivalent Yields

  • 2.54% APY 36 month
  • 2.28% APY 30 months
  • 2.28% APY 24 months
  • 2.15% APY 18 months
  • 2.15% APY 12 months

Maximum contract amount is $100,000 per customer. There's an online application for this Rainbow account, and I've been told by the CSR that it's available nationwide.

I have more details about opening this account in my April 2009 review of Wilshire State Bank. Additional useful details are available in this Fatwallet thread. One reader reported in November of problems with the online application. Hopefully, it works better now. If you've recently given it a try, please leave a comment.

You can also open the Rainbow Savings account at a Wilshire State Branch. Branches are located in Southern California, New York, New Jersey, and Dallas and Forth Worth, Texas.

The bank's ratings for safety and soundness continue to be above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 12/31/09 data. The bank has been a FDIC member since 1980 (FDIC Certificate # 23301).


  Tags: Wilshire Bank, California, Texas, New Jersey, New York

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Comments
16 Comments.
Comment #1 by Wil (anonymous) posted on
Wil
I have installment savings at Wilshire State Bank, NewBank USA, and Woori America Bank. Readers might be interested in a comparison of Wilshire's rates with the other two banks. NewBanks Regular ISAs currently have the same rates as Wilshire's in the 12-month to 30-month terms; its rate for the 36-month term is lower, at 3.56%. But NewBank still has the 6-month vacation club at 6.50% ($5000 maximum) and the education club at 5.50% (5-yr.), 6.50% (10-yr.), and 7.0% (15-yr). Since last October they have a restriction of one account type per customer. Woori America Bank's Happy Club Savings rates are much lower: 2.25% (12-mo. & 18-mo.), 2.50% (24-mo., 36-mo., 48-mo.), and 2.75% (60-mo.), as of July 29, 2009 rate sheet (I don't think that it has since changed). NewBank and Woori America Bank also have savings and tiered money market accounts; NewBank's rates are better, though nothing to get excited about (0.50% APY Savings, $300 minimum to avoid fees; Rate tiers for the Money Market range from 0.50% to 1.51%). NewBank also has something called "Fusion CD" with a rate of 1.76% (25K minimum), which seems to be a semi-liquid account which allows one debit card transaction per month.

10
Comment #2 by Wil (anonymous) posted on
Wil
I think I should clarify my statement of the restriction of one account type per customer in my post above. It means that you can may have one account of each type: i.e., you can have one vacation club account, one education club account, and one regular ISA account. You cannot have more than one account of the same type.

1
Comment #3 by Anonymous posted on
Anonymous
Do not foreget that Woori does not pay interest untill maturity - so you get 1099OID instead of 1099INT, and if you close out earler you are out of ALL interest,

Wilshire pays out quarterly - so if you close early you loose interest only from the last payout.

1
Comment #4 by CTM posted on
CTM
Nara Bank offers a similar Installment Savings account, but it is not limited to 100K per customer.

Rates are 12m @ 2.50%, 18m @ 2.75%, 24m @ 3.00%, 30m @ 3.25% and 36m @ 3.50%.
These rates are from the rate sheet at the Garden Grove branch on 05/05/2010.

Interest is paid quarterly.

This account is not listed on their website, so a branch visit is (likely) required.

4
Comment #5 by Quovatis posted on
Quovatis
I have an installment savings at Hanmi bank.  It's a great deal for those who need to put away a monthly amount and don't have the full sum all in hand.  I have a substantially higher income this year, so I'm using the safe harbor tax rule to have less withheld than I normally do.  I put the extra in the installment account, and when it matures, I pay the fed the principle and pocket the interest.

1
Comment #6 by Anonymous posted on
Anonymous
I have an installment acct at Hanmi Bank in San Diego. It pays 5% over 5 years (no longer available I think). The real interest rate equivalent is only like 1.5% on the lump sum at the end of the term.

These accounts are only worth it if you have very little money saved up already (like you live paycheck to paycheck). it forces you to save money because it's an automatic withdrawal every month. If you have a large sum to invest it's probably better to get a regular CD.

1
Comment #7 by drjoanv posted on
drjoanv
I just called NewBank and the interests rates are as mentioned.   I was hoping that they would not have much of a penalty however for early termination (of the 5 yrs)..They do have a HUGE penalty, however, "50% of the accrued interest"...so one could not terminate early  ...like some of the Insallment savings accts that I have....if interest rates increased quickly

1
Comment #8 by drjoanv posted on
drjoanv
I also called Nara Bk and their max is now $100K, but they have NO penalty for early withdrawl (after 6 months)

1
Comment #9 by Wil (anonymous) posted on
Wil
drjoanv is correct about the 50% early withdrawal penalty at NewBank; however, that is only for the Education Club. The early withdrawal penalty for the regular ISA is 30 days accrued interest for terms of one year or less, and 90 days of accrued interest for terms over one year. The Vacation Club early withdrawal penalty is 14 days of accrued interest. By the way, NewBank pays interest at maturity, and sends a 1099OID instead of a 1099INT. For that reason, in my opinion, if the rate is the same for the same term, it is better to do an ISA with Wilshire State Bank, which as anonymous #3 correctly points out, credits interest quarterly. Incidentally, the personnel at NewBank's Fort Lee branch is by far the friendliest of all the Korean-American banks in my experience.

Anonymous #3 is correct that Woori America Bank credits interest only at maturity, and sends a 1099OID instead of a 1099INT. But s/he is wrong about the consequences of early withdrawal. The early withdrawal penalty is 6 months loss of interest (except for branches in CA, in which it is 2 months of interest) for terms up to one year, 12 months loss of interest for terms of 1 to 3 years, and 18 months loss of interest for terms of 3 years or more (this is taken directly from p. 37 of the pamphlet "Important Account Information for Our Customers."

1
Comment #10 by Anonymous posted on
Anonymous
I have several Rainbow installment accounts at Wilshire and just have to comment that the service from them is excellent.  I just had one mature and they even sent me an actual email from a human to remind me and ask me how I wanted the proceeds sent to me.  They were even willing to ACH to any bank account I have. 

4
Comment #11 by Anonymous posted on
Anonymous
Just called Hanmi Bank and they no longer offer the installment savings accounts.

2
Comment #12 by Anonymous posted on
Anonymous
Rates are dropping next week as follows:
12 months 2.53%APY (from 3.05%)
18 months 2.53%APY (from 3.05%)
24 months 2.79%APY (from 3.30%)
30 months 2.79%APY (from 3.30%)
36 months 3.30%APY (from 3.82%)

1
Comment #13 by Anonymous posted on
Anonymous
Rates are dropping next week as follows:
12 months 2.53%APY (from 3.05%)
18 months 2.53%APY (from 3.05%)
24 months 2.79%APY (from 3.30%)
30 months 2.79%APY (from 3.30%)
36 months 3.30%APY (from 3.82%)

1
Comment #14 by Anonymous posted on
Anonymous
rates are the same on Monday...

-1
Comment #15 by Wil (anonymous) posted on
Wil
Well, #12 and #13 are right. The Rainbow Savings rates dropped today, and are now showing on the bank's website.

1
Comment #16 by Wil (anonymous) posted on
Wil
By the way, the APY of NewBank's Fusion CD that I mentioned in my first post has since dropped to 1.51%.

1