# Wilshire State's Bank Installment Savings Account

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).

(anonymous)posted on(anonymous)posted onWilshire pays out quarterly - so if you close early you loose interest only from the last payout.

Nara Bankoffers 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.

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.

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(anonymous)posted onthat 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."

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%)

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%)

(anonymous)posted on(anonymous)posted on