Flagstar Direct is offering two competitive internet CDs: a 1.55% APY 12-month CD and a 1.25% APY 6-month CD. Minimum deposit is $500. These rates are listed in Flagstar Direct's CD page as of the morning of 7/19/2010.
Refer to the disclosures tab of the Flagstar Direct CD page for more CD details. According to the disclosure, the 6-month CD has an early withdrawal penalty of 30 days of interest. The 12-month CD has a 180-day penalty. When I checked with Flagstar last year, I was told that the CD can be funded with an ACH transfer, but they didn't have an ACH option to receive the funds at maturity.
Flagstar Bank launched Flagstar Direct late last year. Before that time, it had offered its Express Money Market Account nationwide since 2007. The account had a history of competitive rates until December of last year when the rates plummeted. Since that time I haven't paid much attention to Flagstar Direct. It appears the CD rates at least are back to being competitive. The money market account is more competitive (relatively speaking) than what it was in late December, but it's still a little low at 1.06% APY for balances under $100K. It does have two nice features: 1) no minimum balance, and 2) free checks for life. Flagstar Direct also has a internet checking account with these same features. Compared to internet checking accounts at ING Direct, Charles Schwab and Salem Five Direct, Flagstar's checking account is not bad. It currently has a rate of 0.85% APY on all balances as of 7/19/2010.
Flagstar Bank currently operates around 165 branches in Michigan, Indiana and Georgia. The bank has been hit hard by mortgage problems that started during the financial crisis. It has made some improvements this year with an increase in its Tier 1 Capital Ratio. More details about Flagstar's financial health are available at our financial overview of Flagstar Bank. The bank has been a FDIC member since 1987 (FDIC Certificate # 32541).
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