Competitive CD and IRA CD Rates at Nationwide Bank - Nationally Available
Nationwide Bank did something that is rare these days. It increased some of its CD rates. Its long-term CD and IRA CD rates are now quite competitive. The highest rates require a $100K minimum. Some of the best rates include a 1.45% APY 18-month CD, a 2.00% APY 3-year CD and a 2.60% APY 5-year CD. The rates are only 5 basis points lower for a $500 minimum deposit. Early withdrawal penalty is 180 days of interest on the amount withdrawn for terms of 2 years or more. The early withdrawal penalty for the 18-month CD is 90 days of interest. These rates are listed at Nationwide Bank's CD page as of 1/18/2011.
As compared to internet banks on 1/18/2011, the best 5-year CD rate is 2.75% APY at Salem Five and the best 3-year CD rate is 2.00% APY at OneWest Bank. One advantage of Nationwide Bank vs. these other two banks is a smaller early withdrawal penalty.
Nationwide Bank also has a competitive money market account with a 1.10% APY on all balances as of 1/18/2011. I did a full review of this account in this 2008 blog post.
Early Withdrawal Considerations
When I reviewed the bank's bank's terms and conditions, one thing I liked is what the bank stated regarding the early withdrawals. Unlike disclosures at other banks, it states specifically that early withdrawals are allowed:
You may make withdrawals of principal from your account before maturity. Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty.
The early withdrawal penalties are reasonable and straightforward:
If your account has an original maturity of 12 months, but less than 24 months: The fee we may impose will equal 90 days interest on the amount withdrawn subject to penalty.
If your account has an original maturity of two years or greater: The fee we may impose will equal 180 days interest on the amount withdrawn subject to penalty.
I didn't go through the terms and conditions with a fine-tooth comb for any other potential gotchas. As I described in this November blog post, there are some risks with long-term CDs.
Certificate of Deposit Details
Some of the important CD details described in the bank's terms and conditions and from my conversation with the CSR today include:
- Early withdrawal penalty is 90 days interest for terms of 6 months to under 24 months (180 days for 24 months and longer)
- 10 calendar grace period at maturity
- Interest is compounded daily and credited monthly
- You can withdraw interest any time during the term of crediting after it is credited to your account.
- Rate locks at the time you apply online or by phone. You have 30 days to fund the account. (CSR)
- You can fund the CD with an ACH transfer. Trial deposits are done to verify external account. Mailing a check and a wire transfer are also options (CSR)
- Beneficiaries can be added using this form (pdf)
- At maturity you can provide instructions by phone or secure message to close the CD (CSR)
- At maturity ACH transfer is not an option to receive the funds. In addition to a check and wire transfer ($25 fee for outgoing wire), they can transfer funds to your Nationwide Bank liquid account (CSR)
Another plus with Nationwide Bank is that they offer types of accounts that many online banks don't offer. These include:
- Trust accounts
- Custodian (UGMA/UTMA) accounts
- Traditional IRA and Roth IRA accounts
Nationwide Bank Overview
Nationwide Bank is a sizable bank with $3.76 billion in assets. Its overall health score at DepositAccounts.com is 4 out of 5 with a Texas Ratio of 0.97% (excellent) based on September 2010 data. Please refer to our financial overview of Nationwide Bank for more details. The bank has been a FDIC member since 1998 (FDIC Certificate # 34710).
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.
Banks Mentioned in this Post:
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