Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Simplicity Bank1.25%$10k-3 Yr to <5 Yr IRA (Traditional,Roth,CESA)
Simplicity Bank0.80%$1k-3 Year to Less than 5 Year CD
Accounts mentioned in this post. Rates as of July 30, 2014

Special 5-Year CD and IRA CD Rate at Kaiser Federal Bank in California

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Kaiser Federal Bank just started offering a 5-year CD special with a 2.75% APY. Minimum deposit is $10,000, and it's also available in an IRA. This is listed in the bank's CD rate table as of 1/14/2011.

The bank's standard 3-year CD and IRA CD rate is also fairly competitive at 1.75% APY. However, it's down quite a bit from October when the yield was 2.15%.

As compared to the best 5-year CD rates available nationwide as of 1/14/2011, you can get 3.00% APY at Connexus Credit Union (requires active checking) and 2.75% APY at Salem Five Direct.

When I called Kaiser Federal in 2009, I was told that people in any state can open its CDs (checking accounts and IRA CDs are only for CA residents). However, it looks like the CD opening process is much easier if you open a CD at one of the bank's branches. You can do an initial application online or by phone (1-800-524-CASH). However, the CSR said they will still mail you forms to sign that must be returned with copies of your IDs and with your check. Unfortunately, the CD rate doesn't lock until they receive the check. However, the CSR said you can include a note with the check instructing them not to open the CD if the rate has fallen. The CSR also said they don't accept wire transfers to fund CDs. Wire transfers can be used to add to your savings or money market account.

According to the bank's disclosure, the early withdrawal penalty for terms greater than one year is 180 days of interest whether earned or not (may eat into the principal). There's a 7-day grace period when the CD matures.

Branches are located in the California cities of Bellflower, Covina, Fontana, Harbor City, Los Angeles, Panorama City, Pasadena and Santa Clara.

The bank has an overall health score at DepositAccounts.com of 3 out of 5 with a Texas Ratio of 24.99% (above average) based on September 2010 data. Please refer to our financial overview of Kaiser Federal Bank for more details. The bank has been a FDIC member since 1999 (FDIC Certificate # 35448).

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  Tags: California, CD rates, IRA rates

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Comments
10 Comments.
Comment #1 by Inforay posted on
Inforay
Ken, maybe this is asking too much, but could you possibly list the early withdrawal penalties of the 5-year CDs to allow for a better comparison.  Some 5-year CDs may offer 3% but the early withdrawal penalties are too severe.  With the rate environment we are in, we are now left with comparing withdrawal penalties (whether it will cut into principal; how much will they penalize us) in the hope that in about 1-2 years interest rates will rise and we can liquidate the CD with the least penalty.  Thank you for the wonderful job and this wonderful blog.

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Comment #2 by KenBDG posted on
KenBDG
I did mention the early withdrawal penalty in the post with a link to the disclosure. I guess I should have mentioned it above the long paragraph on the application details.

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Comment #3 by Inforay posted on
Inforay
KenBDG, I deeply appreciate the invaluable information you provide on your blog.  For middle-aged people like me, this is a wealth of information not readily available elsewhere.   Many of us had hoped to have a stream of income from laddered CDs for our retirement.  Now retirement is a distant dream with the highest interest we can receive being about 3%.  I have a large number of CDs which were paying 6% or more all coming due in 2011 and it has become a full-time job just trying to figure out which CD will be best.  We are now relegated to comparing early withdrawal penalties since the rates are so low!  Is it possible to check the 10-year CD at Apple FCU?  Their page had indicated an early withdrawal penalty of three years interest.  However, when I called and spoke to  Mike in their IRA department, he said they were in the process of modifying it to a penalty of 365 days interest.  I was just hoping someone else could confirm if the information is accurate.  Again, thanks Ken.

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Comment #4 by no stock 4me Cramer (anonymous) posted on
no stock 4me Cramer
I hear ya inforay, I'm about the same, I don't own stock or PM's just mess with CD's and Mny mkts, been doin fine till Ben got into this stuff.

However no way would I go out 10 years for 3%, 10 years would need to be at least 5 or better for me to lock up money that long at this point. I also have 1 CD left at Wachovia still drawing 6% it was left alone even when Wells took over, till Oct this year.

I have a lower one due next month at the local CU. Went to see the guy I know at Suntrust, all the banks and the CU here aren't paying a ****ed thing. He did tell me if I moved 25K to my mnymkt I could get 1.2 for a while, so I'll do that next week till the CD comes due at the CU, than see what I can do for another CD there.

This stuff is pretty nutty, I don't pay much attention anymore to the word competitive" as nothing is competitive at these rates, but he did say things are rumblling that rates may well start upward by end of the year, abit slowly but still its worth hanging on and staying short term.

 

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Comment #5 by Inforay posted on
Inforay
I raised three kids, put one through medical school and another through law school, with mininal debt ($32,000 and $17,000 respectively) using this strategy of CD laddering and going long term.  It always worked.  Then, ALONG CAME BEN, and messed up all my carefully laid plans.  Just this morning, I read on CNN that he (Bernanke) was taking credit for how well the stock market was doing and read another article on Yahoo that JP Morgan Chase's income had jumped 47 percent.  I was upset to say the least, and wrote to the FDIC at their Feedback e-mail as follows:

"So Ben Bernanke is touting that his actions led to the stock market rally. Obviously, he has done so at the expense of hard working, thrifty savers who put their money in bank CDS.  He has taken away all of our interest earnings by keeping interest rates at 0%.  All that Bernanke has succeeded in doing is forcing people who want conservative investments to flock into speculative investments, i.e., the stock market, thereby artificially raising the price of stocks and creating an alleged "rally."  Bernanke has not accomplished anything substantive.  He has not created jobs, he has not stabilized the housing market, he has not helped the common man and he has destroyed the dollar.  Moreover, his actions will lead to widespread inflation.  Bernanke has accomplished NOTHING except provide a windfall to banks and large corporations who can borrow at zero percent.  The common man does not get a break and banks are not lending, simply increasing their profits by financial shenanigans since they are able to borrow at zero percent.  Please read the immense frustration of people on various boards, blogs and postings, and you will see how monstrous Bernanke''s actions are and how he has been perceived."

WIthin minutes, I got this response:

"Thank you for your most recent correspondence to the Federal Reserve Board. We appreciate your willingness to share your views."

In the past, when I have written, the response I got says, among other things:

"It is also important to recognize that the Federal Reserve has no general jurisdiction over the rates on savings instruments, such as CDs, which are determined by financial institutions."

If the Federal Reserve Board really believes that its actions do not affect CD rates, then they should all be fired!  Why would banks pay savers or lend to small businesses, when they can borrow from the Fed at 0% and then purchase treasuries at 3% or more, making a profit without the slightest risk??

Right now 3% on a long-term CD is looking good depending on the penalty for early withdrawal.

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Comment #6 by no stock 4me (anonymous) posted on
no stock 4me
like I said Inforay,    "I hear Ya"  :)

 

 

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Comment #7 by William (anonymous) posted on
William
The Feds definitely do have jurisiction over the interest rates paid by banks.  On May 29, 2009, the FDIC began enforcing a rate cap on interest yields, in an effort to reduce costs when a bank fails.  See rates here: http://www.fdic.gov/regulations/resources/rates/index.html

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Comment #8 by ron m (anonymous) posted on
ron m
inforay,

I am in total agreement with everthing you said, very well put!!!!!!!!!! I am also in the same stuation you are  in, with interest rates so low. I am 65 and retired and had to go back to work. It is very frustrating what has been done punishing the saver in favor of supporting the stock market and banks.

I am looking forward to reading the Wikileaks report on some of corrupt  US banks. maybe then we will get some truth in what is really going on. I am sick of being lied to by the goverment officials.

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Comment #9 by ron m (anonymous) posted on
ron m
I went to the Kaiser web site and found the early withdrawal penalty. On a five year cd is 180 days

from their web site:

Withdrawal of Interest Prior To Maturity - The Annual Percentage Yield (APY) is based on an assumption that interest will remain in the account until maturity. A withdrawal will reduce earnings.

 

Early Withdrawal Penalties - Paid interest may be withdrawn at anytime without penalty. Any funds withdrawn will not earn interest for the current and succeeding interest periods. Withdrawal of funds representing the principal of the account will be subject to the following:

  • If the qualifying period is one year or less, the customer shall forfeit an amount equal to ninety (90) days interest whether earned or not (this may reduce principal and result in account closure).
  • If the qualifying period is greater than one year, the customer shall forfeit an amount equal to one hundred and eighty (180) days interest whether earned or not (this may reduce principal and result in account closure).
 

Penalties Shall Not Apply For:

  • Withdrawal of paid interest.
  • Withdrawals made subsequent to the death of any owner of the account.
  • Withdrawals made as a result of the voluntary or involuntary liquidation of Kaiser Federal Bank.
 

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Comment #10 by Bill (anonymous) posted on
Bill
Lots of good info in the above posts....thanks all.

As for me, I am a very conservative, retired investor with mainly CD's and MM accounts. In the past, this approach has worked fairly well, but not now.  Since I am reluctant to being forced to invest in stocks, or other not so safe investments, at least to a material degree, it looks as though my only alternative for now is to reduce my expenses wherever I can and be resigned to living off some of my principal , which can go on for only so long.  To date, I have seen absolutely no concern, by the powers that be, for the conservative investor, except to rely on us to help bail out many, many others. With all the money being printed and spent, you would think that rates would have to increase, sooner rather than later, and in spite of what Ben says or does.

This site is an excellent aid to help locate whatever decent returns may still be available, and I thank Ken for that. 

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