Update on Salem Five Bank's CD Specials - Available Nationwide

Salem Five Bank increased the rate of its 2-year CD special from 1.50% to 1.75% APY. Its other two special CD rates remain the same: 2.75% APY for 5 years and 1.35% APY for 14 months. Minimum deposit is $10K for a regular CD and $2K for an IRA CD. These CD rates are listed in the bank's account rates page as of 1/12/2011.

Certificate of Deposit Details

I reviewed the details of these CDs and the application process in my December Salem Five CD review. These CDs can be opened online by people in any state. One downside to Salem Five's long-term CDs is a severe early withdrawal penalty. For a 60-month term, it's 15 months of interest. The penalty for the 14-month and 24-month CDs is 6 months of interest. Please refer to their CD Disclosure for more details.

Compared to CDs at Other Banks and Credit Unions

All three of these special CDs are very competitive. As compared to other internet banks on 1/12/2011, the best 1-year and 2-year CD rates are 1.41% APY and 1.60% APY at Bank of Internet USA and the best 5-year CD rate is 2.61% APY at EverBank

Unlimited Deposit Insurance (FDIC + DIF)

One advantage that Salem Five over some other banks is that it has private DIF insurance which combines with FDIC insurance to fully cover all deposits. Salem Five's overview of DIF explains DIF. Here's a useful excerpt:

Deposits at Salem Five in excess of the standard insurance amounts provided by the FDIC and the temporary full FDIC insurance coverage for noninterest-bearing transaction accounts are covered by the Depositors Insurance Fund (DIF). The DIF is a private, industry-sponsored insurance fund that insures all deposits above FDIC limits at Massachusetts-chartered savings banks. The DIF was established by the Massachusetts legislature in 1932 and has been insuring deposits since 1934. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

Bank Overview

The bank has an overall health score at DepositAccounts.com of 4 out of 5 with a Texas Ratio of 14.47% (excellent) based on September 2010 data. It's a sizable bank with $2.80 billion in assets. Please refer to our financial overview of Salem Five for more details. The bank has been a FDIC member since 1981 (FDIC Certificate # 23296).

Searching for the Best CD Rates

To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com:

• Best CD rates
• Best IRA CD rates