Dedicated to Deposits: Deals, Data, and Discussion

Competitive 5-Year CD Rate Special at Sovereign Bank - Available Natiowide

POSTED ON BY

Santander Bank, N.A

Sovereign Bank is offering two special CDs. The one with the most competitive rate is the 5-year CD which has a 3.00% APY. The other one is a 1.25% APY 18-month CD. Both have a minimum deposit of $500. The 5-year CD special is listed on the bank's front page and in this bank's promotion page as of 2/10/2011. The 18-month CD special is listed on the bank's CD page.

Sovereign Bank CD Details

Update 2/12/11: Readers have informed me that they've been told that the CD is available nationwide. I called Sovereign again using the number listed in the application (877-860-9753). The CSR checked with her supervisor and confirmed that their new policy is to allow anyone in the nation to open CDs. Checking and savings accounts continue to be limited to their market area.

Regarding the early withdrawal penalty, this CSR repeated what I was told on Thursday. For a 5-year CD, the penalty is 12 months of interest. I asked if they had an account disclosure available online or if they could email me a copy. She could not provide one, and she said I would receive one in the mail after the application. As one reader mentioned in the comments, it's hard to believe they assume customers don't need to read this before opening the CD.

If you don't live near a branch, applying by phone appears like it would be easier and quicker than applying online. According to the CSR, they call you after you apply online to confirm your information. The rate should lock at the time of the application.

This ends the 2/12/11 update.

I called Sovereign (877-768-2265) for more details on these CDs. According to the CSR, accounts are limited to customers in their market area (includes much of the Northeast). I was told the early withdrawal penalty for the 5-year CD is 1-year of interest (I couldn't find the disclosure online). There's an online application, and I was told you can fund the CD with an ACH transfer which should allow you to receive the CD rate at the time you submit the application. When the CD matures, they don't have a lot of options to receive the funds. Neither ACH nor wire transfer is an option. In addition to having the check mailed, you can have them transfer the funds into your Sovereign liquid account or you can receive a check at a branch.

How It Compares

This 5-year CD special compares very favorably to 5-year CDs available nationwide. As of 2/10/2011, the best nationwide 5-year CD rate is 3.00% APY at Connexus Credit Union (requires an active checking). The best rate at a bank is 2.75% APY at Salem Five Bank.

Triple Your Interest Savings

Sovereign Bank offers a special savings account called Triple Your Interest Savings. As you might expect, the rates are low compared to internet savings accounts, but if you get the triple-rate feature, it's not bad for brick-and-mortar banks. To get the triple rate, it requires that you had automatic transfers of $100 or more for the previous month. The automatic transfers have to be from a Sovereign Checking account. When you meet this, the interest rate is 0.90% APY. The automatic transfers also prevent a monthly maintenance fee.

The bank doesn't offer free checking accounts for non-student accounts. The best one is the Sovereign Classic Banking which requires a minimum balance of $500 to avoid a $5 monthly fee.

Sovereign Bank Overview

Branches are located in the Northeast in the states of Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island.

Sovereign Bank is the 25th largest bank in the nation. It's part of the Spanish bank holding company, Banco Santander, S.A. Sovereign Bank has $72 billion in assets and $41 billion in deposits. It has an overall health score at DepositAccounts.com of 4 out of 5 with a Texas Ratio of 15.71% (excellent) based on September 2010 data. Please refer to our financial overview of Sovereign Bank for more details. The bank has been a FDIC member since 1938 (FDIC Certificate # 29950).

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.


  Tags: Santander Bank, N.A, CD rates, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island

Related Posts

Comments
11 Comments.
Comment #1 by Anonymous posted on
Anonymous
ROMA Bank in NJ is also offering a 5 year CD at 3.00% APY.  There are geographic limitatiions, however.

3
Comment #2 by Anonymous posted on
Anonymous
is this market ever going to come back ! so hard to ivest in something solid and keep your initial investment safe . looking for sound advice , please comment . thank you.

2
Comment #3 by Anonymous posted on
Anonymous
Don't deal with this bank. They have large amount of fees on every little thing. Stay away from this bank unless you love problems with banks and don't mind calling to yell them.

3
Comment #4 by scottj posted on
scottj
Fees are for people who don't know what they are doing and help us that do get better rates. People that come here do not pay fees. I have done a few of these decent rate Soverign CD's and never paid any

7
Comment #5 by anne l (anonymous) posted on
anne l
i've had cds at this bank and no problems ...by the way early withdrawal penalty for 5yr cd is 6 months  ..minimum deposit too is $500 which is good if you are opening accts for minors or young high school or college kids that work and want to start building savings or ira accts... 

3
Comment #6 by Anonymous posted on
Anonymous
I contacted the bank via the number provided and ended up with a "Product Specialist" who could hardly answer any of my CD questions. They could not readily provide any CD Disclosue info other than it is not available via their web site and nobody usually asks for it before opening a CD !!

I was able to get a one page CD enclosure that states the early withdrawal penalty is a) 3 months of interest on the amount withdrawn if the term of your CD is one year or less, b) 6 months if term is more than one but less than 5 years, c) one years interest for all other CD's.

Most disturbing is the opening preamble that says: You may make withdrawals of principal from your account before the maturity date of your CD only if we agree to permit you to make the withdrawal. If we permit you to make the withdrawal, we will impose and early withdrawal penalty of ...............

3
Comment #7 by Jennie (anonymous) posted on
Jennie
I just spoke with a rep from Sovereign and he said that there was no permission needed to make an early withdrawl, however you have the disclosure in hand and therefore I believe you and what you are reading from the disclosure. I wonder if there is a distinction made between the entire CD amount and a partial withdrawl. Probably not.

I have a financial calculator and could plug the numbers in if the interest rates go up and determine at which point I should break the CD.  I live on my interest so I am very serious about trying to  get the best return and it is a problem as you know.

2
Comment #8 by Anonymous posted on
Anonymous
FYI: I walked into my local branch on Friday and opened this CD.  I was handed a sheet of information as part of my "CD package" that clearly stated that ANY CD over one year would have an early withdrawal penalty of only six months.  There was no mention of a 12 month penalty for a 5 year CD and I questioned the Rep on this as well. Further I was also told that if I closed the CD early but put the proceeds into another Sovereign product the penalty would be WAIVED.  I did not see that in writing anywhere but this is what the Rep (emphatically I might add...) told me.  I will likely be opening another CD soon so if I find out anything more I'll update again.



 

1
Comment #9 by scottj posted on
scottj
Just opened account in MA and have disclosure sheet in front of me which solves the different penalty mystery.

They have different ones for different regions,

NY/NJ which includes PA where online accounts would be opened through are loss of one years interest on 5 year or greater CDs

New England Markets are loss of 6 month interest on 5 year or greater CD.

4
Comment #10 by Anonymous posted on
Anonymous
ON jumbo 5 year CD's the penalty is 3 months.  See link attached.  https://customerservice.sovereignbank.com/app/answers/detail/a_id/3057/~/what-are-the-early-withdrawal-penalty-fees-on-cds%3F

1
Comment #11 by Anonymous posted on
Anonymous
It is about time to update the info. 

1