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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

Featured 2-Year CD Rates

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Featured Accounts
DETAILSINSTITUTIONAPYMINMAXPRODUCT
iGObanking0.35%$1k-7 Year iGOCD
iGObanking0.35%$1k-10 Year iGOCD
Accounts mentioned in this post. Rates as of July 22, 2014

New Long-Term CDs with Top Rates at iGObanking.com - Available Nationwide

POSTED ON BY

iGObanking

iGObanking.com has introduced two new CDs with competitive rates. The bank now offers terms of 7 years and 10 years. The rates are currently very competitive: 3.10% APY for 7 years and 3.50% APY for 10 years (as of 7/5/2011). As a comparison of how competitive these are, PenFed's 7-year CD has a 2.75% APY and Discover Bank's 10-year CD has a 3.00% APY.

My last review of iGObanking.com's CDs was in October when it was offering a top rate on 2-year CDs. Every now and then iGObanking comes out with a good CD deal, but you have to be careful when the CD matures. Many of the CD rates for certain maturities are not competitive. So if you let your CD automatically renew, you may get stuck with a low-rate CD. A current example is the 1-year CD which has a yield of only 0.25% APY.

Online Application

According to customer service, the CD rate is locked in at the time of the application date. Funding of the CD can be done via an ACH transfer from your current bank or by mailing a check. Several readers have complained about the online application. One commented that "signing up is a real pain -- endless questions and unforgiving software."

Early Withdrawal Penalty

The certificate of deposit details are described in the bank's disclosure page. According to this disclosure:

If your account has an original maturity of one year or greater: The fee we may impose will equal six months simple interest on the amount withdrawn subject to penalty.

However, the disclosure does give them the right to refuse an early withdrawal of principal: (see 7/9 update below)

You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.

That stipulation is worrisome especially for long-term CDs.

Update 7/9/2011: iGObanking.com has removed the sentence from their online disclosure which states they have the right to refuse an early withdrawal of principal. After readers notified me of this change, I found the old version of the online disclosure on Google's cache. Below is an excerpt from the online disclosure that Google copied on June 30, 2011:

Transaction Limitations:

You may not make deposits into your account before maturity. You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal. You can only withdraw interest credited to your account before maturity without penalty. You can withdraw interest anytime during the term of the certificate of deposit after it is credited to your account. IRS rules and regulations apply to all Individual Retirement Accounts.

Below is the same paragraph from new online disclosure:

Transaction Limitations:

You may not make deposits into your account before maturity. You can only withdraw interest credited to your account before maturity without penalty. You can withdraw interest anytime during the term of the certificate of deposit after it is credited to your account. IRS rules and regulations apply to all Individual Retirement Accounts.

Note that the sentence which contains "only if we agree" has been removed.

iGObanking.com Savings and Checking Accounts

The bank has done a fair job at keeping its savings account rates competitive, but the rates haven't been near the internet savings account rate leaders in quite a while. Its current rate is 1.01% APY on any balance.

My previous iGObanking reviews:

iGObanking.com Overview

iGObanking.com is a division of Flushing Savings Bank, FSB, a New York bank with $4.32 billion in assets and 15 branches. The bank's overall health score at DepositAccounts.com is 4 stars (out of 5) with a Texas Ratio of 29.50% (average) based on March 2011 data. It has been a FDIC member since 1943 (FDIC Certificate # 16049).

Best CD Rates Nationwide and in Your State

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. Make sure to note the bar above the rate table. It will indicate whether you are displaying accounts available nationwide or in your state. You can change this setting by selecting the "Filter Accounts" button and adjusting the setting in the Availability section.

  Tags: iGObanking, CD rates, IRA rates

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Comments
23 comments.
Comment #1 by bobert posted on
bobert
I called them to see about opening an IRA CD.  They said the 7 and 10 year are NOT available for IRA accounts.  They will allow IRA CD to be closed via a distribution (not a transfer) without penalty if over 59 1/2.

As to the authorization to close out a CD early, the rep told me that they may allow a partial withdrawl from CD, but any second request might be refused with the only option to be closing the account.  (basically, they indicate they will ALWAYS allow you to close, with penalty).  That's what the wording says, but the rep is indicating what their practice is concerning that language.  So, word of warning here and thanks, DEPOSITACCOUNTS for point it out.

3
Comment #2 by bobert posted on
bobert
sorry .... meant to say:

 

That's NOT what the wording says, but the rep is indicating what their practice is concerning that language.  So, word of warning here and thanks, DEPOSITACCOUNTS for point it out.

1
Comment #3 by Anonymous posted on
Anonymous
7 or 10 year rates????  I would not want to to go out that far......rates can only go up from here at some point.

4
Comment #4 by bobert posted on
bobert
correct .... but it only has a 6 month interest penalty .... can be cost effective even after 2 years when you compare rates.  See the posts on ALLY BANK comparisons, then do the same thing for these rates.

6
Comment #5 by Anonymous posted on
Anonymous
You obviously didn't read the entire article.

'However, the disclosure does give them the right to refuse an early withdrawal of principal:

You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.
That stipulation is worrisome especially for long-term CDs.

8
Comment #6 by Anonymous posted on
Anonymous
Here is reality:

 

If you should need to make a withdrawal or to close your account, and if you are willing to pay the penalty, there will be no impediment to or problem with your doing so . . . provided however that everyone else is not wanting to do the same thing at the same time.

But if a significant change in prevailing interest rates causes everyone to "rush for the exit" simultaneouly, the bank is far less likely to let you out.

8
Comment #7 by Mike posted on
Mike
There is also the possibility that rates will remain low for a long time. It is possible that 10 years from now, rates could be even lower than now... it is possible. A 10 year cd may turn out to be a mistake. Or it may turn out to be a wise move. There is not a guarantee that rates will rise before the 10 year cd matures. Could rates rise? Yes. Will they for certain? ALL the rules are changing. Assume nothing. Try many financial solutions. Do not rely on only one. But neither ridicule sound, conservative, saver principles.

5
Comment #8 by lou posted on
lou
It really doesn't matter what they tell you on the phone, the only thing that counts are the written disclosures. For me, any language allowing them to prohibit early withdrawal with penalty of your money, is a deal-breaker. The csr you spoke to probably won't be there 3 or 4 years down the road to confirm anything. See if this csr will put into wiriting the verbal representations he/she is making on the phone. I doubt it.

3
Comment #9 by Anonymous posted on
Anonymous
Mike #7,

I started to write a very similar comment earlier today but then deleted it.  I thought I would be alone thinking along those lines.  Years ago I had developed a very nice CD ladder, thanks to Ken and this site.  But just two years ago I turned down a renewal offer on one of my 60 mo maturing CDs because I thought the new "lower" interest rate of 4.80% was not good enough.  Well, I have been kicking my self ever since for thinking interest rates were sure to rise anytime soon.

The same scenario still exits today.  Interest rates could go lower.  Nothing says they will rise significantly for years to come. 

4
Comment #10 by Mike posted on
Mike
Anonymous #9

Agreed.  We don't know.  There is wisdom in recognizing the need to plan for various scenarios.  In the most simplistic way, the lack of planning for all scenarios is what has led the world to this chaotic mess.  If so many planned for everything to just be great, or like Madoff... great for them just long enough...  then they weren't ready for any real problems, if and when they came.  So here we are.

If we have learned anything, I hope at least we have learned to assume that we have no idea how things will go, so we need to plan for the worst case scenario to the best case.  Logic says if you prepare for the worst...  you'll probably make out alright in a best case outcome.

There isn't anyone who has planned everything just perfectly... so don't kick yourself to hard for passing up those cd rates.  Like you said, just pick your wiser self up, and continue to do your best.  I could list many of my errors here... but there isn't enough room.

4
Comment #11 by Bozo posted on
Bozo
I guess I should not be surprised that institutions allowing penalty-free partial withdrawals from IRA CDs after age 59 1/2 are catching on. I can only assume we have been able to avail ourselves of this "perquisite" (we old-farts) because (a) the few institutions offering it were obscure [example, I was unaware Igo offered it] and (b) they really didn't promote it. For example, back when State Farm Bank was offering really competitive IRA CD rates, I asked my local State Farm agent why State Farm Bank didn't actively promote its IRA CDs to the local retired community, given their penalty-free IRA CD partial withdrawals. She had no answer. Bottom line: it wasn't really a big issue. Nobody really knew about it, cared about it, or realized what a good deal it was (including her). I suspect this had changed (i.e., the knowledge of what a good deal it is), and demand (and potential abuse) has increased.

By abuse, I should note that State Farm's web-site always made it clear that whacking off a partial withdrawal in your IRA CD just to invest it in a higher-paying IRA CD was a "no-no". But I always assumed their bark was bigger than their bite. What you do with a partial (especially if you withhold zero in taxes) is kinda hard to track.

That having been said, I still think there is a market for "old-fart" IRA CD money, and I think the waiver of the penalty for partial withdrawals from IRA CDs is a great marketing tool. I'm surprised IGo doesn't appreciate this fact. After all, although PenFed is offering my old-fart portfolio 2.75% for a 7-yr IRA CD with partial withdrawal privileges, they're turning that around immediately into auto loans and adjustable equity loans (even fixed home loans) at a profit.

Sounds like PenFed has a plan.

Microeconomics 101.

Bozo

1
Comment #12 by Ladder Thou CDs (anonymous) posted on
Ladder Thou CDs
This a good deal as far as long term CDs go.  But never put all eggs in one basket.  Put one egg in many baskets.  In other words... best strategy is to have various different CDs at different maturities.

3
Comment #13 by Anonymous posted on
Anonymous
Has anybody opened a CD or Savings account with Igo Banking recently online ?

Curious how the process was and the ease in opening and their customer service.

Earlier posts indicate slow process and poor customer service. Has it improved ?

Thanks

1
Comment #14 by CC (anonymous) posted on
CC
I just opened an account online today to take advantage of the 10-year CD rate.  The application process online was pretty easy.  Be sure you have your driver's license at hand when you apply, because they ask for expiration date and date of issue.  I will still have to wait for three business days to complete the set up since they are doing external account verification via trial deposits (there was no other option).  Also, they required me to submit proof of current address by sending (or faxing) them a bank statement or bill.  Otherwise, the process was easy enough and reasonably quick (except for the follow-ups).  In total, I think I took 30 minutes to complete the application--probably longer than required, except that I like to make a PDF copy of all of the account agreements when I read and agree to them.  Also, I make a PDF copy of my entire application to keep for my records.

I would rather not tie up any money for 10 full years in this rate environment, but I have laddered all my CDs at various institutions, so this money should be fine sitting there for a decade.

5
Comment #15 by Anonymous posted on
Anonymous
#14 - 

Hope it works well for you....thanks for sharing. As for me, I just can't bring myself to the 10 year plan. If I went that long, I would probably opt for the 10 year UST note...no state taxes and no worries about the liquidity. Anyway, good luck...only time will tell.

2
Comment #16 by Anonymous posted on
Anonymous
When I checked the iGO website this morning, I could no longer find the language stating you could not make an early withdrawal without the bank's permission.  I know it was there because I've seen it before myself.  Could iGO have changed the language in the last few days?  Or is my eyesight failing me in my old age?

3
Comment #17 by KenBDG posted on
KenBDG
Good catch in noticing this change. It does infact look like iGObanking has removed this sentence from its disclosure. I've updated the post noting this change.

3
Comment #18 by Anonymous posted on
Anonymous
Ken - The sentence has been removed but does that then mean that an early withdrawal of principal, with penalty, can be made without having their advance consent? Perhaps their silence on the issue is purposeful so as not having to commit on the issue now, rather reserving their right of refusal to a later time or event? I can only imagine their reason(s) not to clearly state whether they, in fact, either allow or prohibit, an early withdrawal. The paragraph in question deals quite clearly with the interest earned but nary a hint as to principal. I doubt if a CSR would be of much help in this regard. 


 

3
Comment #19 by Anonymous posted on
Anonymous
The iGO Disclosures continue to say: “Withdrawals from a time account prior to maturity or prior to any notice period may be restricted and may be subject to penalty. See your notice of penalty for early withdrawal.”  Like those of every other bank, the Disclosures also say: “We may change any term of this Agreement.”

Personally, a 7 or 10 year CD would have to bear a far higher rate than iGO is offering for me to take either the financial or contractual risk involved here.  Others, however, with greater risk tolerance, may disagree with me.  

3
Comment #20 by Anon #18 (anonymous) posted on
Anon #18
I think that #14 has personally resolved the issue in a wholly reasonable manner....he(she) would obviously like to have a higher rate of return but has resolved, and arranged accordingly, to gut it out for the entire ten years, and as he(she) says, for an entire decade. For the rest of most of us, buyer beware...if you don't really feel that you would be willing to leave your money there for the full ten years, and are thinking that you would/could withdraw early, pay the penalty and reinvest, proceed with caution, extreme caution. When push comes to shove, and it will, it is not a given that you will be able to cash out early, regardless of the dropping of the wording in question or not. 

3
Comment #21 by Anonymous posted on
Anonymous
I whole heartedly agree with Anon #18 and also with #14's decision.

I, myself, am sitting right on the fence.  So it looks like I will make no move until I am certain what direction I want to take.  Times are really tough as to what direction interests are going to take and to the timing.  Unfortunately there is just as much interest rate manipulation by Bernanke as there is market manipulation by the Wall Street bankers.  Neither of which can be fully anticipated by us little guys. 

4
Comment #22 by Lisa (anonymous) posted on
Lisa
So I opened a CD online with them last Thursday. The trial deposits were done Friday and I confirmed them. Monday morning, I see that they have taken the money from my Alliant savings account. Then Monday afternoon I get a vm saying they need to talk to me about the account. I call back and the guy tells me they haven't been able to verify my account. I said that makes no sense, you've already withdrawn the money, you have my SSN, you called me on the number I gave you and I called you back. He blamed it on a 3rd party company and offered to get them on the line. Puts me on hold, comes back and says he can't reach anyone. THEN says, "You certify that this is your personal savings account?" I say yes. Done deal, I've verified the account. 

Not the sharpest tools in the shed. I'm slightly concerned the money will be sent back to me, as I haven't gotten anything in the mail yet. (You can't login online until they mail you your PIN.)

1
Comment #23 by Mike posted on
Mike
Anonymous 21, everyone is entitled to wait for rates to rise. Likewise, anyone who isn't waiting may be making a wise choice. In your post, you underline the point that interest rates are manipulated. We agree. So does bernanke. He's not keeping rates low in secrecy. He broadcasts it, explaining why. The current environment suppresses economic recovery thru political grandstanding, and monstrous regulations passed as law... that are totally blank pages. Whats bernanke supposed to do??? One party writes down an austerity plan. The other party cries and stamps its feet... but won't write down their plan... they just have more blank pages. What's bernanke supposed to do??? The nation is in the hole at least 60 TRILLION dollars. What's bernanke supposed to do??? The politicians can't figure out how to fix things now. How do you think they'll do with 35% interest rates???...u know, like Greece? Higher rates will sink us. So what do u think bernanke will do??? Rates won't rise, until the world sees us as Greece. But when that day comes... you'll not be excited about higher rates...just like Greece isn't. But... go ahead and wait.

1
Comment #24 by Mike posted on
Mike
Lisa 22, please keep us updated. That sounds strange to me, too. I think it'll work out fine, and your funding account may be able to verify where the money went. I wonder how a third party is involved and causing the issue. If u find out more details of the confusion, please fill is in. Thanks. Hope all goes well for u.

1