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Survey of the Best CD Rates for August 12, 2011

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The number of CD rate cuts have gone up this week after the Fed issued their mid-2013 pledge. The largest rate cut came from iGObanking which slashed its 10-year CD APY from 3.25% to 2.00%. Ally Bank also cut its CD rates. Unlike iGObanking, Ally Bank only makes small rate cuts. However, these small rate cuts have been so frequent that they are adding up. Ally cut its 5-year CD APY from 2.30% to 2.27% on Wednesday, and the APY fell again this morning to 2.26%.

Other past rate leaders that made cuts this week are airbanking, Melrose Credit Union and Fort Knox Federal Credit Union. Melrose cut all of its CD rates by 25 basis points.

However, not all of the rate leaders have cut their CD rates, at least not as of this Friday morning. These include Incredible Bank, Dime Savings Bank, Alliant Credit Union and Connexus Credit Union.

I replaced iGObanking's 3.25% 10-year CD with Discover Bank's 3.00% 10-year CD. Discover Bank has long offered this 3.00% APY, and according to a CSR it should last at least through today. Its early withdrawal penalty (EWP) is 9 months of interest which isn't as good as iGObanking, but it's better than the EWPs of 7-year and 10-year CDs of many other banks and credit unions. Most have an EWP of at least 12 months interest.

Because of Discover Bank's 3.00% APY and its reasonable 9-month EWP, I included it with Ally Bank's 5-year CD in the shorter terms. I also included University Federal Credit Union's 2.83% APY 5-year web CD in the shorter terms. It also has a competitive rate combined with a reasonable EWP (up to 6 months of interest). The yields listed for the shorter terms take into account the early withdrawal penalties.

Based on this early-withdrawal long-term CD strategy, Ally Bank still has the best deal if the CD is closed after 1 year or 18 months. From 2 to 4 years, University FCU's 5-year CD is on top.

It's important to note that there are some risks with this long-term CD strategy. If rates shoot up, you could be stuck in the low-rate CD until it matures. I have more discussion of these risks in my post on the risks and benefits of long-term CDs. Even though I've received some assurances that the early withdrawal penalties won't be increased on existing CDs, I can't guarantee it won't happen.

It's also important to remember that there's a risk that this awful interest rate environment will continue for many years. Long-term CDs have an advantage for that risk.

Local CD Rate Changes

There were also many cuts on local CD rates. Some of the banks and credit unions which cut rates this week include Signature Bank, Institution for Savings, BOK Financial Banks, Police & Fire FCU and Randolph-Brooks FCU.

On a positive note, there was one credit union that actually increased its CD rates. It's El Paso Area Teachers FCU, and its 5-year CD APY increased from 3.44% to 3.55% APY for a minimum deposit of $50K. Unfortunately, membership into this credit union is primarily limited to those who live or work in El Paso County in Texas.

I did add two banks to my list. The first is Paradise Bank in Southeast Florida which offers a competitive 3-year CD rate. The second addition is Beacon Federal Bank which is offering special 11-month and 17-month CDs.

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. The Friday blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The Friday blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but many of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available for an entire state.

Yields Accurate as of Aug 12, 2011

Under 1-Year CD Rates

  • Noteworthy Local Deals

1-Year CD Rates

  • Noteworthy Local Deals

18-month CD Rates

  • Noteworthy Local Deals

2-Year CD Rates

  • Noteworthy Local Deals

3-Year CD Rates

  • Noteworthy Local Deals

4-Year CD Rates

  • Noteworthy Local Deals

5-Year CD Rates

  • Noteworthy Local Deals

Over 5-Year CD Rates

  • Noteworthy Local Deals

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

Edit 3:35pm: Added Apple FCU's 10yr CD.

  Tags: CD rates

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Comments
5 comments.
Comment #1 by no stocks 4 me (anonymous) posted on
no stocks 4 me
Re post, thought this topic was a better place for it.

the only option I had was to go with BB&T, they had a 30 month CD at 1.2% (rate and yield) I took that deal only because it has this deal where you can close it in 12 months without any penalty, so its kinda like a 1 year 1.2% CD, also if rates are still in suck mode, you can leave it alone, and when you decide to close it its your call, only thing is when and if I close it I need to pull all fnds out, as anything left after the initial withdrawal would than be under the 6mo withdrawal penalty. but hy its one way to go.

I'll end up going through this drill again in Oct as a ****ed good 6%'er comes due, already have my cryin towel, smirks. I'm so fkn tired of this idiot Bernak, that I can't even bother to listen or follow him anymore

2
Comment #2 by Anonymous posted on
Anonymous
Bernake, don't get me started. He and the FOMC are doing everyting they can to support the stock market. The people that have the money to spend are the ones that know how to save and they are the ones getting ****ed with these rates.

He just doesn't get it. What good are lower rates if you hourse is under water or you don't have a job and can't afford a house? He is text book only and is out of touch withe the real world.

6
Comment #3 by Anonymous posted on
Anonymous
My husbandcs IRA CD' matured at a rate of 5% .  We called a MetLife Rep and bought a variable Annunity with a rider that gurantees a alifetime income with a 6% rate.

1
Comment #5 by Its Me (anonymous) posted on
Its Me
MainStreet Bank, which has four branches in northern Virginia and sells CDs nationwide through its airbanking.com website, is paying 1.50% APY with a $500 minimum deposit. (You'll have to click your way through the application process for an "airsavings" savings account to find the CD rates.)

1