Survey of the Best CD Rates for August 26, 2011

CD rates continue to trend downward as the ramifications of the Fed's mid-2013 pledge continue.

It seems like every other day Ally Bank is making small rate cuts. The 5-year CD APY just fell from 2.20% to 2.19% and the 11-month No-Penalty CD APY fell from 1.10% to 1.08%.

A few credit unions that make it easy to join also reduced rates this week. Self-Help Credit Union slashed most of its CD rates. Its rates are no longer near the top for any of the CD terms. Apple Federal Credit Union's 10-year CD APY fell from 3.50% to 3.20%.

We may see more credit union rate cuts next week since a new month is starting. Many credit unions make most of their rate changes at the start of each month. So if you were thinking about opening a CD, it would be a good idea to apply early next week.

The highest 5-year CD rate that's nationally available continues to be 2.83% APY at University Federal Credit Union. It's a web CD that must be opened online. For more info on UFCU and membership eligibility, please refer to my UFCU CD review.

Ten years is a very long time, but that's now required if you want a 3.00% APY. Discover Bank is still offering a 3.00% APY 10-year CD and IRA CD, and its early withdrawal penalty is 9 months of interest. Don't forget you can get an extra 5 basis points if you're a AAA member. This week I compared Discover's 10-year CD with Ally's 5-year CD and did another review of the risks of these CDs in my post, Long-Term CD Strategy Review.

Local CD Rate Changes

There were also several rate cuts on local CD rates. It wasn't a CD, but it was just as good. Capital One Bank in the Austin metro area had been offering a 1.50% APY guaranteed for 12 months on its High Interest Free Checking Account. Since the rate was guaranteed for 12 months, it was better than a 1.50% liquid 12-month CD. Recently, this promo rate had fallen to 1.30% APY, and just this week it has fallen to 1.01% APY. It now matches Capital One's nationwide checking accout offer.

Another noteworthy rate cut was at Police and Fire Federal Credit Union (PFFCU) in Philadelphia. Its 5-year CD rate had held steady at 3.00% APY since last year. That changed this month when the rate started to fall. It's now 2.25% APY.

If you want some insights into how banks and credit unions decide on their deposit rates, PFFCU provided a good explanation early this year. Based on their explanation and the current Treasury yields, their new lower CD rates are to be expected. Here's an important excerpt from PFFCU's explanation:

We made investments in 2008 and 2009 that are earning 4%. As these investments mature in 2010 and 2011, we must re-invest this money in the same safe investments discussed above that are only earning 0.25% to 1.0%. Our deposit rates have to reflect what PFFCU can earn on its investment portfolio so that PFFCU remains financially sound.

Since yields on safe investments like Treasuries haven't gone up any since the start of the year (they have actually fallen), I'm afraid we will likely see more rate cuts.

I just added two banks to my list this week.

One is Marathon National Bank in the New York City metro area. It's offering a special 7-month liquid CD with a very competitive 1.35% APY.

The other addition is a 3-year CD from Broward Bank of Commerce in South Florida. The rate exceeds the best 3-year nationally available CD from a bank by 2 basis points. In Florida where competitive deposit rates are rare, that's a good deal.

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 in large areas of a state.

Yields Accurate as of Aug 26, 2011

Under 1-Year CD Rates

• Ally Bank - 1.45% (2.19% 5-year CD closed after 6 months, see review & risks)
• Connexus Credit Union - 1.25% 6-month CD with active checking account
• Ally Bank - 1.08% 11-month No-Penalty CD
• AloStar Bank - 1.05% 6-month CD

• Noteworthy Local Deals

• Five Star Bank - 2.05% 7-11 month CD, req chk (Rochester, NY)
• Marathon National Bank - 1.35% 7-year Liquid CD (New York City)
• Alma Bank - 1.35% 12-month Liquid CD (New York City)
• Industrial Credit Union - 1.30% 6-month CD (Boston metro area)
• Community Bank of Tri-County - 1.30% 4-month CD (Southern Maryland)
• HAPO Community Credit Union - 1.25% 6-month CD (WA State)
• First Choice Bank - 1.25% ($50K) 1.20% ($2.5K) 288-day CD (Los Angeles & Orange County, CA)
• Washington Federal Bank for Savings - 1.15% 9-month CD (Chicago)

1-Year CD Rates

• Ally Bank - 1.82% (2.19% 5-year CD closed after 1 year, see review & risks)
• Connexus Credit Union - 1.50% 12-month CD with active checking account
• Alliant Credit Union - 1.30% ($25K min) 1-year CD
• AloStar Bank - 1.27% 1-year CD

• Noteworthy Local Deals

• El Paso Area Teachers Federal Credit Union - 1.61% ($50K) 1.51% ($500) 1-year CD (El Paso, TX)
• NavyArmy Federal Credit Union - 1.60% ($100K) 1.50% ($1K) 12-month CD (Corpus Christi, TX metro)
• Credit Union of Atlanta - 1.53% 12-month CD (parts of Atlanta, Georgia)
• Chasewood Bank - 1.51% ($100K) 1.41% ($1K) 1-year CD (Houston)
• Industrial Credit Union - 1.50% 12-month CD (Boston metro area)
• Alma Bank - 1.35% 12-month Liquid CD (New York City)
• First Choice Bank - 1.35% ($50K) 1.30% ($2.5K) 366-day CD (Los Angeles & Orange County, CA)
• HAPO Community Credit Union - 1.35% 12-month CD (WA State)

18-month CD Rates

• Ally Bank - 1.94% (2.19% 5-year CD closed after 18 months, see review & risks)
• University Federal Credit Union - 1.88% (2.83% 5-year CD closed after 18 months, see risks)
• Alliant Credit Union - 1.55% ($25K min) 18-month CD
• Discover Bank - 1.49% (3.00% 10-year CD closed after 18 months, see risks)
• CNB Bank Direct - 1.35% ($25K min) 18-month CD

• Noteworthy Local Deals

• Focus Bank - 1.61% 19-month CD (online application for MO, AR, KY, TN & parts of IL)
• First Choice Bank - 1.60% ($50K) 1.50% ($2.5K) 541-day CD (Los Angeles & Orange County, CA)
• Alaska USA Federal Credit Union - 1.60% ($100K) 1.40% ($10K) 18-month CD (San Bernardino County, CA; parts of WA & AK)
• Signature Bank - 1.51% 18-month CD (NYC Metro)
• Chasewood Bank - 1.51% ($100K) 1.41% ($1K) 18-month CD (Houston)
• Industrial Credit Union - 1.50% 18-month CD (Boston metro area)

2-Year CD Rates

• University Federal Credit Union - 2.12% (2.83% 5-year CD closed after 2 years, see risks)
• Ally Bank - 2.01% (2.19% 5-year CD closed after 2 years, see review & risks)
• Discover Bank - 1.86% (3.00% 10-year CD closed after 2 years, see risks)
• airbanking (MainStreet) - 1.50% 2-year CD
• CNB Bank Direct - 1.50% ($25K min) 2-year CD

• Noteworthy Local Deals

• University of Iowa Community Credit Union - 2.00% ($250K) 1.90% ($100K) 1.80% ($1K) 25-month CD (several parts of Iowa)
• NavyArmy Federal Credit Union - 2.00% ($100K) 1.85% ($1K) 2-year CD (Corpus Christi, TX metro)
• El Paso Area Teachers Federal Credit Union - 1.96% ($50K) 1.86% ($500) 2-year CD (El Paso, TX)
• Chasewood Bank - 1.91% ($100K) 1.76% ($1K) 2-year CD (Houston)
• Wings Financial Credit Union - 1.81% 2-year CD (Seattle & Minneapolis Metro areas)
• Signature Bank - 1.76% 2-year CD (NYC Metro)
• Alaska USA Federal Credit Union - 1.75% ($100K) 1.55% ($10K) 2-year CD (San Bernardino County, CA; parts of WA & AK)
• Community Bank of Tri-County - 1.65% 2-year CD (Southern Maryland)
• Industrial Credit Union - 1.65% 2-year CD (Boston metro area)

3-Year CD Rates

• University Federal Credit Union - 2.35% (2.83% 5-year CD closed after 3 years, see risks)
• Discover Bank - 2.24% (3.00% 10-year CD closed after 3 years, see risks)
• Ally Bank - 2.07% (2.19% 5-year CD closed after 3 years, see review & risks)
• University Federal Credit Union - 2.08% 3-year web CD
• airbanking (MainStreet) - 1.90% 3-year CD

• Noteworthy Local Deals

• El Paso Area Teachers Federal Credit Union - 2.83% ($50K) 2.73% ($500) 30-month & 3-year CD (El Paso, TX)
• Credit Union of Atlanta - 2.52% 3-year CD (parts of Atlanta, Georgia)
• University of Iowa Community Credit Union - 2.35% ($250K) 2.25% ($100K) 2.15% ($1K) 37-month CD (several parts of Iowa)
• Atlas Bank - 2.33% 3-year CD (New York City)
• Signature Bank - 2.27% 3-year CD (NYC Metro)
• Security Service Federal Credit Union - 2.15% ($100K) 2.00% ($500) 3-year CD (parts of Texas & Colorado)
• Community Bank of Tri-County - 2.10% 3-year CD (Southern Maryland)
• Alaska USA Federal Credit Union - 2.10% ($100K) 2.00% ($10K) 3-year CD (San Bernardino County, CA; parts of WA & AK)
• HAPO Community Credit Union - 2.10% 3-year CD (WA State)
• Wings Financial Credit Union - 2.07% 3-year CD (Seattle & Minneapolis Metro areas)
• John Marshall Bank - 2.02% 3-year CD (Washington DC Metro)
• Broward Bank of Commerce - 1.92% 3-year CD (South Florida)

4-Year CD Rates

• University Federal Credit Union - 2.47% (2.83% 5-year CD closed after 4 years, see risks)
• Alliant Credit Union - 2.45% ($25K min) 4-year CD
• Discover Bank - 2.43% (3.00% 10-year CD closed after 4 years, see risks)
• airbanking (MainStreet) - 2.40% 4-year CD

• Noteworthy Local Deals

• El Paso Area Teachers Federal Credit Union - 2.83% ($50K) 2.73% ($500) 4-year CD (El Paso, TX)
• University of Iowa Community Credit Union - 2.70% ($250K) 2.60% ($100K) 2.50% ($1K) 49-month CD (several parts of Iowa)
• John Marshall Bank - 2.48% 4-year CD (Washington DC Metro)
• Industrial Credit Union - 2.40% 4-year CD (Boston metro area)

5-Year CD Rates

• University Federal Credit Union - 2.83% 5-year web CD
• Discover Bank - 2.54% (3.00% 10-year CD closed after 5 years, see risks)
• airbanking (MainStreet) - 2.50% 5-year CD

• Noteworthy Local Deals

• El Paso Area Teachers Federal Credit Union - 3.55% ($50K) 3.44% ($500) 5-year CD (El Paso, TX)
• Texas Dow Employees Credit Union - 3.25% ($100K) 3.00% ($1K) 5-year CD (in parts of Houston metro)
• Security Service Federal Credit Union - 3.00% ($100K) 2.85% ($500) 5-year CD (parts of Texas & Colorado)
• John Marshall Bank - 2.94% 5-year CD (Washington DC Metro)
• TruService Community Credit Union - 2.93% 5-year CD (Little Rock metro area of AR)
• Credit Union of Atlanta - 2.78% 5-year CD (parts of Atlanta, Georgia)
• Coastline Federal Credit Union - 2.75% ($75K) 5-year CD (Jacksonville Florida)
• Alaska USA Federal Credit Union - 2.75% ($100K) 2.65% ($10K) 5-year CD (San Bernardino County, CA; parts of WA & AK)
• Wings Financial Credit Union - 2.73% 5-year CD (Seattle & Minneapolis Metro areas)
• Industrial Credit Union - 2.65% 5-year CD (Boston metro area)

Over 5-Year CD Rates

• Apple Federal Credit Union - 3.20% 10-year CD
• Discover Bank - 3.00% 10-year CD (3.05% AAA members)
• Navy Federal Credit Union - 3.00% ($20K) 7-year CD (membership restrictions)

• Noteworthy Local Deals

• SACU - 3.85% ($90K) 3.80% ($10K) 10-year (San Antonio, TX)
• Security Service Federal Credit Union - 3.50% ($100K) 3.35% ($500) 7-year CD (parts of Texas & Colorado)
• Randolph-Brooks Federal Credit Union - 3.40% ($75K) 3.35% ($20K) 7-year CD (San Antonio & Austin, TX)
• SACU - 3.30% ($100K) 3.25% ($10K) 7-year (San Antonio, TX)
• Teachers Credit Union - 3.05% 71-month CD (parts of Indiana)
• First Federal - 3.00% ($100K) 8-year CD (Southeast MS)
• Third Federal - 2.50% 6-year CD (in SE & SW Florida, Ohio)

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

Tags: CD rates