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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.

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Survey of the Best CD Rates for November 11, 2011

POSTED ON BY

This was another week in which most of the rate leaders on the nationwide lists held steady with their CD rates. Rates held at Alliant Credit Union, Melrose Credit Union, Digital Credit Union and Pentagon Federal Credit Union. Even Ally Bank's 5-year CD rate and its 11-month no-penalty CD rate held. Also, US Bank continues to offer its 59-month CD special with 2.25% APY. That's the best nationally available 5-year CD rate at a bank. As I described in my US Bank CD review, it's important to know the downsides of this CD such as the harsh early withdrawal penalty.

One disappointment this week was with XCEL Credit Union which made big cuts to its 4-year and 5-year CD rates. The cuts were so big that these CDs fell off my nationwide lists.

There was one bright spot for nationally available CDs. Velocity Credit Union came out with a CD special with three very competitive rates: 1.51% APY for 2 years, 2.12% APY for 3 years and 2.83% APY for 5 years. Velocity is one of the credit unions that make it easy for anyone to join via an association (see my review).

If you're shopping for CDs, it's important to be aware of potential gotchas. I reviewed these in my Thursday post 10 Gotchas to Avoid for Bank CD Investors.

Local CD Deals

In Texas, CD rates were cut again at Randolph-Brooks FCU and at SACU. I'm afraid it may not be long before these drop below 3.00%. Randolph-Brooks FCU continues to offer the highest CD rate in the nation with a 3.09% APY for a 7-year term with a $75K minimum deposit.

I added a few new banks and credit unions to the lists with short- and mid-term CDs. HomeBanc in Central Florida has a great 3-month CD special with a 1.50% APY. Harris County Credit Union in Houston has very competitive 1-year and 2-year Jumbo CD rates. I added another Iowa credit union, Veridian Credit Union, that beats Iowa Community FCU for a 2-year term.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest EWP, it's still a good deal when closed early even with the recent rate cuts.

Since Velocity's early withdrawal penalty is only 6 months of interest, this makes Velocity's 5-year special CD a very good deal for short terms. Ally Bank's 1.89% 5-year CD is still the best deal for 6 and 12 months. However, Velocity's 2.83% APY 5-year CD becomes a better deal when it's closed after 12 months.

As we learned last month, there is some risk that the bank or credit union may increase the early withdrawal penalty on existing CDs (see my post on a credit union that was allowed to raise the EWP on existing CDs).

Another risk is that the institution will make use of a clause in its disclosure to disallow an early withdrawal request. That's another downside with US Bank. According to its disclosure, a "withdrawal prior to maturity will be permitted only with the consent of the bank which may only be given at the time of withdrawal." I have more details in my post Risks and Benefits of Long-Term 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 most 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 November 11, 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.

  Tags: CD rates

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Comments
5 comments.
Comment #1 by Bozo posted on
Bozo
Alliant's 2-year still seems to be the best "no gotchas". It's not much better than mattress money, however, what is these days?

1
Comment #2 by shinoby posted on
shinoby
These rates are very low.  I wonder how much longer such low rates will endure.

Working in favor of continuing low rates is this:

If (when) rates ascend, the USA is gonna be in a world of hurt, given our extraordinary debt.  Interest rate normalization might or might not bring us down.  But normalization will surely slow our already pathetic rate of growth.

1
Comment #3 by Anonymous posted on
Anonymous
Doral Bank in New York (doralbankNY.com) has 1.30% on a 12-month CD, 1.60% for 36- month. No checking account required.

1
Comment #4 by Anonymous posted on
Anonymous
Homebanc in Florida wil accept deposits only from Orlando area residents. The customer service representsatsive says that the bank is trying to cultivate relationships and wants to grow their customer base in the Orlando area.

1
Comment #5 by gballing posted on
gballing
Any thoughts about the various "Raise Your Rates" CDs? For example Ally offers a 4 yr Raise Your Rate that currently pays 1.65% which is low for 4 yrs but offers a chance to increase the rate twice in that time.

1