Update 11/19/2011: The 5-year and 3-year CD rates have fallen.
iGObanking.com has increased its 3-year and 5-year CD rates by over one percentage point. The new rates are 2.25% APY for the 5-year CD and 1.70% APY for the 3-year CD. These are also available as IRA CDs. These rates are listed in the bank's rates page as of 11/14/2011.
If you have followed iGObanking.com, you know that iGObanking.com often makes big changes on some of its CD rates. Big rate hikes will eventually be followed with big rate cuts. One example was last year when iGObanking.com's 2-year CD yield went from 1.75% to 2.25%, and then in about six weeks, it fell to 1.00%. So it's especially important not to let iGObanking CDs automatically renew. If you don't close the CD before the end of the grace period, you could be stuck with a very low rate.
When I last contacted iGObanking's customer service, I was told that 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an original maturity of one year or greater: The fee we may impose will equal six months simple interest on the amount withdrawn subject to penalty.
In July iGObanking.com updated its disclosure for the better. Before the change, the transaction limitations stated that "You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal." This was removed soon after I pointed this out in a blog post. The transaction limitation section in the disclosure now states the following as of 11/14/2011:
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.
New GiftsforBanking.com iPad CD Package
GiftsforBanking.com is part of iGObanking.com which offers CDs that include gifts. The downside is that the rates are typically lower than iGObanking.com CDs. If the gift has a value high enough and the rate is high enough, the CD can be a good deal. That's the case now with the GiftsforBanking.com's special holiday package which offers a 2.00% APY 5-year CD with an iPad, an iPod touch, a Yamaha Desktop Audio System and Bose Headphones. A minimum deposit is $25,000, and the offer is scheduled to end on 11/28/2011. Refer to the GiftsforBanking.com's promotions page for the full details. I'll have more on this special in a future post.
iGObanking.com Savings Accounts
The savings account rate had remained competitive until last August when the rate plummeted. By late October, the rate had fallen to 0.65% where it stands now. It's hard to believe the yield was 5.30% back in 2006.
My previous iGObanking reviews:
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 25.21% (average) based on June 2011 data. It has been a FDIC member since 1943 (FDIC Certificate # 16049).
How These CD Rates Compare
iGObanking.com's 5-year CD rate matches US Bank's 59-month CD special with a 2.25% APY. That's the highest 5-year bank CD rate that's nationally available. I give iGObanking the advantage over US Bank due to its more friendly early withdrawal penalty. iGObanking.com's 3-year CD rate also exceeds the next best nationally available 3-year bank CD rate. That's 1.65% APY at Doral Bank Direct.
Higher rates are available at all-access credit unions. The best are 2.83% APY for a 5-year term and 2.12% APY for a 3-year term at Velocity Credit Union.
These rates are accurate as of 11/14/2011.
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.