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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 December 16, 2011

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Survey of the Best CD Rates for December 16, 2011

Exactly three years ago the Fed slashed the federal funds rate to near zero. That policy was continued once again on Tuesday at the Fed's last FOMC meeting of 2011. At least the Fed didn't add any more policy accommodation to further drive down long-term rates. But that didn't stop banks from cutting deposit rates this week.

A few of the nationally available CD rate leaders cut their rates. Atlantic Coast Bank ended its 1.00% 7-month CD special which had been one of the best short-term CD deals. For the long-term deals, Airbanking (the internet division of MainStreet Bank) cut its rates by 25 basis points which took them off the list for a top 4-year and 5-year CD. Velocity Credit Union reduced its 5-year CD yield from 2.32% to 2.12%.

There are some newcomers on the nationally available CD list. North American Savings Bank has a 13-month CD special with a 1.25% APY. It falls under Digital Credit Union's 1.36% APY 12-month CD rate that requires a relationship and a $25K minimum deposit. It exceeds the 1.15% APY of CIT Bank, Melrose Credit Union and Doral Bank Direct.

I replaced Airbanking's 4-year CD (its APY fell from 2% to 1.75%) with Nationwide Bank's 4-year CD which has a top APY of 1.85%. That's now the top 4-year CD at a bank. Digital Credit Union and Melrose Credit Union keep the top spots for the best 4-year CD rates.

For the 5-year term, I replaced Airbanking (its APY fell from 2.15% to 1.90%) with Quaint Oak Bank's 2.20% APY 5-year CD. US Bank still has its special 59-month CD with a 2.25% APY. Just like the 4-year term, Digital Credit Union and Melrose Credit Union keep the top spots.

Local CD Deals

One credit union fell out of the 3% club this week. El Paso Employees Federal Credit Union cut its 5-year CD APY from 3.03% to 2.78%. However, another El Paso credit union is still a 3% club member. El Paso Area Teachers FCU offers a 3.08% APY 5-year CD with a $50K minimum. Both credit unions allow anyone who lives or works in El Paso County in Texas to join.

The other two credit unions in the 3% club kept their rates unchanged this week. NavyArmy FCU in Southeast Texas continues to offer a 3.00% APY 30-month CD, and San Antonio Credit Union continues to offer a 3.30% APY 10-year CD.

There are a few other small banks and credit unions in the nation with higher rates, but they didn't make my list since they're not available to enough people. You can see if you're lucky with one of these banks or credit unions in your area by using our rate table. Make sure it shows rates from your state by using the "Filter Accounts" button at the top of the table.

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 penalty, it's still a good deal when closed early even with the recent rate cuts.

Since the early withdrawal penalty of Digital Credit Union is only 6 months of interest, this makes its 5-year CD a good deal for short terms. Ally Bank's 1.84% 5-year CD is still the best deal for 6 and 12 months. However, Digital's 2.61% APY 5-year CD (2.86% with relationship checking) becomes a better deal when it's closed at 18 months or later.

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).

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. This CD survey 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 CD survey 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 December 16, 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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