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

• Ally Bank - 1.22% (1.84% 5-year CD closed after 6 months, see review & risks)
• Digital Credit Union - 1.20% ($25K min w/relationship) 0.95% (no relationship) 6-month add-on CD
Ally Bank - 0.95% 11-month No-Penalty CD, see account review
• Virtual Bank - 0.85% 6-month CD

• Noteworthy Local Deals

• Alma Bank - 1.35% 12-month Liquid CD requires active chk (New York City)
• University of Iowa Community Credit Union - 1.30% ($250K) 1.20% ($100K) 1.10% ($1K) 10-month CD (several parts of Iowa)
• Chartway Federal Credit Union - 1.25% ($100K) 1.00% ($5K) 7-month CD (parts of VA, FL, RI & TX)
• Veridian Credit Union - 1.20% ($100K) 1.00% ($1K) 7-month CD (several parts of Iowa)
• First Choice Bank - 1.05% ($50K) 1.00% ($2.5K) 288-day CD (Los Angeles & Orange County, CA)
• Industrial Credit Union - 1.00% 6-month CD (Boston metro area)
• 1st Commonwealth Bank of Virginia - 1.00% 3-month CD special (Washington DC metro)

1-Year CD Rates

• Ally Bank - 1.53% (1.84% 5-year CD closed after 1 year, see review & risks)
• Digital Credit Union - 1.36% ($25K min w/relationship) 1.11% (no relationship) 1-year add-on CD
• Digital Credit Union - 1.30% (2.61% 5-year CD closed after 1 year, see risks)
• North American Savings Bank - 1.25% 13-month CD
• CIT Bank - 1.15% ($25K min) add-on & bump-up 1-year CD
• Melrose Credit Union - 1.15% 1-year CD
• Doral Bank Direct - 1.15% 1-year CD

• Noteworthy Local Deals

• 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)
• General Electric Credit Union - 1.42% ($100K) 1-year CD (Cincinnati OH metro)
• El Paso Area Teachers FCU - 1.36% ($50K) 1.26% ($500) 1-year CD (El Paso, TX)
• Alma Bank - 1.35% 12-month Liquid CD requires active chk (New York City)
• University of Iowa Community Credit Union - 1.35% ($250K) 1.25% ($100K) 1.15% ($1K) 13-month CD (several parts of Iowa)
• Harris County Credit Union - 1.31% ($95K) 1-year CD (Houston)
• First American Credit Union - 1.26% ($50K) 1-year CD (south of Phoenix, AZ)
• Alaska USA Federal Credit Union - 1.25% ($100K) 1.15% ($10K) 1-year CD (San Bernardino County, CA; parts of WA & AK)
• LOMTO Federal Credit Union - 1.20% 1-year CD (parts of New York City)
• First Choice Bank - 1.15% ($50K) 1.10% ($2.5K) 366-day CD (Los Angeles & Orange County, CA)

18-month CD Rates

• Digital Credit Union - 1.73% (2.61% 5-year CD closed after 18 months, see risks)
• Ally Bank - 1.63% (1.84% 5-year CD closed after 18 months, see review & risks)
• Alliant Credit Union - 1.35% ($25K min) 18-month CD
• Incredible Bank - 1.20% 19-month CD

• Noteworthy Local Deals

• Alaska USA Federal Credit Union - 1.60% ($100K) 1.40% ($10K) 18-month CD (San Bernardino County, CA; parts of WA & AK)
• El Paso Area Teachers FCU - 1.51% ($50K) 1.41% ($500) 18-month CD (El Paso, TX)
• Civic Bank & Trust - 1.50% Add-On 18-month CD (Nashville, TN)
• Cross River Bank - 1.50% 18-month CD (NJ in NYC metro area)
• Veridian Credit Union - 1.50% ($100K) 1.30% ($1K) 15-month CD (several parts of Iowa)
• Department of Commerce FCU - 1.45% 18-month CD (Washington DC)
• Focus Bank - 1.31% 19-month CD (online application for MO, AR, KY, TN & parts of IL)
• First Choice Bank - 1.30% ($50K) 1.25% ($2.5K) 541-day CD (Los Angeles & Orange County, CA)
• Montauk Credit Union - 1.25% 18-month CD (New York City)

2-Year CD Rates

• Digital Credit Union - 1.95% (2.61% 5-year CD closed after 2 years, see risks)
• Ally Bank - 1.69% (1.84% 5-year CD closed after 2 years, see review & risks)
• Alliant Credit Union - 1.50% ($25K min) 2-year CD
• CIT Bank - 1.32% ($100K) 1.30% ($1K) 2-year CD

• Noteworthy Local Deals

• NavyArmy Federal Credit Union - 2.00% ($100K) 1.85% ($1K) 2-year CD (Corpus Christi, TX metro)
• Veridian Credit Union - 1.90% ($100K) 1.70% ($1K) 25-month CD (several parts of Iowa)
• HEW Federal Credit Union - 1.75% 2-year CD (Washington DC metro)
• Alaska USA Federal Credit Union - 1.75% ($100K) 1.55% ($10K) 2-year CD (San Bernardino County, CA; parts of WA & AK)
• Harris County Credit Union - 1.71% ($95K) 1.41% ($2.5K) 2-year CD (Houston)
• Department of Commerce FCU - 1.65% 2-year CD (Washington DC)
• mBank - 1.60% 2-year CD (parts of Michigan)
• Montauk Credit Union - 1.50% 2-year CD (New York City)
• Cross River Bank - 1.50% 2-year CD (NJ in NYC metro area)
• Valley Green Bank - 1.50% 2-year CD (Philadelphia)
• LOMTO Federal Credit Union - 1.50% 2-year CD (parts of New York City)
• Wings Financial Credit Union - 1.41% 2-year CD (Seattle & Minneapolis Metro areas)

3-Year CD Rates

• Digital Credit Union - 2.17% (2.61% 5-year CD closed after 3 years, see risks)
• Melrose Credit Union - 1.91% 3-year CD
• Fort Knox Federal Credit Union - 1.80% 3-year CD
• Ally Bank - 1.74% (1.84% 5-year CD closed after 3 years, see review & risks)
• Doral Bank Direct - 1.65% 3-year CD
• CIT Bank - 1.56% ($100K) 1.54% ($1K) 3-year CD

• Noteworthy Local Deals

• NavyArmy Federal Credit Union - 3.00% 30-month CD (Corpus Christi, TX metro)
• El Paso Area Teachers FCU - 2.42% ($50K) 2.32% ($500) 36 & 30-month CD (El Paso, TX)
• Credit Union of Atlanta - 2.28% 3-year CD (parts of Atlanta, Georgia)
• Veridian Credit Union - 2.20% ($100K) 2.00% ($1K) 39-month CD (several parts of Iowa)
• University of Iowa Community Credit Union - 2.20% ($250K) 2.10% ($100K) 2.00% ($1K) 37-month CD (several parts of Iowa)
• Alaska USA Federal Credit Union - 2.10% ($100K) 2.00% ($10K) 3-year CD (San Bernardino County, CA; parts of WA & AK)
• Department of Commerce FCU - 2.05% 3-year CD (Washington DC)
• Tandem Federal Credit Union - 2.00% 3-year CD (parts of Detroit metro)
• Cross River Bank - 2.00% 3-year CD (NJ in NYC metro area)
• SPCO Credit Union - 1.97% ($50K) 1.76% ($1K) 3-year CD (Houston, TX)
• Wings Financial Credit Union - 1.86% 3-year CD (Seattle & Minneapolis Metro areas)
• LOMTO Federal Credit Union - 1.85% 3-year CD (parts of New York City)
• EBSB Direct - 1.80% 3-year internet CD (New England & New York State)
• First American Credit Union - 1.76% ($50K) 3-year CD (south of Phoenix, AZ)
• mBank - 1.75% 3-year CD (parts of Michigan)
• HAPO Community Credit Union - 1.65% 3-year CD (WA State)
• City of Boston Credit Union - 1.65% ($50K) 1.55% ($500) 3-year CD (Boston metro)
• Community Bank of Tri-County - 1.60% bump-up 30-month CD (Southern Maryland)
• First Choice Bank - 1.60% ($50K) 1.55% ($2.5K) 3-year CD (Los Angeles & Orange County, CA)

4-Year CD Rates

• Digital Credit Union - 2.36% ($25K min w/relationship) 2.11% (no relationship) 4-year CD
• Digital Credit Union - 2.28% (2.61% 5-year CD closed after 4 years, see risks)
• Melrose Credit Union - 2.17% 4-year CD
• Nationwide Bank - 1.85% ($100K) 1.80% ($500) 4-year CD

• Noteworthy Local Deals

• Credit Union of Atlanta - 2.52% 4-year CD (parts of Atlanta, Georgia)
• Institution for Savings - 2.50% 4-year CD (one-branch special in northeast MA)
• Department of Commerce FCU - 2.50% 4-year CD (Washington DC)
• Liberty Savings Federal Credit Union - 2.40% 4-year CD (Northern NJ)
• University of Iowa Community Credit Union - 2.35% ($250K) 2.25% ($100K) 2.15% ($1K) 49-month CD (several parts of Iowa)
• SPCO Credit Union - 2.32% ($50K) 2.02% ($1K) 4-year CD (Houston, TX)
• Alaska USA Federal Credit Union - 2.30% ($100K) 2.20% ($10K) 4-year CD (San Bernardino County, CA; parts of WA & AK)
• Montauk Credit Union - 2.25% 4-year CD (New York City)
• Cross River Bank - 2.25% 4-year CD (NJ in NYC metro area)
• mBank - 2.25% 4-year CD (parts of Michigan)
• LOMTO Federal Credit Union - 2.15% 4-year CD (parts of New York City)
• Wings Financial Credit Union - 2.02% 4-year CD (Seattle & Minneapolis Metro areas)
• HAPO Community Credit Union - 2.00% 4-year CD (WA State)
• Peoples Alliance Credit Union - 2.00% 4-year CD (South Florida)

5-Year CD Rates

• Digital Credit Union - 2.86% ($25K min w/relationship) 2.61% (no relationship) 5-year CD
• Melrose Credit Union - 2.68% 5-year CD
• US Bank - 2.25% 59-month CD
• Quaint Oak Bank - 2.20% 5-year CD

• Noteworthy Local Deals

• El Paso Area Teachers FCU - 3.08% ($50K) 2.98% ($500) 5-year CD (El Paso, TX)
• Department of Commerce FCU - 2.80% 5-year CD (Washington DC)
• Liberty Savings Federal Credit Union - 2.80% 5-year CD (Northern NJ)
• SPCO Credit Union - 2.77% ($50K) 2.48% ($1K) 5-year CD (Houston, TX)
• Alaska USA Federal Credit Union - 2.75% ($100K) 2.65% ($10K) 5-year CD (San Bernardino County, CA; parts of WA & AK)
• General Electric Credit Union - 2.64% 5-year CD (Cincinnati OH metro)
• LOMTO Federal Credit Union - 2.55% 5-year CD (parts of New York City)
• First American Credit Union - 2.52% ($50K) 5-year CD (south of Phoenix, AZ)
• Montauk Credit Union - 2.50% 5-year CD (New York City)
• First General Credit Union - 2.50% 5-year CD (Grand Rapids, MI metro)
• Randolph-Brooks Federal Credit Union - 2.32% ($75K) 2.27% ($20K) 5-year CD (San Antonio & Austin, TX)
• Wings Financial Credit Union - 2.32% 5-year CD (Seattle & Minneapolis Metro areas)
• Washington Federal - 2.30% ($90K) 2.25% ($1K) 5-year CD (WA, AZ, ID, NV, OR, TX, UT & NM)
• Pasadena Service Credit Union - 2.30% 5-year CD (Southern California)
• Floridian Community Bank - 2.27% 5-year CD (South Florida)
• Peoples Alliance Credit Union - 2.22% 5-year CD (South Florida)

Over 5-Year CD Rates

• Navy Federal Credit Union - 2.80% ($20K) 7-year CD (membership restrictions)
• Apple Federal Credit Union - 2.80% 10-year CD
• Pentagon Federal Credit Union - 2.75% 7-year CD
• Discover Bank - 2.50% 10-year CD (2.55% AAA members)

• Noteworthy Local Deals

• SACU - 3.30% ($90K) 3.25% ($10K) 10-year (San Antonio, TX)
• Security Service Federal Credit Union - 2.85% ($100K) 2.70% ($500) 7-year CD (parts of Texas, lower rates in CO)
• Liberty Savings Federal Credit Union - 2.85% 6-year CD (Northern NJ)
• Randolph-Brooks Federal Credit Union - 2.84% ($75K) 2.78% ($20K) 7-year CD (San Antonio & Austin, TX)
• Department of Commerce FCU - 2.80% 7-year CD (Washington DC)
• SACU - 2.80% ($100K) 2.75% ($10K) 7-year (San Antonio, TX)
• Montauk Credit Union - 2.75% 7-year CD (New York City)
• Randolph-Brooks Federal Credit Union - 2.53% ($75K) 2.48% ($20K) 6-year CD (San Antonio & Austin, TX)
• Teachers Credit Union - 2.50% 71-month CD (parts of Indiana)
• Malvern Federal Savings Bank - 2.25% 7-year (East Pennsylvania)

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