Survey of the Best CD Rates for December 3, 2011

Rate changes at credit unions and banks are most common at the start of the month, and there were quite a few changes with the start of December. Unfortunately, must were rate cuts. However, there was some good news. Most of the CD rate leaders on my list that are nationally available kept rates unchanged. That includes Ally Bank's 5-year CD.

The only rate cut was the end of the promotional CDs at Velocity Credit Union. Those ended in November. However, Velocity Credit Union's standard 5-year CD rate is still competitive with a 2.32% APY. There are a few all-access credit unions with higher rates, but all except Digital Credit Union have larger early withdrawal penalties. Velocity and Digital just have the standard 6 months of interest penalty. Velocity members who are at least 50 can get an extra 10 to 20 bps on the standard CD rates by qualifying for Elite Rewards.

If you prefer a bank over a credit union, you will likely have to settle for much lower rates especially for long-term CDs. The best nationally available 5-year CD rate at a bank continues to be at US Bank with a 2.25% APY. This is US Bank's special CD, and the term is just under 5 years (59 months). As you can see in the list below, you can get a much higher rate at Digital Credit Union and Melrose Credit Union. Another downside with US Bank is that it's on my list of inflation dangerous banks since its disclosure gives the bank the right to refuse an early withdrawal. On top of that, it has a harsh early withdrawal penalty (see my US Bank CD review).

If you prefer short-term CDs with terms under one year, you'll have a difficult time finding anything over 1.00%. You might ask why not just keep your money in an internet savings account which can earn about the same rate. The risk is that the savings account rate will fall, and as we have just seen with SmartyPig and with ING Direct, savings account rates can fall quickly.

For short-term CDs, the best deal is Ally Bank's 11-month No Penalty CD which currently has a yield of 0.96% APY. The no-penalty feature allows the customer to make this CD into any term he or she wants from 7 days to 11 months. Thus, there's no reason to choose a 3-month, 6-month or 9-month CD over this 11-month CD unless the other CD rate is higher.

Local CD Deals

Not all rate changes in December were rate cuts. Two Texas credit unions actually increased their rates, and they were both already rate leaders.

El Paso Employees Federal Credit Union increased rates on several of its long-term CDs including its 5-year CD. The 5-year CD yield increased from 3.03% to 3.29% which puts the credit union on the top for the highest CD rate in the nation. Unfortunately, membership is limited to those who live, work, worship or attend school in El Paso County, Texas.

The other Texas credit union which increased rates is San Antonio Credit Union (SACU). Its 10-year CD yield increased from 3.00% to 3.20%.

Unfortunately, the number of credit unions and banks offering CD rates of at least 3.00% didn't increase. I now have just three Texas credit unions on my list that meet this criteria. All three have limited membership. You can find other banks and credit unions with CD rates of at least 3.00% in our CD rate tables, but this survey focuses on credit unions and banks in sizable metro areas. Also, the credit unions in this survey allow more people than just those in small employer groups to join.

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 and Velocity Credit Union is only 6 months of interest, this makes their 5-year CDs 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 3, 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
• Atlantic Coast Bank - 1.00% 7-month internet CD
• Ally Bank - 0.96% 11-month No-Penalty CD
• OneWest 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)
• 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)
• Velocity Credit Union - 1.15% (2.32% 5-year CD closed after 1 year, see review)
• 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 Employees Federal Credit Union - 1.41% 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)
• Cross River Bank - 1.25% 1-year CD (NJ in NYC metro area)
• 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)
• Velocity Credit Union - 1.54% (2.32% 5-year CD closed after 18 months, see review)
• Alliant Credit Union - 1.35% ($25K min) 18-month CD
• Franklin Synergy Bank - 1.24% 18-month CD (requires chk or savings)
• 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)
• 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)
• HAPO Community Credit Union - 1.25% 18-month CD (WA State)

2-Year CD Rates

• Digital Credit Union - 1.95% (2.61% 5-year CD closed after 2 years, see risks)
• Velocity Credit Union - 1.74% (2.32% 5-year CD closed after 2 years, see review)
• 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)
• Wings Financial Credit Union - 1.51% 2-year CD (Seattle & Minneapolis Metro areas)
• 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)

3-Year CD Rates

• Digital Credit Union - 2.17% (2.61% 5-year CD closed after 3 years, see risks)
• Velocity Credit Union - 1.93% (2.32% 5-year CD closed after 3 years, see review)
• 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 Employees Federal Credit Union - 2.47% 3-year CD (El Paso, TX)
• Credit Union of Atlanta - 2.28% 3-year CD (parts of Atlanta, Georgia)
• 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)
• 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 - 1.96% 3-year CD (Seattle & Minneapolis Metro areas)
• LOMTO Federal Credit Union - 1.85% 3-year CD (parts of New York City)
• HAPO Community Credit Union - 1.80% 3-year CD (WA State)
• 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)
• Community Bank of Tri-County - 1.70% bump-up 30-month CD (Southern Maryland)
• City of Boston Credit Union - 1.65% ($50K) 1.55% ($500) 3-year CD (Boston metro)
• 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
• Velocity Credit Union - 2.03% (2.32% 5-year CD closed after 4 years, see review)
• airbanking (MainStreet) - 2.00% 4-year CD

• Noteworthy Local Deals

• El Paso Employees Federal Credit Union - 2.68% 4-year CD (El Paso, TX)
• 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)
• University of Iowa Community Credit Union - 2.50% ($250K) 2.40% ($100K) 2.30% ($1K) 49-month CD (several parts of Iowa)
• Liberty Savings Federal Credit Union - 2.40% 4-year CD (Northern NJ)
• 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)
• HAPO Community Credit Union - 2.15% 4-year CD (WA State)
• Wings Financial Credit Union - 2.12% 4-year CD (Seattle & Minneapolis Metro areas)
• 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
• Velocity Credit Union - 2.32% 5-year CD promo (see review)
• US Bank - 2.25% 59-month CD
• airbanking (MainStreet) - 2.15% 5-year CD

• Noteworthy Local Deals

• El Paso Employees Federal Credit Union - 3.29% 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)
• First General Credit Union - 2.50% 5-year CD (Grand Rapids, MI metro)
• Wings Financial Credit Union - 2.42% 5-year CD (Seattle & Minneapolis Metro areas)
• Randolph-Brooks Federal Credit Union - 2.38% ($75K) 2.32% ($20K) 5-year CD (San Antonio & Austin, TX)
• Pasadena Service Credit Union - 2.30% 5-year CD (Southern California)
• 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 - 3.20% ($90K) 3.15% ($10K) 10-year (San Antonio, TX)
• Security Service Federal Credit Union - 2.85% ($100K) 2.75% ($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)
• Third Federal - 2.05% 6-year CD (in SE & SW Florida, Ohio)

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