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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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Top CD Rates at Bank of America & Chase Bank But With Major Downsides

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CD rates over 2.00% at a brick-and-mortar bank are not easy to find these days. Two of the megabanks, Chase Bank and Bank of America, are currently offering CD rates that are over 2.00%, but there are two big downsides. First, they require a very long term of 10 years. Second, both have a harsh early withdrawal penalty: 3% of the principal withdrawn plus $25. Bank of America is also on my list of inflation dangerous banks since they give themselves the right to refuse an early withdrawal.

For Chase Bank, the special 10-year CD has a 2.25% APY in some states. Other states have a yield of only 1.75%. You can check Chase's CD rates page to see if the 2.25% APY is available in your zip code. I found 2.25% is available in California and New York zip codes as of 12/02/2011. The 1.75% APY was available at Illinois, Texas and Florida zip codes. These Chase special CDs have a $10K minimum deposit, and they require a checking account.

Bank of America's 10-year CD has a 2.30% APY. Like Chase, this can vary by state. I verified this rate for Florida, Texas and California at Bank of America's CD rates page. For California, the yield applied to CDs with terms from 7 to 10 years. For the other states, it only applied only to the 10-year term. This rate was accurate as of 12/02/2011.

Other Options for Long-Term CD Rates

Another option for a CD rate over 2% at a large brick-and-mortar bank is the 59-month CD special at US Bank. The yield is still 2.25% APY as of 12/02/2011. I reported on this CD in this October US Bank CD review. US Bank also gives itself the right to refuse an early withdrawal, and its early withdrawal penalty is even worse than BofA and Chase.

Pentagon Federal Credit Union still offers 2.75% APY for its 7-year CD and IRA CD. My last review of PenFed CDs was in October.

The highest CD rate at a nationwide bank is 2.50% APY at Discover Bank (as of 12/02/2011). It has a term of 10 years, but it has a smaller early withdrawal penalty than the other banks with (9 months of interest). It's even smaller than PenFed's EWP.

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.


  Tags: Bank of America, Chase Manhattan Bank, CD rates, IRA rates

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Comments
24 Comments.
Comment #1 by cu#06050w (anonymous) posted on
cu#06050w
everyone complains bout bank o america yet they are the biggest ?? I for one with the above listed at 5.5 due 12 20 senior notes  will not bite the hand that feeds me

2
Comment #2 by Anonymous posted on
Anonymous
cu#06050w" What are you talking about?

2
Comment #3 by Anonymous posted on
Anonymous
Naturally, if you loan money to a corporation, in this case a bank, by purchasing their senior notes, you would not want to bite the hand that feeds you.  However we are talking about Federally insured certificates of deposits, not loaning money directly to the bank itself.  Huge difference!

4
Comment #4 by Anonymous posted on
Anonymous
2 see 3  correct but any one with serious cash in cds earns  what   no risk no reward within the next 5 years i plan on having my portfolio 50 50 bonds and mutual funds

1
Comment #6 by Anonymous posted on
Anonymous
#4  One can still lose money in Bonds and especially in Mutual Funds even if you do your homework and try to pick the best.  Mutual Funds are still playing with stocks but a bit safer, imo.  I tried them and decided after I lost money not too long ago in them, I decided to sleep better with CDs.  Just my personal preference.

2
Comment #5 by Anonymous posted on
Anonymous
The Velocity C,U. CD looks better already (Prmo Ended 11-30-11) 5-Year CD 2.83% APY. Only 6 mo. interest penalty for early withdrawal. No right to refuse clause. EZ membership (NCUA)!

The 5 YR CD still has a nice yield 2.32%APY w/ same terms! $1000min.

1
Comment #7 by Anonymous posted on
Anonymous
IF BOA WAS TO BANKRUPT, THE BONDS WOULD DEFAULT.  THEY ARE NOT FDIC INSURED.  YOU WOULD THEN WANT TO BITE BOA'S HAND.

4
Comment #8 by 4 aqui (anonymous) posted on
4 aqui
agree with 6 and 7 but i am only 57 and have to take some risk because with out i will definetiley run out of dinero befoer i turn 70

1
Comment #9 by Anonymous posted on
Anonymous
cu#06050w - #1, "... bank o america yet they are the bigges"

Not so. Technically, JP Morgan is now the largest bank.

1
Comment #10 by joe (anonymous) posted on
joe
Seem as if penfed is the best deal now as far as the rate and least amount of aggravation setting up.  I have about 200k of cds and will cash out if rates increase.  If they decrease, then I win and will keep to maturit.  I figure I'll be under the 250k limit in 7 years in that scenario.

2
Comment #11 by Anonymous posted on
Anonymous
Mutual Funds are a basket of stocks that your trusting some over paid fund manager to make your investment decisions for you. Bonds are also a bad risk in this economic enviorment. You're either betting on corporate bonds on companies that are cooking the books. municiple bonds from bankrupt cities, counties or states. Treasuries are the only safe bonds and they yield less than the 5 year CD mentioned above.

2
Comment #12 by Anonymous #2 (anonymous) posted on
Anonymous #2
Ok. I get it now. Cu#06050w has bought the equivalent of junk bonds bonds in a bank that is bleeding capital in part because of the shoddy mortage portfolio it acquired from Countrywide. The losses were foreseeable before BOA unwisely pulled a bunch of political strings to prematurely (as it now seems) pull out of TARP. In addition, BOA is desperately trying to cut overhead by firing staff which will further reduce efficiency while simutaneously ruining its public image by attempting to wring more fees from its customers. The aforementioned scenario has led to an unprecedented collapse of BOA stock which could leave that bank's stockholders and unsecured bondholders like Cu#0605w with their hats in their hands should BOA need another bailout. Awesome move CU#0605w.

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Comment #13 by Anonymous posted on
Anonymous
One of the shrewdest investor Warren Buffet bought into Bank Of America.  Specifically he bought Preferred Shares of BofA.  So if Buffet thinks the bank is a good investment (both its bonds and stocks), then I am quite willing to give BofA benefit of the doubt.

2
Comment #14 by Anonymous posted on
Anonymous
Here is link from Reuters that has details:

http://www.reuters.com/article/2011/08/25/us-bankofamerica-instantview-idUSTRE77O47N20110825

It is widely known that Warren Buffet is a very good investor, and he goes for a long-term performers, therefore my opinion is that he expects that BofA to do well and give him good returns of the money he invested with BofA.

2
Comment #17 by Anonymous #2 (anonymous) posted on
Anonymous #2
#14 I'll see that article and raise you with this up to date one:

http://www.pennystockicons.com/cnn-money/bank-of-america-stock-slides-to-new-low/

Buffet bought into BOA in August. Since then BOA stock has continued to decline and now trades for about five bucks a share. That technically almost makes it a penny stock. The stock has lost about 62% of its value this year which makes me wonder if Buffet would still buy into BOA.

Currently, BOA is trying to raise cash by selling some of its non-traditional subsidiaries and selling its debentures. If you bought some of the latter, you may be looking forward to a long career in the food service industry.

 

 

4
Comment #15 by Anonymous posted on
Anonymous
ch ching for me and my senior notes

1
Comment #16 by Alegra (anonymous) posted on
Alegra
The high-2's cd rates still available at some CU's, even for 7-10 yrs., look real good now, better than stocks, bonds, mfunds,etc.   Just my opinion.

1
Comment #19 by Anonymous posted on
Anonymous
ill see that article

1
Comment #20 by Anonymous posted on
Anonymous
You would be foolish to think that the Gov't is going to let BOA fail, The economy would collapse under the weight of a bank failure of that magnitude. Then it won't matter where your money is, it will be worthless!

1
Comment #22 by Anonymous #2 (anonymous) posted on
Anonymous #2
I don't agree that the government won't let BOA fail. What the Comptroller can do is appoint the FDIC receiver of BOA and then let the FDIC use its amped up resolution authority under Dodd-Frank to work out a transaction that will likely cause BOA to be effectively dismembered. This will effectively kill off the interests of all stockholders and subordinated debt (i.e. bond) holders. Any such deal may involve some government money in the short haul but, considering current public opinion, I doubt if another bailout is possible for BOA. In other words, buying bonds from BOA may turn out to be the equivalent of buying a deck chair on the Titanic.

4
Comment #25 by Anonymous posted on
Anonymous
>> Buffet bought into BOA in August. Since then

>> BOA stock has continued to decline and now

>> trades for about five bucks a share.

 

I suspect you are missing the point on two counts!  What you are quoting is performance of <B>common stock</B> of Bank of Amarica. Also what you are quoting is mere 4 months period.

 

Buffet, as I mentioned earlier, is a very shrewd investor.  And what he bought is not the common stock at all, but the <B>prferred stock</B>.  Big difference.  So your "raise" is inapplicable!

 

Anyhow suppose we were to consider the common stock, then 4 months is a blip for Warren Buffet who has investment horizons of years.  So wait a few years and see how Bank of America performs.

 

.

2
Comment #26 by Anonymous posted on
Anonymous
Consider this:

If Warren Buffet lost every dollar he has invested in B.O.A, he would still be worth millions if not billions of dollars.  But can YOU afford to loose every dollar you may have in in B.O.A.'s stocks or bonds?

1
Comment #27 by Anonymous posted on
Anonymous
Anonymous - #26,

Loose? lol

1
Comment #28 by Anonymous posted on
Anonymous
Err ... Yes ... I can afford to loose every dollar I have in common stock and bonds of Bank of America.

Let us see ... I have $0 in common stocks of BAC, and $0 in any bonds that BAC has issues .... So ... Definitely I guess I can afford to loose all of my $0 !!!

.

2