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Survey of the Best CD Rates for January 13, 2012

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Survey of the Best CD Rates for January 13, 2012

Most of the CD rate leaders held steady this week. There were a few rate cuts at banks with nationally available accounts.

Nationwide Bank had the best 4-year bank CD rate, but its rates fell by 10 basis points this week. Doral Bank Direct now holds the top spot for a 4-year bank CD with a 1.80% APY.

North American Savings Bank slashed its special 13-month CD yield from 1.25% to 0.90% so I removed it from my 1-year CD list.

CIT Bank reduced yields by 5 to 10 basis points on its 1-, 2- and 3-year CDs. This was the first rate cut since it launched its internet CDs in October. On the plus side, it introduced a new Achiever CD. This CD allows for one add-on deposit and one rate-bump during the term of the CD. The first Achiever CD has a 1-year term. This new one has 2-year term with a 1.26% APY. This yield may sound low, but it's just 4 basis points under the top internet bank 2-year CD APY of 1.30% at American Express Bank. I have more details on this Achiever CD in my new CIT Bank CD review.

The all-access credit unions of Alliant, Melrose, Digital and PenFed held their rates steady this week. I did replace PenFed in my 4- and 5-year CD lists with another all-access credit union. Andrews FCU has rates 5 basis points higher, and its 5-year early withdrawal penalty is half the PenFed penalty. Like PenFed, anyone can qualify, and CDs can be opened online (see my Andrews FCU CD review).

For the longest of the CD terms, I added Capital One's 10-year CD to my list. Its 10-year CD yields equal those of Discover Bank. In my opinion, Discover Bank is a better deal due to its more favorable early withdrawal penalty (see my review).

You can get close to Capital One's 10-year CD yield with only a 6-year term at INOVA Federal Credit Union. I added this all-access credit union to my list of CDs with terms over 5 years. It has an APY of 2.50%.

Local CD Deals

There were a few rate cuts on my lists of local CD deals. The 3.00% club is now down to three institutions. All three are in Texas. One of the three came close to falling off the list. Its a 5-year CD from El Paso Area Teachers FCU. The APY for a $50K deposit fell from 3.08% to 3.03%.

I added two institutions to the list of CDs with terms over 5 years. Both have rates comparable to the 10-year CDs at Discover and Capital One, but they have terms of only 6 and 7 years. The first is 1st Commonwealth Bank of Virginia which serves the DC metro area. It's offering a 2.60% APY 7-year CD and a 2.40% APY 6-year CD. The second institution is Gateway Metro Federal Credit Union which is open to residents in the St. Louis metro area. It's offering a 2.50% APY 6-year CD.

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 1.79% 5-year CD is still the best deal for 6, 12 and 18 months. However, Digital's 2.35% APY 5-year CD (2.60% with relationship checking) becomes a better deal when it's closed at 24 months or later.

As we learned in September, 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 January 13, 2012

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.


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