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Survey of the Best CD Rates for January 20, 2012

POSTED ON BY

Two institutions on my list of nationally available CDs actually raised rates this week, but there's not much to celebrate. One was Ally Bank which just increased its 5-year CD rate by one basis point to 1.80% APY. The other institution was Fort Knox Federal Credit Union which became infamous last year for raising the early withdrawal penalty on existing CDs. Its 3-year CD rate went up by 10 basis points to 1.90% APY which puts it just under Melrose Credit Union's 3-year CD rate. Fort Knox FCU's 4-year CD rate went up by 5 basis points to 2.20% APY which puts it on top just above Melrose Credit Union's 4-year CD rate.

Unfortunately, there were far more rate cuts. The largest cuts were at Alliant Credit Union. Its Jumbo CD rates ($25K minimum) fell by 20 basis points. Alliant had the top spot for 18-month and 2-year terms, but now KeySource Commercial Bank has the highest 18-month CD rate with a 1.25% APY and Melrose Credit Union has the highest 2-year CD rate with a 1.41% APY.

Other nationwide banks that cut rates this week include Virtual Bank, Doral Bank Direct, US Bank and Capital One.

US Bank's special 59-month CD yield fell from 2.25% to 2.15% APY. It's now tied with KeySource Commercial Bank with the highest nationally available 5-year CD rate from a bank.

Capital One Direct Banking slashed its 10-year CD APY from 2.50% to 1.85% (Costco version had a similar cut). Because of this big rate cut, I removed the CD from the list. Discover Bank continues to hold the top spot for the highest nationally available CD rate at a bank with a 2.50% APY (2.55% APY for AAA members).

Local CD Deals

There were a handful of banks and credit unions that cut their CD rates this week. On the plus side, I added one bank to the 3.00% club. It's Tecumseh Federal Bank in Nebraska which is offering a 3.03% APY for terms of 6 and 8 years. I've been excluding this bank from the list since it's in a low-populated area of Nebraska. However, the bank is currently accepting deposits from people in any part of the state as long as they can make it to the branch. Remember to always verify with the bank the rate and qualifications before planning a long drive. Small banks will often restrict new CDs to their local market area.

With the addition of Tecumseh Federal Bank, the 3.00% club now numbers four institutions. The other three are credit unions in Texas.

I added another Texas credit union this week. It's Air Force Federal Credit Union. I added its 2.75% APY 7-year CD to the over-5-year list. The 7-year CD rate went up 40 basis points this week.

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.

The risks of planning for early withdrawals of long-term CDs was highlighted this week by another credit union which raised the early withdrawal penalty on existing CDs. The credit union is CEFCU which is based in Illinois. I have more details in this blog post. CEFCU is now the second credit union which has raised the early withdrawal penalty on existing CDs. Last year Fort Knox FCU did the same thing (see my blog post).

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 20, 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.'

Edit 1/21/2012: Corrected Andrews FCU name.


  Tags: CD rates

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Comments
5 Comments.
Comment #1 by Anonymous posted on
Anonymous
Suggest two minor teaks -

It is "Andrews" CU rather than "Andrew"

Apple's 10yr CD has an unusual 3-year penalty

2
Comment #2 by KenBDG posted on
KenBDG
Thanks. I fixed the name. About Apple FCU, I just noticed that they appeared to have reduced the EWP for terms over 5yr from 3yr to 1yr. I had noted the 3yr EWP last year so it looks like a recent change. Here's the link to their Q&A with the EWP description.

2
Comment #3 by Anonymous posted on
Anonymous
Greater metro FCU in NYC has 2.4percent for 5 years

2
Comment #4 by Anonymous posted on
Anonymous
Anony #3:  I checked out the Greater Metro FCU NYC and it seems it is a local basically deal only.  One has to live within 50 miles if I am reading it correctly.  Too bad the best deals always seem to be "local" even with credit unions.

1
Comment #5 by Anonymous posted on
Anonymous
Please note that Montauk Credit Union in New York City is not accepting applications for new CDs at present. However, they are allowing rollovers of existing ones. I confirmed this in person at their (only) office today. This was confirmed at a recent meeting and is likely to be the case for some time.

1