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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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Survey of the Best CD Rates for March 30, 2012

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Another top long-term CD rate fell this week. Last week it was Discover Bank. This week it's INOVA Federal Credit Union which reduced its 6-year CD rate from 2.50% to 2.10% APY. The one trend we have seen this month is falling rates on long-term CDs. It appears the spread between short-term and long-term CD rates continues to shrink.

With April starting on Sunday, we may see more cuts next week as credit unions publish their April rates.

I kept INOVA FCU's 6-year CD on the list, but I removed it from the shorter-term lists in which the 6-year CD would be closed early. I replaced it with PenFed's 7-year CD which has a 2.50% APY. Hopefully, PenFed will keep this rate into April. This PenFed CD has an early withdrawal penalty of up to 1-year of interest, so the effective yields when closed early are not as favorable. However, starting at year 3, PenFed's 7-year CD early-closure rate exceeds Ally Bank's 5-year CD early-closure rate. One nice thing about PenFed is that when it increased the 5-year CD early withdrawal penalty last year, it did not apply the change to existing CDs. The change only affected new or renewed CDs. As we learned in the last year, some credit unions have applied larger EWPs to existing CDs.

Local CD Deals

If you prefer opening a CD at a branch, it can be difficult to find CDs with yields of at least 2.00%. I did find a few new institutions this week offering 5-year CDs with yields around 2.00%.

I learned this week that Bank of the West is offering a 2.00% APY 5-year CD. This is a large regional bank with branches in many Western and Midwestern states. Two other large regional banks are also offering 2.00% 5-year CDs. US Bank has long been offering a special 59-month CD with a 2.00% APY. Unlike Bank of the West, US Bank allows its CDs to be opened online or by phone from any state. BBVA Compass is the other large regional Bank with a 2.00% 5-year CD. However, not all of its branches are offering 2.00%. Rates are lower in Texas, Alabama and Florida.

I added one Florida credit union this week to the 5-year list. The credit union is offering a 2.01% APY 5-year CD. There's also a special 1-year IRA CD with a 1.51% APY. Higher rates are available for checking relationships. It's City County Credit Union. Even though it only has branches in Broward County, membership is open to anyone who lives or works in one of many Florida counties in Central and South Florida.

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 recently highlighted 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 March 30, 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.

  Tags: CD rates

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Comments
Comment #1 by KevinM posted on
KevinM
I believe the INOVA 5-year (or 6-year) CD at 2.10% beats PenFed 7-year at three years. The simple formula shows it earning 1.75% at three years. In an IRA these CDs earn 2.20% (2.10% for step up).

1