Doral Bank Direct continues to offer some competitive CD rates. The best two are a 1.15% APY 1-year CD and a 1.50% APY 3-year CD. The 6-month CD rate is also competitive at 0.75%. It's hard to believe such a low rate could be competitive, but if you compare it to other internet banks, it's close to the top. Minimum deposit is $1,000. These rates are listed at Doral Direct CDs page as of 5/10/2012.
I've reported on Doral Bank Direct over the last few years. The bank used to have some unfriendly policies for CD holders. For example, they used to require CD holders who wanted to close their CDs at maturity to mail in the original paper certificate. This appears to have changed. This week I emailed the bank for details on opening and closing a CD. Here is the reply I received:
The rate locks in at the time you submit the application. Whether by mail, where we would honor the post mark on the envelope, or online, where we would honor the date and time submitted.
Upon maturity of the CD, you will receive a maturity notice. If you choose to move the funds at that time, we would ask that we receive written notification from you. We welcome notification by fax, mail, or an attachment to an email.
Upon maturity, we will be happy to ACH funds into an account we received by online application. However, if the application was received by mail, we would use a check to distribute funds.
They have made it a little easier to close a CD, but they still require written notification. Also, it's nice that they will do an ACH transfer of the funds into your account that was used to fund the CD.
Early Withdrawal Penalty
An online disclosure provides many CD details. Here's an excerpt of the early withdrawal penalty section:
The penalty will be accessed based on the term of the deposit - 90 days simple interest for terms less than 1 year; 180 days simple interest for terms of 1 year or longer. Early withdrawal penalty is calculated on the amount of the amount withdrawn.
Unfortunately, the disclosure gives the bank the right to refuse an early withdrawal. The following is stated in the transaction limitations section of the disclosure:
You cannot withdraw principal from this account without our consent except on or after maturity.
If you plan to use interest from the CD as income, you can have it paid monthly, semi annually or annually. Here's an excerpt from the withdrawals of interest section of the disclosure:
You may withdraw interest from your account at any time during the term after it has been credited without any penalty. You may request to have credited interest deposited to another account you have with us, transferred to your initial account opening funding account with another financial institution or sent to you in the form of a check.
Online Application & Beneficiaries
The online application allows you to specify up to 3 beneficiaries. Another nice thing about this part of the application is that it doesn't require the beneficiaries' social security numbers. The only required fields are the beneficiary name, relationship and percentage amount.
There was a time last year that they did not accept deposits from all states. However, that is no longer the case. This is stated at the bottom of the Doral Direct CDs page:
We are currently offering this deposit product to all 50 States.
Doral Bank Overview
CDs at DoralBankDirect.com and provided by Doral Bank. There used to be two Doral Banks with separate FDIC charters, Doral Bank and Doral Bank, FSB. However, the bank holding company, Doral Financial Corporation merged these into Doral Bank last year. Below is an excerpt from the Doral Financial 10-K:
Effective October 1, 2011, the Company completed an internal reorganization by merging its two depository institution subsidiaries, Doral Bank, FSB (which was an FDIC-insured federal savings bank with its main office in New York, New York) and Doral Bank. Doral Bank was the surviving institution in the merger and the main office and branch offices of Doral Bank, FSB located in the states of New York and Florida are now operating as branches of Doral Bank.
Doral Bank isn't in the best financial shape. It has an overall health score of 3 stars (out of 5) with a Texas ratio of 79.92% (below average) based on December 2011 data. Please refer to our financial overview of Doral Bank for more details. The bank has been a FDIC member since 1981 (FDIC Certificate # 32102).
How These CD Rates Compare
This is one of the few times that the best rate is from a bank instead of a credit union. This 1-year CD rate is the highest rate that's nationally available. CIT Bank has a 1-year CD rate that's only 7 basis points lower, and it allows an add-on deposit and a one-time rate bump (see post).
Doral Bank Direct's 3-year and 6-month CD rates are just 5 basis points under the best rates available nationwide. The best 3-year CD rate is 1.55% APY at AmTrustDirect and the best 6-month CD rate is 0.80% at Colorado Federal Savings Bank. I'm not sure how much is gained with going with a 6-month CD over an internet savings account. Another good alternative to a 6-month CD is Ally Bank's 11-month No-Penalty CD which has a 0.94% APY. This CD can be made to have any term from 7 days to 11 months.
These rates are accurate as of 5/10/2012.
Searching for Top CD Rates
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.