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Survey of the Best CD Rates for June 1, 2012

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Survey of the Best CD Rates for June 1, 2012

Today's news was grim for savers. The combination of the very weak May jobs report and Europe's deepening debt crisis pushed the 10-year Treasury yield to a record low of under 1.50%. This could lead to more Fed stimulus and more deposit rate cuts.

Several credit unions cut their CD rates today as the new month started. Most of these cuts were probably planned weeks ago. Based on today's news, we may see more cuts when July starts.

We already had known about Alliant Credit Union's savings account rate cut, but it also cut its CD rates with the new month. Rates on all of its CD terms were cut by 15 basis points.

PenFed cut its CD rates by 10 basis points. PenFed's 5-year and 7-year CD yields are now 1.90% and 2.40%. The top 7-year CD rate is now at Patelco Credit Union which kept its 7-year CD yield at 2.50%. Patelco 7-year CD also has the same early withdrawal penalty as PenFed's 7-year CD (1 year of interest), so if you're considering a 7-year CD, Patelco is the best choice out of the all-access credit unions. Navy Federal has the highest 7-year yield of 2.65%, but this requires a $100K minimum deposit and you must have some military connection to qualify for Navy Federal membership.

There were also rate cuts at the smaller all-access credit unions. Astera Credit Union used to have the top 5-year CD spot with a 2.25% Jumbo CD. That yield fell today to 2.00%. US Senate Federal Credit Union had been in second place with a 2.22% APY. That fell to 2.10%. So the new 5-year CD leader is at Justice Federal Credit Union which offers a Jumbo CD with a 2.20% APY. Melrose Credit Union is close behind with a 2.17% APY. This requires only a $5,000 minimum deposit.

I usually don't mention megabanks in the list of top rates, but Bank of America's 10-year CD has long been on the list with a 2.30% APY. That fell to 2.00% APY this week. However, customers who open the CD online through MyExpression Banking (Defenders of Wildlife) can get a 2.10% APY. With 10-year Treasury yields below 1.50%, this BofA CD doesn't look too bad. For those who may want to stick with a too-big-to-fail bank, this 10-year CD may be something to consider. If you don't care about (or believe in) the too-big-to-fail status, Discover Bank's 10-year CD is a better choice. It still has a 2.25% APY (2.30% for AAA members). The advantage over Bank of America is a smaller early withdrawal penalty (9 months of interest at Discover).

Not all rates went down. Ally Bank's 11-month No Penalty CD rate went up 3 basis points to 0.94% APY. If you prefer short-term CDs with terms under 12 months, it's hard to beat this CD.

Local CD Deals

For the local deals, there were also some rate cuts, but the cuts weren't that prevalent as compared to the all-access credit unions.

One notable rate cut was at Union Bank which is a large regional bank on the West coast. Its 5-year CD yield for branches in WA and OR fell from 2.00% to 1.80% APY.

There are still two large regional banks that have 2% 5-year CDs. BBVA Compass is still offering a 2.00% APY 5-year CD, and Washington Federal still has a 2.00% APY 5-year CD (2.05% APY for a Jumbo CD).

There was one credit union that actually raised its CD rates for June. University of Iowa Community Credit Union came out with some new CD specials with rates even higher than previous specials. The specials include a 1.35% APY 11-month CD, a 1.85% APY 22-month CD and a 2.35% APY 33-month CD. These require a $100K minimum. Rates are 10 basis points lower for a $1K minimum and 10 basis points higher for a $250K minimum. Membership in the credit union is open to residents of many Iowa counties.

Finally, I want to remind those in Texas who may be looking for a short-term CD about the deal at Libertad Bank. It's still offering a very competitive 15-month CD with a 1.50% APY. Anyone in Texas is eligible to open this CD online (see review). This rate would be competitive even for a term twice as long.

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 June 1, 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 jayar posted on
jayar
                Could you please quote CD rates for Banks that offer them to Business Accounts.

Your rates are Personal CD's only

Thanks

2