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Survey of the Best CD Rates for June 29, 2012

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The Ally Bank CD rate gyrations continued this week. The 5-year CD yield fell from 1.73% to 1.72%. At least the rate remains higher than what it was 2 weeks ago when the yield was 1.65%. As I speculated last week, these rate changes could be due to Ally's supposed agreement with the FDIC that requires Ally not to be one of the nation's top five rate payers, as measured by Bankrate.com. Last week Ally's 1.73% CD was 6th from the top. EverBank's 1.74% 5-year CD was 5th from the top. Guess who also had a rate cut today. EverBank's 5-year CD yield fell to 1.73% so it remains 5th on the list and Ally remains 6th. Coincidence?

The 5-year CD rate leader (for CDs that are nationally available) had a rate cut this week. Justice Federal Credit Union had the top spot with its 2.20% APY Jumbo CD. That fell to 2.05% APY. The top spot now goes to the 2.17% APY 5-year CD at Melrose Credit Union.

There was also a rate cut at AmTrustDirect. It had the highest 3-year CD rate that's nationally available at a bank. That yield fell this week from 1.55% to 1.35%. The new bank leader is Doral Bank Direct which offers a 1.50% APY 3-year CD. Melrose Credit Union remains the overall leader with a 1.76% APY 3-year CD.

With July starting on Sunday, we may see more rate cuts next week.

One small bit of good news was the addition of Ascencia Bank's 6-month CD which has a 0.90% APY. That exceeds the previous 6-month CD rate leader, Colorado Federal Savings Bank, which continues to pay 0.80%. If you prefer a short-term CD, there are 3 better options.

First, EverBank's checking and money market promo offers 1.25% guaranteed for 6 months. The two downsides for this offer is that it's only for new EverBank customers and the maximum balance that qualifies for this yield is $100K for the checking and $50K for the money market.

Another option without EverBank's limitations is Ally Bank's 11-month No Penalty CD. Its yield went down slightly this week to 0.93%. Since this has no early withdrawal penalty, a customer can make this CD have any term he or she wants from 7 days to 11 months. I reviewed my experience closing this CD early in my Ally No Penalty CD review.

The third option for someone who prefers a short-term CD is to choose a 5-year CD at either Ally Bank or Barclays. Both have small early withdrawal penalties which allow both CDs to pay more interest when closed early after 6 months than 6-month CDs. I reviewed this strategy and its risks in this blog post.

Local CD Deals

I added just one financial institution to the local lists this week. Navigator Credit Union with branches near the coast of Alabama and Mississippi is offering competitive 4-year and 5-year CD rates. Its highest yield is 2.25% on its Jumbo 5-year CD.

If you're a CD investor, consider yourself lucky if you live in either Iowa or Texas.

One of the best deals in Iowa continue to be from University of Iowa Community Credit Union. It changed its CD specials this week. Its 11-month CD special ended, but it added a new 44-month CD special with yields that range from 2.70% APY for a $250K minimum to 2.50% APY for a $1K minimum.

The only CDs that have higher rates than this Iowa 44-month CD special are from Texas. The best deal continues to be the 3.00% APY 30-month CD at NavyArmy Community Credit Union in Corpus Christi. The other CDs with higher rates are from San Antonio Credit Union (SACU) which offers a Jumbo 3.55% APY 10-year CD and a 3.05% APY 7-year CD.

Perhaps the competition from SACU encouraged Randolph-Brooks Federal Credit Union to change course on CD rate cuts. Its 7-year and 6-year CD rates went up this week by 5 basis points. Its Jumbo 7-year CD yield is now 2.43%. One advantage with Randolph-Brooks is that residents in Austin can qualify for membership.

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 29, 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
5 Comments.
Comment #1 by Smokeboat (anonymous) posted on
Smokeboat
Fort Knox FCU raised the 59 month CD rate to 2.25% from 2%. 

6
Comment #2 by Anonymous posted on
Anonymous
#1  I wonder if this is a sign that some other banks may follow suit and we can expect a bit higher rates.  I sure hope so!

7
Comment #4 by I hate Fort Knox CU (anonymous) posted on
I hate Fort Knox CU
Remember, just last year Fort Knox CU retrocatively changed the terms of their pre-existing CDs and got awy with it!

So whenever you give FKCU your money for a CD, you have no idea what you will get since they can change the terms whenewver they please.

2
Comment #5 by Bozo posted on
Bozo
A hearty "I agree" to comment #4. I would be more than a bit leery in giving any money to a financial institution that thought it could change a material term of a CD at its whim. There are many terms in a CD that one might deem "material". Fort Knox should remember that the latin root for "credit" (as in "credit union") is "credo", or trust. I have neither the time nor the resources to do battle with an institution which might play fast and loose with my CD money.

4
Comment #6 by Anonymous posted on
Anonymous
#5  And I thought your were a lawyer?  Did you lose your zest?

1