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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 August 3, 2012

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With 10-year Treasury yields hitting record lows in July, it should have probably been expected that we would see several CD rate cuts with the start of August. That was the case this week especially for the long-term CDs. Rates for several of the 5-, 7- and 10-year CD rate leaders went down.

We lost two more 2% 5-year CDs. Fort Knox FCU cut its 59-month CD yield from 2.15% to 1.95% and Justice FCU cut its 5-year Jumbo CD yield from 2.05% to 1.90%. I now have only two 5-year nationally available CDs with yields of at least 2%. The highest rate is now US Senate FCU with a 2.12% APY 5-year CD for a $60K minimum deposit. Just under this is Navy Federal with a 2.05% APY 5-year CD with a $100K minimum deposit.

For 7-year CDs, both PenFed and Dime Savings Bank had big rate cuts. PenFed's CD yield fell from 2.40% to 2.02% and Dime Savings CD yield fell from 2.05% to 1.75%.

Discover Bank reduced its 10-year CD yield from 2.25% to 2.10%. Its 7-year CD yield remains at 2.00% so the 10-year CD no longer has much of a yield advantage over the 7-year CD.

There was one small bright spot this week. Ally Bank raised its 5-year CD yield from 1.69% to 1.74%. Since this CD has a small early withdrawal penalty of only 2 months of interest, this CD when closed early can be a better deal than shorter-term CDs.

If you think it's very unlikely that you'll need to close a CD before 3 years, Patelco Credit Union's special 7-year CD is a better deal than Ally's 5-year CD. This 7-year CD yield is still 2.50% which puts it far into the lead as the best nationally available 7-year CD rate.

Finally, I added two brokered CDs to the list of nationally available CDs with terms over 5 years. Fidelity and Vanguard are listing new issue brokered 10-year CDs with yields just above 2.50%. As I described in this post, brokered CDs have some downsides, but in today's awful interest rate environment, I want to include all options for savers to maximize their CD interest.

Local CD Deals

We also had many rate cuts on the local deals this week. Some of the banks and credit unions that had held their rates steady for several months had cuts.

EBSB Direct had kept a 1.80% APY on its 3-year internet CD for almost a year. This was an especially good deal since it was available to everyone in New England and New York State. That yield finally went down on Thursday. It's now only 1.25% APY. Perhaps that will be competitive once again next year (let's hope not).

Libertad Bank in Austin had been offering to Texas residents a special 1.50% APY 15-month CD for much of this year. That 15-month CD special ended this week. There's a new special 18-month CD with a 1.25% APY. It's not as good of a deal as that 15-month CD, but it's still a good deal compared to the internet banks.

Miami Postal Service Credit Union had a really good 9-month CD deal with a 1.25% APY for a $25K minimum deposit. That yield fell to 1.00% this week. Its 5-year CD yield also fell. It's now 1.91%, down from 2.02%.

The highest 5-year CD rate without a maximum deposit is now at First American Credit Union. It has a 2.52% APY for a $50K minimum deposit (2.37% APY for a $1K minimum). It's a small credit union with branches in Arizona and New Mexico.

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 August 3, 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
6 Comments.
Comment #1 by Anonymous posted on
Anonymous
Talk about fast falling rates, 3 months ago I got a 6 year IRA Rollover Step Up CD with INOVA at 2.60 APR....today, the same IRA Step Up CD is going for 1.05 APR. The 2.60 did not seem all that good at the time but the 1.05 as of now is terrible. I've got some other CD's maturing August 25 and rates, in general, may be be even lower then. Been thinking about borrowing some money now, invest it at todays rates and then pay the loan off with the August maturing CD's. On the other hand, some other good deals, relatively speaking,  may pop up by August 25. Hmmm. No worry though, it's all good.

4
Comment #4 by Kaight posted on
Kaight
#1:

I enjoyed your comment and gave you a thumbs up.  I like your inventiveness.  Back in the fall of 2008 I did exactly what you are outlining.  I thought CD rates would fall and I urgently wanted to get my money re-invested.  But I didn't have the money.  My maturing CDs were a month or two off.  So I borrowed the money and bought new CDs with that borrowed money.  It was my first time to have done such a thing.  Can tell you, I never had any regrets.  Rates did fall, and I was fortunate to have bought the CDs when I did.  I paid off the loans with my maturing CD money, just as you proposed.

At the present time I think November's elections will be determinative as regards the future of rates.  I don't know how the elections will turn out.  So predicting rates going forward is tough right now.  We do know Chairman Bernanke has promised low short rates out into 2014 . . . . for whatever that's worth.

1
Comment #2 by Anonymous posted on
Anonymous
To Anonymous #1:  If you had a really great deal that would be gone before your money was available, then it would be worth considering temporary borrowing to get in on it.  But nothing's good right now, might as well just wait and hope something good comes along.

2
Comment #3 by Anonymous posted on
Anonymous
Pretty much the best thing out their imo is wilshire banks installment cd rainbow savings at 2.23%.  Can't put alot of money in at once, but between me and my wife we are able to put 5k a month in, and at the end of 3 years (2015) we'll have 200k in it.  If the rates shoot up, then I can pull out at any time with losing 3 months or less interest.  I think ken should put the installment cd's somewhere on his weekly rate sheet, just so more people know about them, they are a little more work, but if you have a good free ach bank, like alliant that you can schedule transfers, it is very painless, and is very good for those with a decent cashflow coming in to be able to make the installment payments.

8
Comment #5 by lou posted on
lou
I agree it is very important for Romney to win if we ever have any hope of getting free market people appointed to the Fed Reserve. Unfortunately, if the election was held today, Obama would win. Even wth the terrible economy and the disastrous path we are on, Obama could be reelected. Go figure.

2
Comment #6 by lou posted on
lou
One downside to borrowing against your CDs is that it affects your credit rating. The lenders report it to the consumers bureaus as an installment loan, which lowers your credit rating. The rating agencies have no idea this is a risk-free loan, inasmuch as the loan is fully secured with CD funds deposited at the bank. This is proof that the formula for determining credit scores is completely ****ed up.

3