With so many banks cutting their CD rates, I was pleasantly surprised to see that EBSB Direct continues to offer a very competitive 3-year CD rate. As of the morning of 8/1/2012, the APY is still 1.80%. This yield has remained unchanged since August 2011. I last reviewed it in October. At that time the rate was competitive. As rates at other banks have fallen, this 1.80% APY has become much more competitive. Minimum deposit is $1,000. These rates are listed at EBSBdirect.com as of 8/1/2012.
I called the bank this morning to make sure that this 1.80% APY is still valid. The CSR said it's correct. Unfortunately, she didn't know when it may change. I was told the rate locks at the time you apply. The CD is funded by an ACH transfer from your current bank account. Maximum deposit is $250,000 per CD. Multiple CDs of $250K each can be done. When the CDs mature, they don't offer an option for an ACH transfer. They can mail you a check for free, or you can request a wire transfer for a $20 fee.
According to the bank's disclosure, "terms over 12 months the penalty will equal 6 months interest on the amount withdrawn."
EBSBdirect.com also offers an online savings account, but this rate is not nearly as competitive as the 3-year CD. It currently has a 0.80% APY for balances of at least $50K.
New England and New York Only
Even though there's an online application, the bank continues to limit new applications to residents of New England and New York State. I again confirmed this with the bank today. This limitation isn't noted at EBSBdirect.com which isn't a sign of good customer service since some people may waste their time applying.
Private Excess Deposit Insurance
Customer deposits at EBSB Direct are insured in full through FDIC and DIF insurance. Deposits Insurance Fund (DIF) provides excess deposit insurance for Massachusetts-chartered savings banks. I reviewed DIF and other private deposit insurance in this blog post. You'll have to make your own decision about the safety of DIF. It should be noted that there has been only one MA bank that has failed since 2000. In that case the FDIC arranged for another bank to assume all deposits of the failed MA bank.
EBSB Direct is an online division of East Boston Savings Bank. The bank has an overall health score of 4 stars (out of 5) with a Texas Ratio of 25.88% (average) based on March 2012 data. Please refer to our financial overview of East Boston Savings Bank for more details. The bank has been a FDIC member since 1991 (FDIC Certificate # 33510).
How This CD Rate Compares
Sandia Laboratory FCU continues to have a big lead as the 3-year CD rate leader for all-access credit unions. It offers some very high jumbo 3-year CD rates that include a 1.92% APY for a $200K minimum, 1.82% APY for a $100K minimum and 1.71% APY for a $50K minimum. The next highest 3-year CD rate at an all-access credit union is 1.46% APY at Melrose Credit Union.
These rates are accurate as of the morning of 8/1/2012.
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.