Nationwide Bank has increased some of its CD and IRA CD rates. Many of these rates are now very competitive especially as compared to other internet banks. However, I just noticed one downside. There has been an increase to the long-term CD early withdrawal penalty.
For the rate increases, the 5-, 3- and 2-year CD rates went up by 5 basis points. Below is a list of Nationwide Bank's most competitive CD and IRA CD rates for a minimum $100,000 deposit as listed at the bank's rates page as of 10/4/2012. Rates are 5 basis points lower for deposits under $100,000.
- 1.85% APY 5-year CD and IRA CD
- 1.61% APY 4-year CD and IRA CD
- 1.35% APY 3-year CD and IRA CD
- 1.20% APY 2-year CD and IRA CD
- 1.10% APY 18-month CD
- 1.05% APY 1-year CD and IRA CD
The increase in the early withdrawal penalty took effect in June. Here's what was added to the account terms and conditions:
If your account has an original maturity of four years or greater and was opened after June 9, 2012:
The fee we may impose will equal 360 days interest on the amount withdrawn subject to penalty.
Before June, the penalty was only 180 days of interest. This now only applies for CDs with terms of 2- and 3-year CDs. The penalty for CDs with terms from 1 year to under 2 years is 90 days of interest.
One important thing to note is that this larger penalty only applies to CDs opened after June 9th. I'm glad to see Nationwide Bank made this note so we know it did not apply to existing CDs. Two credit unions weren't so nice (see post).
I also appreciate Nationwide Bank specifically stating that early withdrawal of principal is allowed (subject to the penalty). According to the terms and conditions document:
You may make withdrawals of principal from your account before maturity. Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty.
Some banks say in their disclosure that withdrawals of principal require their consent.
Certificate of Deposit Details
Some additional important CD details described in the bank's terms and conditions and from my past conversation with the CSR include:
- $500 minimum deposit
- 10 calendar-day grace period at maturity
- Interest is compounded daily and credited monthly
- You can withdraw interest any time during the term of crediting after it is credited to your account.
- Rate locks at the time you apply online or by phone. You have 30 days to fund the account. (CSR)
- You can fund the CD with an ACH transfer. Trial deposits are done to verify external account. Mailing a check and a wire transfer are also options (CSR)
- Beneficiaries can be added using this form (pdf)
- At maturity you can provide instructions by phone or secure message to close the CD (CSR)
- At maturity ACH transfer is not an option to receive the funds. In addition to a check and wire transfer ($25 fee for outgoing wire), they can transfer funds to your Nationwide Bank liquid account (CSR)
Another plus with Nationwide Bank is that they offer types of accounts that many online banks don't offer. These include:
- Trust accounts (opened by phone)
- Custodian (UGMA/UTMA) accounts
- Traditional IRA and Roth IRA accounts
Nationwide Bank Overview
Nationwide Bank is a sizable bank with $4.85 billion in assets. Its overall health score at DepositAccounts.com is 5 stars (out of 5) with a Texas Ratio of 0.70% (excellent) based on June 2012 data. Please refer to our financial overview of Nationwide Bank for more details. The bank has been a FDIC member since 1998 (FDIC Certificate # 34710).
How These CD Rates Compare
CIT Bank still has a slight lead in most of the CD rates. CIT Bank CD rates include a 1.90% APY for 5 years, 1.44% APY for 3 years, 1.25% APY for 2 years and 1.10% APY for 1 year. Both the 2-year and 1-year CDs offer an add-on option and a bump-up option.
You can still get a 2.00% APY 5-year CD at BBVA Compass, but this isn't nationally available. You have to live in the market areas where Compass has branches. These are in AZ, CA, CO, NM, AL, FL and TX.
These rates are accurate as of 10/4/2012.
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.