Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Nationwide Bank2.00%$100k-60 Month IRA (Traditional,Roth)
Nationwide Bank2.00%$100k-60 Month CD
Nationwide Bank1.84%$100k-48 Month IRA (Traditional,Roth)
Nationwide Bank1.84%$100k-48 Month CD
Nationwide Bank1.26%$100k-36 Month IRA (Traditional,Roth)
Nationwide Bank1.26%$100k-36 Month CD
Nationwide Bank1.15%$100k-24 Month IRA (Traditional,Roth)
Nationwide Bank1.15%$100k-24 Month CD
Nationwide Bank1.11%$100k-18 Month CD
Nationwide Bank1.07%$100k-12 Month IRA (Traditional,Roth)
Nationwide Bank1.07%$100k-12 Month CD
Accounts mentioned in this post. Rates as of July 22, 2014

Higher CD Rates But Larger Early Withdrawal Penalty at Nationwide Bank

POSTED ON BY

Nationwide Bank

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The fee we may impose will equal 360 days interest on the amount withdrawn subject to penalty.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.

There are 5 all-access credit unions that still offer 2% 5-year CDs (Communitywide FCU, Eli Lilly FCU, Mountain America CU, Pen Air CU and Connexus CU).

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.

  Tags: Nationwide Bank, CD rates, IRA rates

Related Posts

Comments
8 comments.
Comment #1 by Anonymous posted on
Anonymous
The fee is only one aspect of EWP, the bigger problem is:
Would they let you do an early withdrawal?
If the rates are higher than your present rates, probably you can not get out.
I had problem with many banks in the nineties when the rates went up from 3 to 6%.
They all refuse to do early withdrawals of the principle.

14
Comment #2 by Anonymous posted on
Anonymous
#1: As quoted in the post, the Nationwide account terms and conditions specifically state: "You may make withdrawals of principal from your account before maturity."  I would think the only way it could get around this would be to amend those terms with 30 days prior notice under federal law.  The banks you're referring to may have expressly required prior bank consent in their deposit contracts.

7
Comment #3 by Anonymous posted on
Anonymous
To Anonymous - #2,

The key word is “may” not “can”. May is permissive in nature under approval by something or someone and is conditional. Can is directly pre-approved.


Example, you MAY go to Mike if your father approves it.
Example2, you CAN go to Mike, you don’t need anyone’s permission.

If a banks says MAY, it means we will give a hell first, before you see your money.

9
Comment #4 by Anonymous posted on
Anonymous
Wow, these responses are just so educational ! :)

1
Comment #5 by Anonymous posted on
Anonymous
Anonymous - #2, #3 is correct, I called the bank and they said you still need their approval to withdraw from your CD.

Your statement “ "You may make withdrawals of principal from your account before maturity."” ,has no merit, since the rules of how to withdraw are not specified in writing at the time of opening the CD, therefore, you are on their mercy, if they let you withdraw money on the first place.

The banks never put any rules up-front on how to pull money from CD, you always depend on their made up rules after the fact.

8
Comment #6 by Anonymous posted on
Anonymous
Ken covered the topic of a depositor's right to withdraw early in a post dated 3/28/12 on this site.  Included among a list of banks (all of which use the word "may," by the way) which Ken concluded "explicitly state that they will allow early withdrawal" is Nationwide Bank.  I agree with Ken's position.  I also suggest that the best way to handle a bank isn't to call and ask it what your rights are.  It's to call and tell it what your rights are. #2

2
Comment #7 by Anonymous posted on
Anonymous
To Anonymous - #6,
In that case, would you please write me an insurance policy for EWP in case the bank change her mind with “may” allow.
Such assurance is worth something this days. I will open accounts in every bank that says “may” allow early withdrawal of principle and of they refuse, I just will cash the policy issued by you or Ken.

6
Comment #8 by RICKNY (anonymous) posted on
RICKNY
The banks are experts in this stuff.  They change credit card terms all the time.  All they need in an agreement is that they can change terms sometimes without notice.  I'm sure many set up their bank products with loop holes that favor them.

3
Comment #9 by Anonymous posted on
Anonymous
On all of my CD’s disclosures is written that the bank can amend the EWP rules at any time, without prior notification of the CD holder (not with these exact words, but legalese language).

So, to all of you who think that “may allow” means you can withdraw early without any bank’s approval, you are deadly wrong and stop spreading false info, including Ken.

#1, #3, #5 and #8 are correct in their posting.

#6, you need stop spreading inaccurate info, somebody my take your advice as a fact.

3