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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 October 26, 2012

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Survey of the Best CD Rates for October 26, 2012

The big news for CD savers this week was the Ally Bank's new amendment to its deposit agreement which gives it the right to refuse an early withdrawal request. Ally Bank maintains that the policy has not changed, and that "Ally Bank ordinarily will consent to the early withdrawal of a CD as long as the depositor pays the penalty." Nevertheless, due to the deposit agreement change, it can't be said that an early withdrawal at some point in the future is guaranteed. As I described in my review of this news, we have been aware of the risks of depending on early withdrawals. This latest news highlights those risks.

An important reason to want an early withdrawal is to move your money into a higher paying CD. Ally Bank's 4-year Raise Your Rate CD can make an early withdrawal unnecessary since it gives the option of bumping up the rate twice before maturity. Unfortunately, that became less of a deal this week. The 4-year RYR CD yield fell from 1.44% to 1.35%. That was the biggest rate cut for that CD this year. Ally Bank's 5-year CD yield also had a rate cut this week, but it was just a small cut. The yield fell from 1.66% to 1.65%.

There are two other banks that have CDs with a raise-your-rate feature that have become better deals than Ally's RYR CDs. The first is CIT Bank which has a 1.10% APY 1-year CD and a 1.25% APY 2-year CD. Both of these CDs have the raise-your-rate feature with one bump-up option. These also allow one add-on deposit. The other bank is Citizens State Bank in Florida which has a special 3-year Raise Your Rate CD. It has an online application that's currently open to anyone in the nation. This 3-year CD gives the customer one option to bump-up the rate.

There's a new 5-year CD rate leader for the nationally available accounts. However, the extra hassles required may not be worth the higher rate for some. The institution is Stanford Federal Credit Union in California. It's an all-access credit union which can be joined via an association. Its Premium Certificate with a $100K minimum deposit has a 2.12% APY. To qualify for this yield the member must either have a current loan or a checking account with a monthly direct deposit of $500.

There are still 6 institutions with 2.00% APY 5-year CDs that are nationally available. One is the small Citizens State Bank in Florida. The other 5 are all-access credit unions.

One thing to consider is that we may lose some of these 2% CDs in November. Patelco Credit Union has announced that October 31st is the last day for its special 2% APY 7-year CD.

Local CD Deals

There were a few rate cuts for the local deals this week. Biscayne Bank in Miami reduced its 1-year CD yield from 1.10% to 1.00%. That drop was enough to knock the bank off my list.

Denver Community Credit Union had long been offering a 2.35% APY 5-year CD. That yield fell 25 basis points this week.

Frontier State Bank in Oklahoma City slashed its 10-year CD yield from 2.02% to 1.51%. That was enough to knock it off of my list. The yield had been 2.42% back in August.

Finally, San Antonio Credit Union (SACU) cut its CD rates by 5 basis points. Its 10-year CD remains the overall rate leader with a 3.25% APY. SACU has been cutting this rate almost every other week. In July the yield had been 3.55%.

There was only one addition to the local list this week, and it's another Texas credit union. Texas seems to have more than its share of CD deals. This new one is at Generations Federal Credit Union in San Antonio. Its offering a special 1.50% APY CD with terms from 18 to 21 months.

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 were recently highlighted by the deposit agreement change at Ally. The risks have also been seen at credit unions which have raised the early withdrawal penalties on existing CDs. I have more details in this 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 October 26, 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
9 Comments.
Comment #1 by Kaight posted on
Kaight
In my view "Raise Your Rate" (RYR) CDs have never been attractive.  It is too easy for the bank or CU to circumvent need to raise rates on existing CDs.  Here is just one example of how it would work; there are many, many variations on this theme:

You buy a three year RYR CD today at a slightly reduced rate . . supposedly because the CD offers you prospects for a higher rate in future if rates rise in general.

Time passes.

Down the line rates do rise in general.  But instead of boosting its three year rate, the bank or CU offers new depositors a "37 month special" rate.  It's a high rate for virtually the same term as your three year CD.  But it's not a three year CD so your RYR benefit does not apply.

RYR CDs are not for me.  There are too many ways for the bank or CU to "cheat".

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Comment #2 by Anonymous posted on
Anonymous
Kaight - Although I have a couple of 'raise your rate' type of CD's, I suspect that you may be right-on in this regard and would not be at all surprised if the banks and CU's were to pull something like that. I purchased these cd's in the 'hope' of a possible higher return later in the event the early withdrawals, on cd's in general, are prohibited as rates may begin to rise and the stampede to the door begins. Although my expectations on these cd's are low, one can never tell.... 

2
Comment #3 by Hal B (anonymous) posted on
Hal B
I don't know why Ken is not posting the rates of the credit unions that he follows that are higher than those shown here. 

This is especially true for some of the ones listed above.  Someone at this organization is doing a poor job.  I know as a fact that one of the credit unions that Ken"s group is following has a 5 year 100k cd that pays higher then the Stanford without requiring you to have a checking account. 

Last week I mentioned that this post didn't have State Dept FCU listed and I note that it still isn't listed.

I wonder if it is because some are paying Ken to list and that is why the higher rates are not showing up.

1
Comment #4 by lou posted on
lou
Hal B, beside State Dept FCU, what other credit unions have higher rates and are not listed here?

1
Comment #5 by Hal B (anonymous) posted on
Hal B
State Dept is like Melrose.

Pen Air FCU for $100,000, call them to get the $100,000 rate. Ken has this credit union's rate for less than $100,000 shown at 2%

Ken should have done a better job at getting this credit unions complete rate.

 

1
Comment #6 by lou posted on
lou
Hal B, any other examples?

1
Comment #7 by Paoli2 posted on
Paoli2
Hal B:  I think Ken has certain criteria for banks and credit unions he lists.  I don't think it has anything to do with them "paying" to get listed.  In my experience, if a bank or cu has a much higher rate than what is the "going" rate at the time, it is usually in trouble and trying to lure depositors with higher rates.  I don't care how much higher a rate is, I won't touch a bank or cu which doesn't have at least a four star rating.  Maybe a 3 star if research on it proves it is in good shape in the important areas.  I appreciate the fact that Ken or whoever is doing this for him doesn't just list them according to rates but overall financial shape.  It makes my research much easier.

1
Comment #8 by Anonymous posted on
Anonymous
replying to paoli2

I checked out what hal b said and he is right and Pen Air has very good ratings from both Bauer and bankrate.  Looks like you don't know what you are saying,you just like to see your words in print.  Take a break from this blog.

3
Comment #9 by Anonymous posted on
Anonymous
Replying to Anonymous #8:  I was not referring to Pen Air but giving my opinion of what the poster said about Ken.  Who are you to decide who can post on this blog?  YOU take a break so you won't have to read MY words!  What nerve!

1