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Survey of the Best CD Rates for October 5, 2012

POSTED ON BY

CD rates held up well in this first week of October. After the new Fed stimulus that was announced last month, I was worried it might spur banks and credit unions to cut their CD rates for the new month. I'm happy to report there has been no uptick in CD rate cuts, at least for the rates that I monitor in this survey.

For CDs available nationwide, there was only one small rate cut. The all-access credit union, Northrop Grumman FCU, reduced its 7-year CD yields by 3 basis points. This lowered the Jumbo 7-year CD yield from 2.01% to 1.98% APY.

There are actually more rate hikes than rate cuts to report. Nationwide Bank increased several of its CD rates by 5 basis points. Its Jumbo 5-year CD yield is now 1.85% which isn't far behind the bank rate leader, CIT Bank, which continues to offer a 1.90% APY 5-year CD.

I added another all-access credit union with a 2% 5-year CD. I now have 5 all-access credit unions with 2% APY 5-year CDs. The new one is Communitywide Federal Credit Union in Indiana. I consider it all-access since it makes it easy to join via membership in an association. However, there's no online application. For those who don't live near a branch, the membership application has to be mailed (see my review).

For those who prefer shorter terms, I added an 18-month CD from Salem Five Direct. It recently increased its 18-month CD yield from 1.10% to 1.15% APY. This ties NexBank for the highest 18-month CD rate that's nationally available.

The 1.15% APY 18-month CD is hard to justify when we have several internet savings accounts offering 1.05% APY. The only advantage with the CDs is that you don't have to worry about a rate cut until maturity.

One of the best short-term CD deals continues to be the 11-month No Penalty CD at Ally Bank. This has a 0.95% APY. The no-penalty feature allows the customer to make this CD have any term from 7 days to 11 months.

The other good short-term CD deal is the Achiever CDs at CIT Bank. These have yields of 1.10% for a 1-year term and 1.25% for a 2-year CD. Minimum deposit is $25,000. Both of these allow the customer to make one additional deposit and one rate bump-up during the term.

Local CD Deals

There were only a few rate cuts for the local deals this week. The most significant were the rate cuts at Via Credit Union in Indiana. Both of its 4-year and 5-year CD rates fell by 20 basis points.

In addition to rate cuts, a couple of credit unions ended their CD specials. University of Iowa Community Credit Union ended its 10-month CD special, but it has added a new 16-month CD special with competitive yields ranging from 1.45% to 1.25%. The other credit union to end its CD special is Hughes Federal Credit Union in Arizona. It had been offering a special 29-month CD with a top yield of 1.51%.

I added 4 new banks and credit unions to my survey. One is a small Indiana credit union that isn't available to many people. Its name is Encompass, and I decided to include two of its CDs since the rate were so high. Its 5-year CD yield of 2.53% is the highest in the nation for a regular 5-year CD.

The other 3 new institutions that I added are all offering 5-year CDs with rates near 2%. These are S-Bank in Massachusetts, Randolph Bank & Trust Company in North Carolina and HEW Credit Union in the DC metro area. S-Bank is also offering a 2.00% APY 4-year CD.

If you aren't lucky to live near one of these institutions, you can still get a 2.00% APY 5-year CD at BBVA Compass. This isn't nationally available, but it is available to many people in market areas where Compass has branches. These are in AZ, CA, CO, NM, AL, FL and TX.

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 October 5, 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
3 Comments.
Comment #1 by Anonymous posted on
Anonymous
Same old same old, until Bernanke is at the FED, ther will be no changes.

3
Comment #2 by Alina Trimble (anonymous) posted on
Alina Trimble
The Fed does move faster than molasses and interest rates move accordingly--tell me something i don't know.

5
Comment #3 by Anonymous posted on
Anonymous
As of Nov 9: For CIT Bank Achiever CD account holders, the Bank now reserves the right to limit the additional deposit to your Achiever account to $250,000.

1