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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 December 22, 2012

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Survey of the Best CD Rates for December 22, 2012

Three internet banks cut their CD rates this week. AloStar Bank of Commerce reduced its 2-year CD yield from 1.26% to 1.01%, and it reduced its 1-year CD yield from 1.06% to 0.85%. These large rate cuts took AloStar far below the rate leaders. Consequently, I removed AloStar from my list. AloStar's 1-year and 2-year CD rates had been near the top for the last few months. AloStar Bank of Commerce used to be Nexity Bank. In April 2011, Nexity Bank failed, and the FDIC arranged for the newly-chartered bank, AloStar Bank of Commerce, to assume all of Nexity's deposits.

The other internet bank that reduced its CD rates this week is Discover Bank. Its 3-year, 4-year and 5-year CD rates fell by 5 bps. These new rates remain fairly competitive, so I've kept these Discover CDs on my list. Fortunately, Discover Bank's 7-year and 10-year CD rates remain the same. Discover continues to be the only internet bank with a 2.00% APY CD (but it has a very long term of 10 years).

The third internet bank with rate cuts is the new internet bank, Barclays. Its 2-year CD yield went down from 1.25% to 1.10%. Its other CD rates remained the same, including its competitive 5-year CD which has a 1.70% APY. If you are considering Ally Bank for its 5-year CDs which have a small early withdrawal penalty of 60 days of interest, you might also want to consider this Barclays 5-year CD. The rate is 9 bps higher, and the early withdrawal penalty is also small, 90 days of interest.

The best nationally available CD deals continue to be from all-access credit unions.

The best short-term CD deal is still at Digital Federal Credit Union (DCU) which has a special 8-month CD with a 1.50% APY. This is far better than any short-term CD rate that's available from internet banks. Ally Bank's 11-month No Penalty CD with a 0.95% APY is the best internet bank deal, but it doesn't come close to this special DCU CD.

The best mid-term CD deals are still at Pentagon Federal Credit Union (PenFed) with a 1.50% APY 2-year CD and a 1.75% APY 3-year CD. The only internet bank that comes close to these is Salem Five Direct which still has a 1.50% APY 30-month CD.

The best long-term CD deal continues to be at Pen Air Federal Credit Union which has a Jumbo 5-year CD with a 2.20% APY and a regular 5-year CD with a 2.00% APY. A few other all-access credit unions also offer CDs with a 2.00% APY.

Local CD Deals

For CDs that are only available locally, a few institutions ended their CD specials. One is Superior Choice Credit Union in Wisconsin which is no longer listing its 18-month 1.25% CD special. Another one is Community Trust Bank which has branches in Texas, Louisiana and Mississippi. It's no longer listing its special 1.40% 13-month CD special.

On the plus side, LOMTO Federal Credit Union in New York City raised its 1-year CD yield from 1.00% to 1.20%. Its 2-year and 3-year CD rates also went up. Not everyone in NYC may be able to qualify for membership. NYC residents unable to qualify can get CD deals almost this good at Doral Bank NY.

I added three new institutions to my local CD list. Entertainment Credit Union is offering a special 1.00% APY 4-month CD. People from the Los Angeles metro area can qualify for this deal. This rate may sound low, but it's rare to find rates near 1.00% for CD terms under 6 months.

Another new institution is East River Bank in Philadelphia. It has a special 14-month CD with a 1.25% APY. If you compare this with 12-month CDs, the rate is very competitive.

The third addition is American United Family of Credit Unions which is open to residents of Salt Lake County Utah. It's offering a 2.15% APY 5-year Jumbo CD. I replaced HeritageWest Credit Union's 2.02% APY 5-year CD with this one since both credit unions serve a similar area of Utah. One advantage of HeritageWest is that they offer this 2.02% APY for terms from 60 months to 72 months. So I added this to my local 6-plus-year CD list which no longer includes many CDs. Even for the very long terms, it's hard to find CD rates over 2.00%.

Finally, BBVA Compass continues to offer its CD specials which includes a 2.00% APY 5-year CD and a 1.25% APY 2-year CD. An extra 10 bps is added to the CD rates if the customer opens a CompassLink Checking. This offer has been available at BBVA Compass for most of 2012. It's rare to find a large bank that has offered such a good deal for this long. Unfortunately, it's not nationally available. BBVA Compass requires new customers to reside near one of the bank's branches. These are located in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas.

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 December 22, 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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