Live Oak Bank is offering very competitive rates on its money market account and on its CDs. The money market account is a tiered-rate account with a top rate of 1.35% APY for balances of at least $250K. The rate falls to 1.25% APY for $100K, 1.10% APY for $25K and 1.00% APY for lower balances. Minimum deposit to open an account is $5,000.
The bank's CD rates are also very competitive. The three best are the 2.00% APY for 4 years, 1.85% APY for 3 years and 1.75% APY for 2 years. Minimum deposit is $25,000, and the maximum is $250,000 per account.
These money market and CD rates are listed at the bank's online banking page as of 2/28/2013.
According to the small print "New accounts are available to NC residents, deposit customers, customers in our business trade lines and their referrals." So if you don't live in North Carolina, you're probably out of luck. You can call the bank at (877) 890-5867 for more details. A reader gave a review of this bank on Monday. According to the reader the "bank seems understaffed for online customers and does not give clear answers to questions."
It's a small bank with one branch located in Wilmington, NC.
According to the bank's about page, "Live Oak Bank was founded in 2007 with one goal: provide business loans to small, independent businesspeople in niche industries. [...] Today, Live Oak Bank is the second largest originator of small business loans in the country. Our default rate with our customers remains one of the lowest in the nation."
The bank does look to be in good financial shape. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 0.56% (excellent) based on September 2012 data. Please refer to our financial overview of Live Oak Bank for more details. The bank has been a FDIC member since 2008 (FDIC Certificate # 58665).
How These Money Market and CD Rates Compare
The highest money market rate that's nationally available is 1.15% APY at Connexus Credit Union, but this requires an active checking account and a $100K minimum. Without a checking requirement or balance cap, the highest rate is 1.05% APY at My Banking Direct.
Live Oak Bank CD rates are even higher than PenFed's CD rates (although PenFed CD rates will be falling in March). PenFed is currently offering 1.60% APY for a 2 year term and 1.85% APY for 3 and 4 year terms.
These rates are accurate as of 2/28/2013.