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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 March 8, 2013

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With the good job news today driving up Treasury yields, short-term CDs may be looking more appealing than long-term CDs. Unfortunately, short-term CDs don't offer much advantage over internet savings accounts. One example is Ally Bank's 11-month No Penalty CD. The no-penalty feature allows this CD to be made into any term from 7 days to 11 months. So it's fair to compare its rate with 3-, 6- and 9-month CD rates. When it's compared to these CDs, its rates are very competitive. However, the No Penalty CD rate is less than Ally's savings account rate, and the No Penalty CD rate went down again today. On March 1st the rate fell by 2 bps, and today it fell by 1 bps to 0.85%. Ally's No Penalty CD, like most short-term CDs in today's environment, doesn't offer enough rate advantage over online savings accounts.

Due to Ally's 11-month No Penalty CD, there doesn't seem to be a reason to choose Ally's 3-, 6- or 9-month CD. All three have much lower rates than the No Penalty CD. However, there is one reason to get one of these CDs, and I described that reason in my new Ally Bank loyalty rewards review.

If you don't want a long-term CD but you want a rate significantly higher than today's internet money market rates, you'll need at least a 3-year term. PenFed still offers the best deal for 3-year CDs with a 1.60% APY. This is 25 bps less than last month, but it's still the best without any hassles. You can get 1.75% APY at Connexus Credit Union, but this requires an active checking account with direct deposit.

The only noteworthy rate change for nationally available long-term CDs this week was at Nationwide Bank which cut its 5-year CD rates by 5 bps. Its Jumbo 5-year CD now has a 1.80% APY, and its standard 5-year CD has a 1.75% APY.

The best long-term CD deal continues to be the 5-year CD at Mountain America Credit Union which has a 2.00% APY. The best deal at a bank continues to be 1.85% APY at CIT Bank and at Barclays. I consider Barclays to be the better deal since it has a lower minimum deposit, a smoother online application and a smaller early withdrawal penalty.

Local CD Deals

There were a handful of rate cuts for the local deals. One of the past rate leaders, San Antonio Federal Credit Union (SACU), had another rate cut this week. All of its CD rates fell by 5 bps. Earlier this year its 10-year CD yield had been 3.00%. Now it's down to 2.50%.

I only added one bank to the local deals today. The deal at this bank isn't a CD. It's a savings account, but its rate is guaranteed to last through 2013. Due to the rate guarantee, I consider it like a short-term CD but with extra liquidity. The deal is at PacTrust Bank in Southern California. Its PacTrust One savings account has a 1.25% APY for a $250K minimum balance and a 1.00% APY for balances of $100K to $250K. These rates are guaranteed through 2013. I consider this a local deal that requires a branch visit. However, some readers have reported being able to have the bank agree to open this account without a branch visit (see my post).

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 March 8, 2013

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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