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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 September 20, 2013

POSTED ON BY

Treasury yields fell quite a bit after the Fed surprised the market with its postponement of tapering. The expectation that tapering was going to begin this year was responsible for much of the higher Treasury yields and higher long-term CD rates that we have seen. There are still two more Fed meetings scheduled for this year in which tapering may begin, but it’s far from certain that will be the case. If more delays occur, CD rate hikes may end and be replaced with rate cuts.

This was a quiet week for the nationally available CDs on my list. The only rate change was at GE Capital Retail Bank which raised its 4-year Jumbo CD yield from 1.60% to 1.65%. This is now tied with Intervest National Bank and iGObanking.com for the top 4-year rate at a bank. Melrose Credit Union and Andrews Federal Credit Union both have a 1.71% APY 4-year CD which continue to be tied for the 4-year CD top spot.

GE Capital Retail Bank is also offering brokered CDs, and its 7-year and 10-year non-callable CDs that were being offered from Fidelity had the highest rates. The 10-year CD rate of 3.25% didn’t change this week, but the top non-callable 7-year CD rate fell from 2.75% to 2.65%. These rates continue to be on top for the nationally available CDs with terms over 5 years.

The number of banks offering nationally available 2% 5-year CDs remains at five. The highest rate continues to be at iGObanking.com with a 2.05% APY.

Local CD Deals

Most of the rate changes were positive for savers. The only exception was First Republic Bank which has branches in parts of CA, CT, FL, MA, NY and OR. Its 6-year CD rate fell by 5 bps. This is still a good deal if the saver has a checking relationship. In that case the yield is 2.25% (2.00% w/o checking relationship). The bank’s 5-year and 4-year CD rates fell by much more, and they’re no longer listed below.

Two new noteworthy CDs on the list are a 2.25% APY 5-year CD (with a checking relationship) from BBVA Compass and a 2.25% APY 5-year CD from MidFirst Direct. Neither CD is nationwide, but these CDs are available in several states.

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.

If you want to compare the effective yields of other CDs after the early withdrawal penalties, please refer to our CD early withdrawal penalty calculator.

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 September 20, 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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Comments
23 Comments.
Comment #1 by QED posted on
QED
Agree totally tapering postponement was a big factor.  Also see as a major factor two words:  Janet Yellen

4
Comment #2 by Anonymous posted on
Anonymous
Just bought my first brokered CD and in less than 24 hours the principal was down $1,000! That's more volatility than many stocks! I know at maturity I'll get back all my principal back, and I do plan to hold it til then, but boy is this a different experience than looking at my boring bank statement each month! Geez are there any simple, stable and reasonable returns these days? NO!

2
Comment #3 by Anonymous posted on
Anonymous
You probably bought a new cd that was offered at par but in actuality it was already below par, now if you bought in the secondary mkt that drop would have already been in there.

I hate that about brokered CDs if rates go down your CD will show a gain but I wouldn't count on rates going down and staying down, a regular non-brokered CD you would never see the moves so my suggestion is don't look...hehe

2
Comment #4 by Anonymous posted on
Anonymous
#3 Yeah the Broker actually told me the CD will show a different value each evening. Interestingly even if I sold at a discount today the adjusted interest rate would still be much better than any regular CD out there.

1
Comment #5 by Anonymous posted on
Anonymous
Sounds like a muni bond.  If you hold to maturity you get all of your principle.  Some bonds actually sell higher than par.  I have a muni that is paying 5.75%.  It sells above par meaning more than the initial principle.  Muni bond prices fluctuate daily.  Some of my munis are under par (principle) if I  to sell before maturity. 

1
Comment #6 by Anonymous posted on
Anonymous
On my Vanguard brokerage the brokered CD's are listed like bonds as are the complete descriptions

1
Comment #7 by Anonymous posted on
Anonymous
Does anyone know if state income taxes are due on the interest to the state where the issuing Bank is located when buying brokered CD and the buyer lives in another state?

1
Comment #8 by paoli2 posted on
paoli2
#7  I have dealt with two well known brokerages for many years and all I have ever had to be concerned with is what is on the 1099 INT and it is usually sent by the brokerage the CD is purchased from.  I have never gotten one from any of the multiple banks the CDs are for.  You have to remember that you are not getting a seperate CD from a specific bank even tho the CD has a bank's name.  Once the brokerage buys their chunck from that bank and you buy a part of it from your brokerage, the interest is their responsibility to report to you on their 1099 INT.  If anyone else has ever had it done differently, they must be using different brokerages.  Just make sure each year you get that 1099 INT from the brokerage if you know you got a certain amount of interest from the purchase which you certainly should have.  All interest reported to you on your 1099 INT or DIVs must be reported on your tax report of course.

2
Comment #9 by Anonymous posted on
Anonymous
Paoli2...  Thanks for you answering my question.  But I want to know if I would be responsible for income tax on the interest to the state where the brokered cd was issued and the state I live in.

1
Comment #10 by Anonymous posted on
Anonymous
Dividends and interest are generally taxed in the state of your residence, and not in the state of the paying entity. This would apply to dividends you receive from companies like Walmart, IBM, Chevron, etc, as well as interest you receive from out of state banks, credit unions, etc , whether they be brokered or not. Even if they were to be taxed in two states, you would get a credit on your home state return for any income taxes paid to another state.

4
Comment #11 by Anonymous posted on
Anonymous
I may purchase a brokered CD tomorrow.  Have to look what the brokerage fee is.  WHat does Fidelity charge?

1
Comment #12 by Anonymous posted on
Anonymous
Fidelity does not charge a separate CD purchase fee as such, rather it is built into the stated rate that you will receive....and I am referring to the newly issued CD's.

1
Comment #13 by Anonymous posted on
Anonymous
I own a brokered cd .... if rates go up your cd will lose value if rates go down your cd will gain value. Just like if rates went up and you wanted to close a regular cd early you would pay a penalty, difference with the bokered cd there is no set early withdrawal fee it can be a much bigger loss if you have to sell it early. Good news is if the rates go down you can sell it at a profit if you want. I have owned brokered CDs and do now... the main idea is to hold until maturity just like a bond or a muni-bond.

2
Comment #14 by Anonymous posted on
Anonymous
Also, If I were to put money into a brokered cd I would make sure I plan to keep it to maturity because it looks as if this bond market might just turn on our friend Ben and his cohorts.

2
Comment #15 by scottj posted on
scottj
I don't get that brokered CD stuff at all? Have a large CD maturing tomorrow, going to pick up check in morning and go straight to Institution for Savings and do another 30 month 2% CD. Seems to best option right now as I still feel rates will go up withing the next 2 years and don't want to lock in any 5 year CDs 

1
Comment #16 by Anonymous posted on
Anonymous
where did u get the 30 month CD @ 2 % ?

I'm also needing to have my IRA CD renewed this coming week.

Thank you.

1
Comment #18 by Anonymous posted on
Anonymous
Just got a brokered CD from Vanguard. Non Callable GE retail bank.  No fees.  This is part of my ladder.  No intentions of early withdrawl

1
Comment #20 by Anonymous posted on
Anonymous
Thninking a "barbell" type ladder using 2 and 5 yr cds makes more sense now than a striaght 5 yr ladder.Thoughts??

2
Comment #21 by scottj posted on
scottj
I would not go with those 2% 5 year CDs. While I know the 30 month 2% ones I just got  are local I think it shows if you are patient these deals will pop up in your area or we will see deals like we saw from USalliance, 2% 24 month, that anyone could get 

2
Comment #22 by Anonymous posted on
Anonymous
sottj,  I hope your right.  It seems like the local banks and CU in my area have formed a alliance to only offer next to 0%.  It doesn't matter where I go, account balance, etc, they just won't pay anything.

2
Comment #23 by Hoody posted on
Hoody
sounds and looks like my area #22

1