Bank5 Connect has just come out with a special rate on its 2-year add-on CD that it calls the 24-month Investment CD. The new special rate is 1.25% APY which is 10 basis points higher than the old standard rate. Minimum deposit is $500. It allows additional deposits of any amount at anytime during the term of the CD. You can also set up automatic deposits from your Bank5 Connect’s checking or savings account into this Investment CD.
This special rate is accurate as of 10/30/2013. It’s a limited time offer. Visit this Bank5 Connect CD page to apply for this offer.
This special rate is very competitive for a standard 2-year CD. It becomes an exceptional deal when you factor in the add-on deposit feature. An add-on CD is useful as protection against an interest rate environment in which rates are falling or are flat. The small minimum deposit makes it even more useful. If you want to protect yourself against falling rates, just open the Investment CD with at least $500. If rates happen to go up, just don’t add to the CD. With a small initial deposit, you have very little interest to lose (compared to what you could have earned with higher rates). However, if rates do fall or even if they remain about the same, you’ll find the add-on CD to be very attractive.
The accounts are available nationwide with the exception of residents in Massachusetts and Rhode Island (BankFive’s market area).
To open the bank’s CD, visit this Bank5 Connect CD page and click on the button that says “Open an Account Today”.
This will take you to an online application that’s powered by Andera, a company that powers the online applications of many banks and credit unions. The account funding can be done with an ACH transfer from your existing bank account. I was told that the maximum amount for ACH funding of a CD account is $500,000. You can also fund CD accounts by mailing the bank a check.
The online application currently doesn’t allow you to designate beneficiaries. However, they do have a process for adding a beneficiary for existing accounts. After the account is opened, you can call Bank5 Connect, and they can walk you through the process.
Regarding trust accounts, at this time Bank5 Connect accounts cannot be opened as a Trust, only individual or joint personal accounts.
Bank5 Connect is an internet-only division of BankFive. It was launched in July 2013. BankFive is a community bank headquartered in Fall River, Massachusetts. It operates 12 branches in southeastern Massachusetts.
Bank5 Connect customers are insured by the FDIC to at least $250,000, and all deposits above the FDIC insurance amounts are insured by the DIF which is a private insurance fund that insures all deposits above FDIC limits at Massachusetts-chartered savings banks.
BankFive has an overall health grade at DepositAccounts.com of B+ with a Texas ratio of 9.07% (above average) based on June 2013 data. The bank has been a FDIC member since 1981 (FDIC Certificate # 23286).
How This CD Rate Compares
Other than Bank5 Connect, the highest 2-year CD rate at an internet bank is 1.20% APY at CIT Bank and GE Capital Retail Bank. CIT Bank’s 2-year Achiever CD also has an add-on deposit feature, but it allows only one additional deposit during the term. Another downside is its high minimum deposit of $25,000.
There are three all-access credit unions that are offering higher rates on 24-month CDs. First is a special 24-month CD with a 1.50% APY at First Flight FCU. Connexus Credit Union’s 24-month CD has a 1.30% APY, but this requires an active checking account. Finally, PenFed has a 24-month CD with a 1.26% APY. These rates are accurate as 10/30/2013.
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.