Every now and then a large bank offers a decent rate on a promotional CD. The latest large bank to offer this type of deal is Regions Bank. It’s advertising two promotional CDs. The best one is a 70-month CD with a 2.00% APY. The other one is a 40-month CD with a 1.10% APY. Only the 40-month iCD is also available in an IRA. Minimum deposit is $10,000, and the maximum is $1 million. A checking account is required, and it must remain open during the entire term of the CD. These CDs are listed in this Regions promotional page as of 7/7/2014.
I found a few of the CD details at this Regions CD page. One detail not mentioned is the early withdrawal penalty. The only thing the small print says is "Substantial penalty may apply for early withdrawal. See account disclosure for details." I used Regions online chat service, and I was referred to their CD specialists who are available at 1-866-231-0152. I called this number, and I was told the early withdrawal penalty of this 70-month CD is equal to 6 months of simple interest. That’s a very reasonable penalty for a CD that has a term of almost 6 years. I would feel better if I could confirm this in a CD disclosure. If you are able to confirm this penalty or have been told something else, please leave a comment.
Checking Account Required
The checking account requirement is common for these promotional CDs. You’ll have to watch out for monthly fees. All of the checking accounts have potential monthly fees unless you qualify to have the fees waived. One of the checking accounts is the LifeGreen Checking, and one way to avoid an $8 monthly fee is by maintaining a $1,500 minimum average monthly statement balance.
If you do open this CD along with one of these checking accounts, make sure you monitor the checking account. It’s possible that Regions will change what’s required to avoid a monthly fee. That happened in 2011 with the Regions Preferred Plus checking account. DA member Cumulus warned us about this in the DA forum.
Branch Visit Required
According to the customer service representative, to open these promotional CDs, you must visit one of Regions’ branches.
Regions Bank branches are located in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas.
Regions is a large regional bank with over $117 billion in assets. The bank has an overall health grade at DepositAccounts.com of a B+ with a Texas ratio of 8.57% (excellent) based on March 2014 data. Please refer to our financial overview of Regions Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 12368).
How This Compares
If you prefer to bank at a brick-and-mortar bank, BBVA Compass is another large regional bank that’s offering a 2% CD. Its promotional CD has a 5-year term, and you can get an extra 10 basis points with the necessary checking relationship. These rates are accurate as of 7/7/2014.