More people are picking up on the value of long-term CDs with low early withdrawal penalties. This article was just published
at the MoneyWatch.com blog on the deal at Discover Bank. Discover's 10-year CD currently pays 3.50% APY and the early withdrawal penalty is 9 months of interest. As the article describes this can give you the best of both worlds. I discussed a little about this in my recent Discover Bank review
As I mentioned last week
, Pentagon Federal Credit Union also has a good long-term CD deal (3.75% APY 7-year). However, its early withdrawal penalty is 12 months of interest.
The best deal continues to be at Ally Bank
which only has a 60-day penalty on its 5-year CD. HOWEVER, the rate continues to slowly drop. It just fell from 2.94% to 2.89% APY today.