Maryland Deposit Account Rates and Deals

Pentagon Federal Credit Union (PenFed) is yet another rate leader to make cuts to its CD rates. Economic data of a slowing economy and falling Treasury yields last month had pointed to a deposit rate environment that would become worse. Unfortunately, that did happen as we saw last week when several CD rate leaders including Alliant Credit Union, Melrose Credit Union, Ally Bank and Discover Bank reduced their CD rates. In this new month PenFed joins this group with its own CD rate cuts. Below are the new CD yields for September 2010. I've noted the old yields in parenthesis.

• 3.49% APY 7-year CD (was 3.75%)
• 2.75% APY 5-year CD (was 3.00%)
• 2.50% APY 4-year CD (was 2.78%)
• 2.00% APY 3-year CD (was 2.25%)
• 1.50% APY 2-year CD (was 1.75%)
• 1.26% APY 1-year CD (was 1.31%)

Minimum deposit is $1,000. The rates are also available in an IRA. These yields are listed in PenFed's Money Market Certificates page as of 9/01/2010. Even though PenFed typically maintains CD rates through the month, they no longer guarantee it.

Below is an updated early withdrawal yield table that shows approximate average yields you would receive if you close these CDs early. It allows you to determine if it makes more sense to buy a long-term CD rather than a short-term CD. I also included Ally Bank's 5-year CD which has a 2.74% APY as of 9/01/2010 with only a 60-day early withdrawal penalty.

Approximate Yields After Early Withdrawal Penalties

As you can see from the above table, if you think you're going to leave the CD untouched for at least 3 years, PenFed's 7-year CD is better than its other CD terms. Ally Bank is still the best deal if you think it's likely you'll break the CD before 4 years (either because you'll need the money or if interest rates shoot up). At year 4, PenFed's 7-year CD becomes the best deal. For more details about PenFed CDs, please refer to my PenFed CD review. For more details about Ally Bank's CDs and early withdrawal penalty, please refer to my Ally Bank CD review.

PenFed's Certificate Reservation Program

I logged into my PenFed account, and I checked the status of PenFed's certificate reservation program. I first reported on this program on August 19th. It allows select PenFed members to reserve CDs in January 2011. The best is a 5.00% APY 10-year CD. As I mentioned, I was informed that the program was only open to PenFed members who had CDs maturing in October. However, several readers who were not in the select group have commented in my post that they have been able to reserve these CDs online. I have not been able to find out if there's any chance that PenFed will not honor these reservations.

PenFed had allocated $240 million of funds for this program. As of this morning (9/01/10), there is $186.68 million left according to PenFed's Certificate Reservations page (available when you're logged in). I'm glad to see the funds are lasting. Perhaps most members are not jumping on this deal because they believe these CD terms are too long.

PenFed Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (NMFA). Please refer to How to Join Overview Page for details. Joining NMFA and PenFed can be done at the same time all online. The yearly membership for NMFA is $20, but your membership in the association does not need to be maintained to continue as a PenFed member.

Branch Locations

Accounts can be opened online, but for those who prefer branches, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

Financial/NCUA Info

PenFed's ratings for safety and soundness continue to be strong: 4 stars (excellent) at BauerFinancial, 4 stars (sound) at Bankrate.com and an overall health score of 4 out of 5 at DepositAccounts.com (see our financial overview of Pentagon FCU). These ratings are based on March 2010 data except for DepositAccounts.com which is based on June 2010 data. PenFed is one of the largest credit unions in the US with $14.33 billion in assets and $11.62 billion in deposits. It's federally insured by the NCUA (Charter # 227).

Searching for the Best CD Rates

To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com:

• Best CD rates
• Best IRA CD rates

CFG Community Bank is offering some very competitive CD specials, and it also has competitive rates for its regular CDs. One of the CD specials is a 9-month no-penalty CD with a 1.70% APY. The no-penalty feature allows you to make a withdrawal (partial or closing) one time with no penalty. Minimum deposit is $500. Another special is a 7-month CD with a 1.60% APY, but I don't know why one would choose this over the 9-month CD. For those looking for a longer term CD, they also have a 24-month Flex CD that has a 2.10% APY (I didn't get the details of the Flex feature). For the regular CDs, some of the competitive rates include a 1.55% APY 12-month CD, a 1.72% APY 18-month CD and a 2.10% APY 30-month CD. These rates are not listed at the bank's website. A reader emailed me about these rates, and I contacted the bank yesterday for more details. According to the bank rep, these rates should be good through Monday 8/16/2010.

A branch visit appears to be required to open an account. Branches are located in the Maryland cities of Baltimore, Towson and Annapolis.

The bank's ratings for safety and soundness are above average: 4 stars (sound) at Bankrate.com, 3 stars (adequate) at BauerFinancial and an overall health score of 4 out of 5 at DepositAccounts.com (see our financial overview of CFG Community Bank). These ratings are based on 3/31/10 financial data. The bank has been a FDIC member since 1997 (FDIC Certificate # 34294).

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

PNC Bank has another $100 bonus for opening a checking account. It's not as good as the $125 July bonus, but this $100 bonus appears to be the best PNC bonus currently available. Here's the direct link to the promotion. It requires direct deposit of at least $400 per month along with 10 check card purchases. According to the small print, the checking account must be opened via the online application by 9/30/2010. Here's some of the small print as listed in the promo page with my highlights of the important things to note:

Offer available only to new PNC customers. New personal checking account must be opened via online application between 8/01/2010 and 9/30/2010. To qualify for the $100 reward a Qualifying Direct Deposit must be received and at least 10 check card purchases made with your PNC Visa Check Card must be posted to the eligible account within 60 days of account opening. Your checking account must remain open in order for you to receive the $100 reward, which will be credited to the eligible account within 60 days after all conditions have been met and will be identified as "Promo Reward Cash Trans" on your monthly statement. A "Qualifying Direct Deposit" is defined as a recurring direct deposit of a paycheck, pension, social security or other regular monthly payment electronically deposited into a Free, Performance, Performance Select Checking account, or the Spend account for Virtual Wallet (each an "Eligible Account") on a recurring month-to-month basis. The amount of each recurring Direct Deposit must be at least $400. The recurring Direct Deposits must be made by an employer or an outside agency. Credit card cash advance transfers, transfers from one account to another or deposits made at a branch or ATM do not qualify as Qualifying Direct Deposits. Offer only available to new PNC Bank checking account customers who open the Eligible Account using the on-line application. Offer only available to residents of DC, DE, FL, IL, IN, KY, MD, MI, MO, NJ, OH, PA, VA and WI. Offer may be extended, modified or discontinued at any time and may vary by market. This is an online offer that is not available through the branch.

PNC Bank's Virtual Wallet

One of the checking accounts that can qualify for the bonus is the Spend Account which is part of PNC's Virtual Wallet. Another part of Virtual Wallet is the Grow Account which is a savings account that pays 1.10% APY on balances up to $25K as of 8/8/2010. Please see my PNC Virtual Wallet review for more details.

PNC Q2 Results and Its Deposit Strategy

PNC released its second quarter results in late July. It reported a better-than-expected second-quarter profit. One thing I found interesting in PNC's press release was the description of its plans to grow checking account deposits while shrinking CD deposits. Here's an excerpt:

Average deposits of $182 billion declined $.8 billion compared with the first quarter of 2010 and $10.4 billion, or 5 percent, compared with the second quarter of 2009. In both comparisons, average deposits decreased due to the continued reduction of high-cost and primarily nonrelationship certificates of deposit and other time deposits, partially offset by growth in average transaction deposits. This was consistent with PNC’s overall deposit strategy focused on growing demand and other transaction deposits as a lower-cost funding source and the cornerstone product of customer relationships.

You can see PNC executing this strategy with these checking account bonuses and its very-low CD rates (one example: 1.50% 5-year CD in Florida).

The conversion of National City branches was also mentioned in the press release:

PNC successfully completed the National City conversion of 16 million accounts, 6 million customers and 1,300 branches in nine states.

I know many readers will miss those National City CD specials that were so popular a couple of years ago.

PNC Bank has been a FDIC member since 1934 (FDIC Certificate # 6384).

Other Bank Bonuses

To find other bonus deals at other banks, please refer to my bank bonus page which has all of my recent bank bonus blog posts. Some additional bonuses are also listed in the checking account deals section of the discussion forum.

Pentagon Federal Credit Union came out with its August CD and IRA CD rates. Rates for most terms stayed the same. However, the 7-year CD rate increased from 3.51% APY to 3.75% APY which makes this one of the best nationwide CD rates. The 2-year CD rate also increased, but the new rate of 1.75% APY is still not a top rate. Minimum deposit is $1,000. These rates are listed in the PenFed's Money Market Certificates page as of 8/02/2010. PenFed typically maintains its CD rates through the month, but note that there's no guarantee.

The main downside with this 7-year CD is a hefty early withdrawal penalty. According to the CD application (disclosure on 2nd page), the early withdrawal penalty for the 7-year certificate is:

a) If redeemed within 365 days of the issue date or any renewal date, all dividends will be forfeited;
b) If redeemed thereafter, but prior to the maturity date, dividends for the most recent 365 days will be forfeited.

In short, the penalty is 1-year of interest for an early withdrawal after the first year. You lose all interest for an early withdrawal before the first year. The penalty for the shorter terms is only 180 days of interest.

Special Early Withdrawal Feature for PenFed IRA CDs

PenFed has a nice feature for its IRA CDs. If you have reached the age of 59½, you can avoid an early withdrawal penalty if you only take a partial withdrawal. A partial withdrawal just requires that you leave at least the minimum balance of $1,000 in the IRA CD. So for large IRA CDs, this effectively eliminates the early withdrawal penalty. I described the details of this feature in this PenFed IRA CD review.

Do Long-Term CDs Make Sense?

It might seem unwise to lock into a long-term CD when rates are so low. If rates do go up in the next year or two, you may be able to get much higher rates. So it may seem better to stay in a savings account or short-term CDs until rates improve. The risk is that if rates don't go up, you'll earn much less interest than what you could have earned with the long-term CD. You also have to take into account the early withdrawal penalty. If rates go up substantially, you can break the CD with the early withdrawal penalty and reinvest the money into higher paying accounts. You could make more money in this approach than you could if you kept your money in a savings account or short-term CDs.

Below is a comparison of the approximate annualized yields that would result if you closed PenFed's 7-year CD at year 1, 2 and up to year 6. The yield is approximated by removing one year of interest and then computing the new effective average yield for that time period. The yield at year 2 is easy to compute since you essentially cut the amount of interest that you earn in half. So you just divide 3.75% by 2 which is approximately 1.88% APY. As you can see, this is a pretty competitive yield for 2-year CDs.

For comparison, I included PenFed's 5-year CD and Ally Bank's 5-year CD. PenFed's 5-year CD's early withdrawal penalty is 180 days of interest (only half of the 7-year CD penalty). Ally Bank's 5-year CD has only a 60-day interest penalty. The rates are as of 8/02/2010.

Average Yields After Early Withdrawal Penalties

As you can see in the table above, you will earn more with the 5-year CDs if you take an early withdrawal before 3 years. After 3 years, the 7-year CD starts to outperform the PenFed 5-year CD, and after 4 years, the 7-year CD starts to outperform Ally's 5-year CD. Fore more details about Ally Bank's CDs and early withdrawal penalty, please refer to my Ally Bank CD review.

PenFed Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (NMFA). Please refer to How to Join Overview Page for details. Joining NMFA and PenFed can be done at the same time all online. The yearly membership for NMFA is $20, but your membership in the association does not need to be maintained to continue as a PenFed member.

Branch Locations

Accounts can be opened online, but for those who prefer branches, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

Financial/NCUA Info

PenFed's ratings for safety and soundness continue to be strong: 4 stars (excellent) at BauerFinancial, 4 stars (sound) at Bankrate.com and an overall health score of 4 out of 5 at DepositAccounts.com (see our financial overview of Pentagon FCU). PenFed is one of the largest credit unions in the US with $14.2 billion in assets and $11.51 billion in deposits. It's federally insured by the NCUA (Charter # 227).

Northwest Savings Bank is offering a $100 bonus for opening a new Switch Checking Account. Details of this promotion are listed in the bank's promotions page as of 7/29/2010. Some important details include:

• $100 minimum opening deposit
• To qualify, customers must initiate a monthly direct deposit of $100 or more
• Switch Rewards, Switch Free, or Switch Interest Checking Account qualify
• $100 credit will be posted to the account within 7 days of the first verified Direct Deposit
• $100 credit is subject to a 1099 reporting

A reader in a previous Northwest Savings post mentioned that his $100 opening deposit triggered the bonus. So a real direct deposit may not be required. As usual your miles may vary.

Here's a summary of the checking accounts. The GO! Rewards Checking is a free checking account. It's not a high-yield reward checking account. The rewards are based on the amount you spend with the debit card. Another perk with this account is that you earn 10,000 points when you open the account. Note, online bill pay is free only if you pay at least one bill per month.

Refer-a-Friend Deal

The bank also has a good refer-a-friend deal in which you can earn $50 for each friend who opens a qualifying account. Plus, you can get a $10 Apple iTunes gift card just for inviting 5 or more friends, and there's the chance to win an iPod nano.

Only for Those in Certain Areas of FL, MD, NY, OH & PA

There's an online application link at the promotion page. However, on the first page of the application it states:

All residents of the United States that are within the Northwest market area are welcome to apply for an account.

Branches are located in parts of Florida, Maryland, New York, Ohio and Pennsylvania.

Decent CD Rates

The bank also has some decent CD rates. They're not good enough for a separate post, but I wanted to mention them for those who may live near one of their branches. You have to enter your zip code to see the rate table so rates may vary by location. For South Florida, the best rates include a 3.00% APY 6-year CD, a 2.80% APY 5-year CD, a 2.10% APY 3-year CD and a 1.50% APY 18-month CD. These were listed at the bank's South Florida rate sheet as of 7/29/2010.

The bank's ratings for safety and soundness are strong. At DepositAccounts.com we give the bank an overall health score of 5 out of 5 (see our financial overview for Northwest Savings Bank). The bank has been a FDIC member since 1939 (FDIC Certificate # 28178).

Other Bank Bonuses

To find other bonus deals, please refer to my bank bonus page which has all of my recent bank bonus posts.

Community Bank of Tri-County is offering a 13-month special CD with a 1.70% APY. It has a no-penalty feature that allows a one-time penalty free withdrawal which can come in handy if interest rates rise in the next year. The downside is that it requires a checking account, but I was told any personal checking account qualifies. Minimum CD deposit is $500. There's also a special 30-month CD with a 2.20% APY. It has a one-time bump up rate option. The bank also has a competitive 18-month CD with a 2.05% APY. This is just a regular CD without any special feature. However, the IRA version of this CD allows additional deposits. These rates are listed in the bank's rates page as of 7/21/2010.

A branch visit is required to open an account. Branches are located in Southern Maryland.

The bank's rating for safety and soundness are above average: 5 stars (superior) at BauerFinancial, 3 stars (performing) at Bankrate.com and an overall health score of 3 out of 5 at DepositAccounts.com (see our financial overview of Community Bank of Tri-County). These ratings are based on 3/31/10 data except for Bankrate which is based on 12/31/09 data. The bank has been a FDIC member since 1957 (FDIC Certificate # 30903).

Searching for the Best CD Rates

To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

PNC Bank has another checking account bonus. They are offering a little more than last month. From the home page of their website, they're listing a bonus of up to $125. Here's the direct link to the promo page. To receive the first $100 requires direct deposit of at least $400 per month along with 10 check card purchases. To receive an extra $25 requires signing up for online banking and making 5 payments through Online Bill Pay. Offer is scheduled to end on July 24, 2010. The promotion applies to both the Virtual Wallet and the Free Checking Account.

There's also a $150 bonus being advertised in the St. Louis area. This was advertised in yesterday's (7/11/10) St. Louis Post-Dispatch. The ad is available online here. The requirements for this $150 appear to be the same as for qualifying for the $100 that's mentioned at PNC's website: 1) direct deposit of at least $400, and 2) at least 10 debit card purchases.

Here's some of the small print as listed at PNC's promo page with my highlights of the important things to note:

New personal checking account must be opened between 7/11/2010 and 7/24/2010. To qualify for a $100 reward, a PNC Bank Visa Check Card must be issued to you, a qualifying direct deposit must be received, and at least 10 purchases made with your Check Card must post to your checking account within 60 days of account opening. To qualify for an additional $25 reward, the first conditions must be met and a minimum of 5 payments must be completed via PNC Online Bill Pay, also within 60 days of account opening. Your checking account must remain open in order for you to receive the $100 or $125 reward, which will be credited to the eligible account within 60 days after all conditions have been met and will be identified as "Promo Reward Cash Trans" on your monthly statement. A qualifying Direct Deposit is defined as a recurring Direct Deposit of a paycheck, pension, Social Security or other regular monthly income electronically deposited into a Free, Performance or Performance Select Checking Account, or the Spend Account for Virtual Wallet. The minimum amount of any single Direct Deposit must be at least $400. The Direct Deposit must be made by an employer or an outside agency. Transfers from one account to another, or deposits made at a branch or ATM, do not qualify as Direct Deposits. Limit of one premium payment per new account legal equity ownership. For this offer, legal equity ownership will be defined by the customer name(s) and social security number(s) on the account. PNC Bank customers with an existing checking account are not eligible for this offer. Offer only available to residents of DC, DE, FL, IL, IN, KY, MD, MI, MO, NJ, OH, PA, VA and WI. Offer may be extended, modified or discontinued at any time and may vary by market.

Some additional details about this Free checking account and the other checking accounts are in PNC Bank's Schedule of Service Charges and Fees. There was some concern in my last PNC post that the debit card would have a fee. This does not appear to be the case for the Free Checking account. The only potential recurring fee I see in the above document is $10 per year for having the Banking Card linked to a checking account. The CSR did not think this applied for the Free Checking. However, terms can vary based on your state so you may want to confirm this.

PNC's Virtual Wallet is composed of a checking account and two savings accounts. One of the savings account is the Growth Account which has a fairly competitive yield of 1.10% for up to $25K (as of 7/12/10). Please refer to my PNC Virtual Wallet review for more details.

In June, PNC Bank announced the completion of the National City conversion which added 1,300 branches to PNC. PNC Bank has been a FDIC member since 1934 (FDIC Certificate # 6384).

Other Bank Bonuses

To find other bonus deals at other banks, please refer to my bank bonus page which has all of my recent bank bonus posts. You can also find additional checking account bonuses, in the Checking Account Deals Forum.

BB&T continues to offer a $100 cash bonus for opening its free checking account. However, they have made it a little harder to get the full $100. Here are the steps required:

• Open a Free BB&T checking account online by 8/31/2010
• Register online at bbt.com/welcome100
• Get $50 for making 10 online bill payments ($25 minimum payment) within 90 days of account opening
• Get $50 for receiving two direct deposits of at least $50 from the same source within 90 days of account opening

Here's the direct link to the promotions page. It's also mentioned at BB&T's home page.

The old promo in March made it easier to qualify for the $100 bonus. It could be done with only 3 online bill payments. No direct deposit was required.

In my March post, several readers have reported that BB&T makes it difficult to close accounts. If you can't make it into a branch, you may be required to mail in a notarized letter requesting that the account to be closed. One reader commented that he wasn't required to mail a notarized letter, but instead he was required to mail a copy of his ID with the letter.

The free checking account has a minimum opening deposit of $50. There are no minimum balance requirements or monthly fees. Online Bill Payment is free.

I asked the CSR in March about a hard credit inquiry. According to the CSR, "it would be a hard hit if you are primary on the application." The credit check is done through Equifax. They also use ChexSystem in the application process.

I was also told that BB&T accounts can only be opened in states with BB&T branches. That now includes Texas (BB&T took over Colonial Bank and its Texas branches when it failed in August 2009).

It's an online promotion only. However, in the small print it states that it's available at the branches in AL, FL and TX. BB&T branches are located in Florida, Georgia, Alabama, North Carolina, South Carolina, Tennessee, Kentucky, Indiana, Texas, Virginia, West Virginia, Maryland and Washington DC.

BB&T is a member FDIC (FDIC Certificate # 9846).

Other Bank Bonuses

To find other bonus deals, please refer to my bank bonus page which has all of my recent bank bonus posts. Some additional bonus deals are also in the checking account discussion forum.

1st Commonwealth Bank of Virginia continues to offer competitive CD, savings account and reward checking rates. The CD and IRA CD rates as listed at the bank's rate sheet as of 6/20/2010 include:

• 1.55% APY 12 month CD
• 2.50% APY 36 month CD
• 3.00% APY 48 month CD
• 3.25% APY 60 month CD
• 3.40% APY 72 month CD
• 3.50% APY 84 month CD

Savings and Money Market Account Rates

The personal savings account is also competitive with a 1.75% APY. Minimum balance to avoid a monthly fee is only $100. One downside is that interest is paid quarterly. The 1.75% APY is listed in the bank's rate sheet as of 6/20/2010. It's the same rate as the money market account, but the MMA requires a $25K minimum balance to qualify for this yield.

Reward Checking Rates

My last report on this bank was in January when they launched their reward checking account with a 4.01% APY on balances up to $25K. It's nice to see this rate and balance cap still available as of today (6/20/2010).

Account Availability and Location

A reader informed me last September that he was able to open an IRA CD by mail without a branch visit. I haven't checked since then whether this is still possible. It should be noted that it is a small one-office bank so it's possible its policy may have changed.

The bank is located in Arlington, Virginia.

The bank was established in February 2009. Since it's so new, it doesn't have ratings for safety and soundness at BauerFinancial or Bankrate.com. We have a 4 out of 5 overall health score at DepositAccounts.com (see our 1st Commonwealth Bank of Virginia rates and reviews page). The bank is a member FDIC (FDIC Certificate # 58773).

Best CD Rates, Savings Account Rates and Reward Checking Rates

• Best CD rates
• Best Savings Account rates
• Best Reward Checking rates

Bank of Georgetown is offering a very competitive 4-month CD special with a 1.60% APY. Minimum deposit is $1,000. The bank has a few other longer-term CD specials, but they're not that competitive. This 4-month CD special is listed in the bank's deposit rate sheet (pdf) as of 6/14/2010. The rate sheet has a November 2009 date, so I contacted the bank today and confirmed that these rates are up-to-date.

The bank has long been offering this 4-month CD special. My last post on this bank was 3 years ago when the rate was 5.50% APY (the good old days).

It appears that a branch visit is required to open an account. Branches are located in Washington DC, Arlington, VA and in Bethesda, MD.

The bank's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial, 4 stars (sound) at Bankrate.com, and a health score of 4 out of 5 at DepositAccounts.com (see our Bank of Georgetown rates and reviews page). These ratings are based on 3/31/10 data except for Bankrate which is still based on 12/31/09 data. The bank has been a FDIC member since 2005 (FDIC Certificate # 57941).