New York 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

Sea Comm Federal Credit Union has several competitive rates for its share and IRA certificates. The best deals are its long-term and mid-term certificates which include a 3.49% APY 5-year CD and a 3.13% APY 3-year CD. Other top rates include a 3.25% APY 4-year CD and a 2.28% APY 2-year CD. Minimum deposit is $1,000. These rates are listed at the credit union's rate table as of 8/31/2010.

Membership is open to those who live, work, worship or attend school anywhere in St. Lawrence County or in parts of Franklin County. Membership requires a minimum balance of $5 in the Regular Share Savings Account. Please refer to the credit union's Join-Us Page for more details.

The credit union has strong ratings for safety and soundness: 4 stars (sound) at Bankrate.com, 5 stars (superior) at BauerFinancial and an overall health score of 4 out of 5 at DepositAccounts.com (see our financial overview of Sea Comm Credit Union) The credit union is federally insured by the NCUA (Charter # 15672).

Searching for the Best CD and Checking Rates

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

• CD rates
• IRA CD rates

Massena Savings & Loan has some very competitive CD and IRA CD rates. In fact, the short-term IRA CD rates may be the best in the nation. The most competitive yields listed at the bank's rate table as of 8/24/2010 include:

• 1.22% APY 6-month (2.56% IRA)
• 1.48% APY 18-month (2.82% IRA)
• 2.04% APY 24-month
• 2.82% APY 30-month (3.08% IRA)
• 3.18% APY 36-month

The bank also has competitive rates for its money market account and NOW checking account. They're tiered rate accounts with a top yield of 1.27% APY (as of 8/24/10). When I reported on this bank last year, the top yields were 2.30% APY for the MMA and 1.79% APY for the checking.

It appears a branch visit is required to open an account. Branches are located in the northern part of New York state in the towns of Massena and Waddington.

The bank's ratings for safety and soundness are a little mixed: 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 Massena Savings and Loan). These ratings are based on 3/31/10 financial data. The bank has been a FDIC member since 1949 (FDIC Certificate # 30429).

Best High-Interest CD and IRA CD Rates

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

• CD rates
• IRA CD rates

The Bank of Greene County is offering a free Apple 8GB iPod touch for opening any personal checking account and for performing the following two activities:

• Sign up for direct deposit
• Use the Visa Check Chard twice

The offer is scheduled to end on 9/30/2010. Below is a copy of the offer's small print:

Direct deposit transactions include payroll, Social Security, pension, and government benefits. Qualifying debit card transactions must be signature-based. Limit one iPod touch per household. Bank employees and their families are not eligible. The value will be reported on a Form 1099. This promotion applies only to new checking accounts. Must redeem before September 30, 2010. The Bank may discontinue this offer at any time without notice.

One problem with checking account bonuses that are gifts rather than cash is that you could pay more taxes if the bank reports the gift to have more value than it's really worth.

The bank also offers the e-Checking and e-Savings accounts that pay 5.00% APY. However, this rate only applies to balances up to $1,000. Balances over that only earn 0.50%. If you maintain a total of $2,000 in these two accounts, you'll make $70 more each year compared to a 1.50% savings account.

A branch visit appears to be required to open accounts. Branches are located in the New York cities of Catskill, Cairo, Ghent, West Coxsackie, Hudson, Greenville, Ravena, Tannersville and Westerlo.

The bank's overall health score is 3 out of 5 at DepositAccounts.com based on 3/31/10 data (see our financial overview for Bank of Greene County). The bank has been a FDIC member since 1974 (FDIC Certificate # 21591).

Credit for this find goes to this iBankDesign forum thread.

Other Checking Account Bonuses

If you can't qualify this iPod bonus at the Bank of Greene County, check out the iPod touch promotion at Bank of the West. This Bank of the West promo is scheduled to last until 8/20/2010.

To find other bonus deals, please refer to my bank bonus page which has all of my recent bank bonus posts. Additional bonuses are listed in the bank deals forum.

People's Alliance Federal Credit Union is offering a fairly competitive 5-year CD with a 2.97% APY. Minimum deposit is $500. This rate is listed in the bank's rates page as of 8/13/2010.

Membership is open to those who live, work, worship or attend school in several areas of New York including parts of Brooklyn, New York, and in Miami and Hialeah, Florida. You can also be eligible via Select Employer groups and via family. Please refer to the credit union's Membership page for more details. Membership requires a minimum deposit of $50 into the prime share savings account.

Branches are located in the New York cities of Jamaica, Brooklyn, Bronxville, Ronkonkoma, Westbury, Yonkers and Hauppauge, and in Miami, Florida.

The credit union's ratings for safety and soundness are a little above average: 4 stars (excellent) at BauerFinancial, 3 stars (performing) at BauerFinancial and an overall health score of 3 out of 5 at DepositAccounts.com (see our financial overview of People's Alliance Credit Union). The credit union is federally insured by the NCUA (Charter # 3633).

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.

Atlas Savings and Loan Association continues to offer competitive CD and IRA CD rates. Some of the CD rates have fallen a bit since my June post, but they remain attractive compared to what other banks are offering. The best CDs and IRA CDs that are listed in the bank's rates page as of 8/03/2010 include:

• 1.51% APY 12 months (1.71% IRA)
• 1.61% APY 18 months
• 2.02% APY 24 months (2.22% IRA)
• 3.15% APY 60 months

They used to offer a very competitive 3-year IRA CD, but this rate is no longer noteworthy. Minimum deposit is $2,500 for both the regular and IRA CDs.

The bank just recently opened a new branch at Staten Island. You might want to keep a look out for grand opening deposit specials. Currently, the only new branch special they're offering is a mortgage and refinancing special.

The bank's main office is located in Brooklyn, New York. It appears that a branch visit is required to open accounts.

The bank continues to have strong ratings for safety and soundness: 5 stars (superior) at BauerFinancial, 4 stars (sound) at Bankrate.com and an overall health score of 5 out of 5 at DepositAccounts.com (see our financial overview for Atlas Savings and Loan Association). These ratings are based on 3/31/10 financial data. The bank has been a FDIC member since 1955 (FDIC Certificate # 30783).

Searching for Top CD and IRA CD Rates:

• CD rates at DepositAccounts.com
• IRA CD rates at DepositAccounts.com

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.

20Th Century Fox CU is offering a competitive 4-year CD with a 2.78% APY. Minimum deposit is $2,500. This 4-year CD is really the only noteworthy CD. Their other CD rates are much less competitive. This CD rate is listed in the credit union's rates page as of 7/28/2010.

In addition to employees of 20th Century Fox, credit union membership is open to members of two associations. According to the credit union's Who Can Join page, the following are qualified to join:

• Members of America Schools Program Los Angeles in Los Angeles, CA
• Employees and members of Best Friends Animal Society-Los Angeles Chapter, Woodland Hills, CA

The credit union includes links to the applications for both of these associations, and these applications are part of the credit union application. Membership requires a $5 one-time fee and a minimum balance of $25 in the share savings account.

Branches are located in Los Angeles, California and New York, New York.

The credit union's ratings for safety and soundness are fair: 3 stars (adequate) at BauerFinancial, 3 stars (performing) at Bankrate.com and an overall score of 3 out of 5 at DepositAccounts.com (see our financial overview for 20th Century Fox FCU). These ratings are based on March 2010 financial data. The credit union is federally insured by the NCUA (Charter # 16954).

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.

There are a few institutions that offer more than one reward checking account. One has a higher rate, but it has more requirements. I just noticed Northern Federal Credit Union in New York State has done this. In addition to its Choice Reward Checking that I first reported on in March 2007, it now offers the Premium Choice Checking with a yield that's 1.50% higher. Below is a summary of the rates, requirements and features of the two accounts (as of 7/20/2010):

Choice Rewards Checking

• 3.01% APY* on balances up to $25,000
• 1.00% APY* on balances from $25,001 to $50,000
• ATM Fee Refunds Nationwide

Monthly requirements:

• Receive a direct deposit or conduct an ACH debit
• Receive monthly e-statements instead of paper statements
• Make 10 or more purchases using your debit card (excludes ATM withdrawals)
• Login to Online Banking at least one time per month

Premium Choice Checking

• 4.51% APY* on balances up to $25,000
• 1.50% APY* on balances from $25,001 to $50,000
• 0.50% APY* on balances over $50,000

Monthly requirements:

• Set up a recurring direct deposit of payroll, pension, or retirement
• Receive monthly e-statements instead of paper statements
• Make 15 debit card transactions with a minimum of five dollars. (must be credit transactions)

It's interesting to note that not only does the Premimum Choice Checking require 5 more debit card purchases per month, but it also requires the purchases be credit-based. Also, it requires direct deposit of paycheck instead of allowing for an ACH debit (not sure if ACH pushes would count).

Field of membership includes those who live, work, worship, or attend school in Jefferson County, Lewis County or in parts of St. Lawrence County, New York. You may also qualify via select employer groups and via immediate family. Please refer to the site for details. Membership requires a minimum $5 balance in the share savings account.

The credit union is federally insured by the NCUA (Charter # 10578).

Other High-Yield Reward Checking Accounts

Please refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your state or that are available nationwide.