New Higher 1-Year Internet CD Rates at Airbanking


Airbanking has just recently increased the rates on its 1-year CDs. There are actually two 1-year CDs. In addition to a regular 1-year CD, Airbanking offers a 1-year NO Penalty CD. The new rates are now very competitive: 1.12% APY for the regular 1-year CD and 1.02% APY for the No Penalty 1-year CD. Minimum deposit is $500. These rates are listed at airbanking's rate schedule as of 10/29/2012.

CD, Application & CD Closing Details

The early withdrawal penalty for the regular 1-year CD is equal to 90 days interest on the amount withdrawn. This is listed at the bottom of the bank's fee schedule.

The bank doesn't list many details of the CDs and application process, so I called the internet bank (at 1-877-924-7360 from 9am to 5pm ET M-F) this morning. I was pleasantly surprised that a CSR answered immediately.

There's an online application, and the account can be funded by either mailing a check or with an ACH bank-to-bank transfer. I was told the rate locks at the time you submit the application. At the end of the application, you're required to print out the signature card an mail it to the bank.

There are no fields to specify beneficiaries in the application. However, I was told that you can specify beneficiaries on the accounts. This can be done by sending them a secure message after the account is opened. The secure message system is part of the bank's online banking services.

Since I last checked with the bank last year, they still have not made it easier to close the CDs. This still requires a paper form. They can email you this form, and then you need to fill it out and fax it back to them. They will then mail you the check.

Bank Overview

Airbanking is the internet division of MainStreet Bank in Virginia. Airbanking was launched last year with internet CDs, savings and checking accounts. The savings account rate used to be competitive, but the rate plummeted in February from 0.95% to 0.50%.

MainStreet Bank is also offering these same CDs. These can be opened at one of MainStreet Bank branches which are located in Arlington, Fairfax, McLean and Herndon, Virginia.

It has an overall health score at is 3 stars (out of 5) with a Texas Ratio of 20.77% (average) based on June 2012 data. Please refer to our financial overview of MainStreet Bank for more details. The bank has been a FDIC member since 2004 (FDIC Certificate # 57742).

How These CD Rates Compare

Airbanking's regular 1-year CD yield is currently the highest for nationally available CDs. The second best is 1.11% APY at AloStar Bank of Commerce. The third best is 1.10% APY at CIT Bank. This CIT Bank CD requires a $25K minimum, but it has a bump-up rate and add-on deposit option.

Airbanking's 1-year No Penalty CD is a little better deal than Ally Bank's 11-month No Penalty CD which has a 0.95% APY. In addition to the higher rate, its term is one month longer. For No Penalty CDs, the longer the term, the better.

These rates are accurate as of 10/29/2012.

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Truthseeker (anonymous)   |     |   Comment #1
Assuming that you read the terms and conditions ultra-carefully, and have done your homework making sure they can't unilaterally change the terms of the CD (ie: preventing you from withdrawing without penalty), this is a CD I might buy. That said, the fact that it is a CD probably means a few days to close it, and I don't see any advantage given that the rate is about equal or lower than several other MM and checking accounts like TIAADirect, et. al. I've been very pleased with TIAA. Since 2006, I keep only a percentage of my wealth in the banking system. Combining TIAA with Incredible Bank is enough to meet my liquidity needs, while keeping me under the $250,000 FDIC limit at each one.