Bank5 Connect 24-Month Add-On CD Has Rate-Leading APY

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Availability: 24-month Investment CD, 3.30% APY, $500 minimum/$500k maximum opening deposit, unlimited number of deposits throughout the term.

Availability: Nationwide, with the exception of Massachusetts and Rhode Island.

Bank5 Connect (internet division of Massachusetts-based BankFive) has ended the week by raising the rate on the 24-month Investment CD to 3.30% APY. While the 3.30% APY won’t be challenging the current 2-year CD top rates, the 24-month Investment CD’s intrinsic value lies in its add-on capabilities: unlimited number of deposits allowed anytime during the term. A 24-month Investment CD can be opened with a $500 minimum deposit; the maximum opening deposit is $500k. According to the online application, “we limit total relationships to $1 million in deposits.”

APYMINMAXINSTITUTIONPRODUCTDETAILS
3.30%$500-Bank5 Connect24 Month Investment CD
Rates as of December 8, 2022.

The 24-month Investment CD APY had been less than competitive for about the last two years. The August rate hike of 270 bps (from 0.50% to 3.20%) and this week’s ten bps increase have boosted the 24-month Investment CD APY to the top spot for nationally available Add-On CDs.

According to the Account Disclosure,

Deposit Limitations: You may make an unlimited number of deposits into your account.

The 24-month Investment CD landing page states,

Adding money to your Bank5 Connect 24-Month Investment CD is easy – you can transfer funds electronically or you can simply mail us a check.

CSR confirmed that transferring “funds electronically” refers to an ACH. He suggested having a Bank5 Connect High-Interest Checking account to facilitate an internal transfer, citing the FAQs page,

How do I deposit additional funds into my 24-Month Investment CD?

    One way to deposit funds into your 24-Month Investment CD is to open a Bank5 Connect Checking account. Through our Online Banking platform, you can transfer money into your Bank5 Connect Checking account from other banks, and you can transfer money from your Bank5 Connect Checking account to your Investment CD via Online Banking or Mobile Banking. Another option is to initiate the transfer at another bank.

As stated in the Fee Schedule the Early Withdrawal Penalty reads as follows:

There is an early withdrawal penalty equal to 3 months of interest for CDs with terms less than one year, and an early withdrawal penalty equal to 6 months of interest for CDs with terms of one year or greater.

Unfortunately, the “Withdrawal Limitations” section on Account Disclosures page still gives the Bank the right to refuse an early withdrawal request:

You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.

Initial funding can be done by ACH, up to a maximum $500k. Although the first page of the online application states, "You may also fund your account with a check, or a credit/debit card," the maximum credit card funding is $100. According to CSR, credit card funding is offered as a convenience and is "generally used for checking or savings account funding."

While the online application allows for “a desired beneficiary” to be named, the FAQs state,

The easiest and fastest way for you to add or change a beneficiary on an existing Bank5 Connect account is to use our Video Banking service. Another option is to call us at (855) 552-2655 to request a paper form. We can send the form to you by either email or U.S. Mail, and you will then need to fill it out, have it notarized, and return it to Bank5 Connect.

According to the FAQs,

How do I receive my money when my CD matures?

    When your CD reaches maturity, simply contact us at (855) 552-2655, or log into Online Banking and send us a Secure Mail to let us know what you’d like to do with the funds. You can choose to roll the funds over into a new CD, or we can transfer the funds to another account for you, or mail you a check.

There is a 10-day calendar grace period before a CD renews. Should you opt to not renew, the maturing funds will be transferred to an interest-bearing Bank5 Connect liquid account.

The Elusive Add-On CD

“Searching for the Elusive Add-On CD,” authored by DA reader and guest blogger, Charles Rechlin, does an excellent article explaining Add-On CDs. As Charles stated,

To my mind, an ideal add-on CD possesses the following features:

  • a multi-year term (three or more years)
  • a fixed or minimum rate that is reasonably competitive with rates offered on CDs of identical maturity that don’t carry add-on rights
  • a low opening balance requirement
  • an unlimited right to make additional deposits from time to time, with no maximum balance

It’s extremely difficult, if not impossible, to locate a CD combining all of these features. You’re fortunate if you can find one with a couple of them.

The 24-month Investment CD definitely puts deal seekers in the “fortunate” category, as it has three of the features mentioned above. If you have a CD that’s maturing in the near future, opening a 24-month Investment CD with a minimum $500 deposit would ensure a safe place for those maturing funds, particularly if rates should fall any time in the next two years.

While highly unlikely, a potential downside to any add-on CD is that a bank or credit union might change the terms on existing CDs. DA readers may remember that in October 2019, GTE Financial made changes to the terms of existing promotional share certificates opened in 2018 and 2019. While GTE Financial quickly reversed its decision after a general outcry by its members, there’s no guarantee that another credit union wouldn’t be more obstreperous.

Depositors’ Insurance Fund

In addition to the standard FDIC insurance, Bank5 Connect offers Depositors’ Insurance Fund (DIF) to all its depositors. Established in 1934 by the Massachusetts legislature, DIF was an alternative to FDIC because (by state law) Massachusetts savings banks were not allowed to join FDIC. In 1956, the law was changed, allowing Massachusetts savings banks to join FDIC. For those that did join FDIC, the DIF became an excess deposit insurer, insuring deposits in excess of FDIC limit. By 1986, all DIF member banks had joined FDIC, effectively making DIF an excess deposit insurer exclusively.

According to the Deposit Insurance page, Bank5 Connect is “one of the only online banks offering DIF protection.”

  • 100% Deposit Insurance – The DIF insures all deposits above the FDIC limit for Massachusetts savings banks. Based in Massachusetts, Bank5 Connect is a DIF member bank, and all our deposit accounts are covered by DIF insurance.
  • No Residency Requirements – No matter where you live, your Bank5 Connect accounts are covered by DIF.
  • All Deposits, No Limits – Whether you have a Bank5 Connect certificate of deposit, savings account or checking account, your deposits are insured 100% regardless of your balance.
  • It's Automatic and Free – There are no forms or applications required. You automatically receive DIF coverage at no cost upon opening a Bank5 Connect account and making a deposit.
  • Protection You Can Trust – No depositor has ever lost a penny in a DIF member bank, going back more than 80 years.

Bank5 Connect Online Application Issues

In the past, there have been concerns with Bank5 Connect’s online application, with many potential account owners being rejected out-of-hand. DA reader, GH1, summed it up in a Forum post comment yesterday:

If you can open an account with them. The Cheksystem that they use seems to reject 70 percent of people.

A Bank5 Connect representative posted a response to GH1’s comment, which reads in part,

@GH1, we completely understand the concerns regarding our online application, especially given a lot of the older reviews on this site. However, we have significantly improved our account opening platform since those were written. Furthermore, if you encounter any issues at all with our online application, we can now assist you through our Video Banking service (bank5connect.com/video-banking). With Video Banking, we can help walk you through the app, or you can easily validate your identity without having to send any sensitive documents through email or postal mail.

Availability

Massachusetts-based BankFive launched its internet division, Bank5 Connect, approximately ten years ago. Using an online application, Bank5 Connect offers its product line to all U.S. citizens/resident aliens (18 years or older) who have a valid Social Security number, with the exception of those who live in Massachusetts or Rhode Island.

Bank5 Connect's online application re-directs residents of Massachusetts and Rhode Island to BankFive's online application.

Unfortunately, we are not able to offer Bank5 Connect services to residents of Massachusetts or Rhode Island. But we’d love to have you as a customer of BankFive,
our community bank based in Massachusetts that’s been serving customers since 1855.

BankFive offers some of the same products, but the rates are lower, e.g., BankFive’s 2-year Investment CD currently earns 2.50% APY.

Bank Overview

As an online division of BankFive, Bank5 Connect operates under BankFive’s FDIC Certificate and shares its financial history.

Bank5 Connect/BankFive has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 1.62% (excellent), based on June 30, 2022 data. In the past year, the Bank has increased its total non-brokered deposits by $43.01 million, an excellent annual growth rate of 3.7%. Please refer to our financial overview of Bank5 Connect/BankFive (FDIC Certificate # 23286) for more details.

BankFive was founded in 1855 as the Fall River Five Cents Savings Bank, one of the first Five Cent Savings Banks in America. The “Five Cent” moniker was chosen because these banks required only a 5¢ deposit to open an account. BankFive is currently the 34th largest bank headquartered in Massachusetts, with deposits in excess of $1.6 billion and more than 127,000 customer accounts.

How the 24-Month Investment CD Compares

When compared to the Add On CDs tracked by DepositAccounts.com, which require a similar minimum deposit ($5k or less) and are not limited by a low balance cap, the Bank5 Connect 24-Month Investment CD APY currently ranks first.

The above information and rates are accurate as of 9/16/2022.

To look for the best CD rates, either nationwide or state-specific, please refer to our CD Rates Table page.

Related Pages: 5-year CD rates, nationwide deals, Internet banks

Comments
P_D
  |     |   Comment #1
Be careful with this one. My experience so far has been spotty and one CSR who claimed high confidence in their answers appeared to have turned out to be incorrect on a couple of key points when I attempted to confirm the answers with a manager. So far CSRs have been nice, but not very accurate.

Also after filing the application, I tried to fund electronically through their application system online and was unable to. The glitch was in their system not mine. So I had to mail a check. Not sure if you will have this issue or not, but it left me with no option but to send a check. 10 days later they said they still did not receive the check. I confirmed the address and it was correct.

Next, if you are depositing large amounts note the unusual details of the $1m cap. These were based on a conversation I had with a manager.

1. If your balance exceeds $1m, even if it is the result of earned interest, any balance above $1m will not earn interest.

2. They do not send outgoing wires.
mffarrell
  |     |   Comment #2
I had one of their competitive CDs a couple of years ago, but never funded it above $500. If you want to add a beneficiary you have to have their documents notarized.

No thank you! Unless, they were offering a 5% plus CD, then I would bite and jump through their hoop.
Sylvia
  |     |   Comment #3
I had no problems with this account, which I opened in 2018 and closed upon maturity in 2020. Using the ACH option in application, I started with $500 to satisfy account minimum. Subsequent deposits were made directly to the CD through ACH’s initiated from external FI. At maturity, I took advantage of their willingness to return balance to funding account through ACH.
jimdog
  |     |   Comment #4
They are not rate leading when compared to risk free treasuries. Way behind.
111
  |     |   Comment #5
Yes, but Treasuries can't offer the same cheap ($500) rate insurance that these nearly risk-free add-on CDs do. Historically recessions bring rates down, and if an unexpectedly fast drop happens 3.3% might not look so bad.
Hooked
  |     |   Comment #6
I am a Bank5 Connect customer and opened this CD recently when the rate was 3.2%APY. Opened another one today with my 2% credit card and charged $500, the maximum credit card funding allowed. Added one beneficiary; SSN required. Cheap rate insurance so why not?
deplorable_1
  |     |   Comment #7
Nice! Thanks hooked if you don't mind which card worked as a purchase? Just PM me if you don't want that info on the public side. I didn't know they did credit card funding. Can't beat $500 rate insurance although I hope I won't need it. ; )
Kaight
  |     |   Comment #8
I also opened my account with $500 of credit card funding (Alliant Visa Signature) so collected a few tax free bucks in rewards. There was zero drama. Everything went forward smoothly.  Helpful, friendly reps.  Positive experience.  Good bank.

Plan to wait a short while to open my second CD at 3.3% APY.  Want to find out what is going to happen with the Fed this coming Wednesday afternoon.  Things could become interesting.
Svy
  |     |   Comment #9
Have you been able to confirm yet that Alliant doesn't consider the funding as a cash advance?
jimdog
  |     |   Comment #10
Yes, the add on feature is nice, but the term of only 24 months kills the deal for me. Rates are going to be higher for longer, much longer than anyone thinks. The FED will slowly raise rates for the next two years, thereby making this deal unattractive to me. Low rates are over, so get over it, we are not going back down anytime soon. Likely we are two years away from decreasing rates, so near 4% short maturity treasuries is why my money is going
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Availability: Nationwide, with the exception of Massachusetts and Rhode Island.

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