Bank5 Connect increased the rates on many of its CDs in April 2018. At the time, the newly raised rates were competitive, but lost their edge by remaining static, as many other nationally available CD rates soared upward. With rates currently trending downward, Bank5 Connect’s 24-month Investment CD and 36-month Connect CD are again good deals.
24-Month Investment CD
When I wrote first wrote about the 24-month Investment CD in April 2018, its rate had been boosted by the addition of 60 bps. Still earning 2.70% APY, the Investment CD has a $500 minimum/$500k maximum opening deposit.
In addition to having a competitive rate, the Investment CD features “flexible deposits: anytime, any amount!” According to the Account Disclosure,
You may make an unlimited number of deposits into your account.
The 24-month Investment CD landing page states,
With a Bank5 Connect Investment CD, you can transfer funds into your CD anytime you like from an outside checking account or by simply mailing a check. Or you can combine it with a Bank5 Connect Checking account to create the ultimate investment bundle!
The Investment CD's Early Withdrawal Penalty is described as follows:
Investment CDs are statement only, which means no passbooks (for anyone out there who remembers what a passbook is). And we do our very best to keep our fees low, but we want to be upfront about them -- there's an early withdrawal penalty on an Investment CD of 6 months' interest.
As stated in the CD FAQs,
How do I receive my money when my CD reaches its term?
When your CD reaches maturity, simply contact us at 1-855-55BANK5 or login to online banking to send us a secure email and let us know what you’d like to do
with the funds.
There is a 10-day calendar grace period before the Investment CD renews. Should you opt to not renew, the maturing funds will be transferred to an interest-bearing Bank5 Connect account.
36-month Connect CD
While not as competitive as the Investment CD, the 36-month Connect CD’s 2.90% APY is still a good rate. Like the Investment CD, the minimum opening deposit is $500, with a $500k maximum opening deposit, but the 36-month Connect CD is NOT an add-on CD.
DA began tracking the 36-month Connect CD more than five years ago. Its initial 1.50% APY remained in place until April 2018, when 140 bps were added.
As stated in the Account Disclosure, the Early Withdrawal Penalty for the 36-month Connect CD reads as follows:
You may make withdrawals of principal from your account before maturity only if we agree at the time you request the withdrawal.
The penalty will equal six months interest on the amount withdrawn subject to penalty.
Depositors’ Insurance Fund
In addition to FDIC insurance, Bank5 Connect offers Depositors’ Insurance Fund to all its depositors. According to the Insurance and Your Finances page,
The Depositors’ Insurance Fund (DIF) was established by the Massachusetts legislature in 1934, and at the time the fund was created, it was as an alternative to the FDIC. In fact, Massachusetts savings banks, by state law, were not allowed to join the FDIC.
In 1956, the law was eventually changed to allow Massachusetts savings banks to join the FDIC. For those that did, the DIF became known as an excess deposit insurer, meaning they insured deposits in excess of the FDIC limit. By 1986, all DIF member banks had joined the FDIC, so since then, they've been solely an excess deposit insurer.
The DIF insures all deposits above the FDIC limit in Massachusetts savings banks, and there's no dollar limit to the DIF’s insurance coverage, so they cover everything above the FDIC limit of $250,000.
Launched in July 2013, Bank5 Connect is an internet division of Massachusetts-based BankFive. Through its online application, Bank5 Connect offers its product line to all U.S. citizens and resident aliens, 18 years or older, with the exception of Massachusetts and Rhode Island residents.
Bank5 Connect's online application re-directs residents of Massachusetts and Rhode Island to BankFive's online application. While BankFive offers some of the same products, the rates are substantially lower, e.g., BankFive’s 2-year Investment CD currently earns 0.65% APY.
Beneficiaries cannot be designated on the online application, but according to CSR,
You cannot name a beneficiary on the application, but you can request the
form once the account is opened. It would need to be notarized and returned to us.
Funding can be done by ACH (maximum $500k) or by mailing a check. Although the first page of the online application states, "You''ll need ... something to fund your new account (credit card, debit card, checking account, or savings account)," the maximum credit card funding is $100. CSR stated that credit card funding is a convenience, "generally used for Checking or Savings account funding."
I’ve mentioned in previous blog posts that some DA readers have posted unfavorable reviews of Bank5 Connect. Many of those reviews are related to the account opening process, specifically, problem in verifying identities and incorrect information based on bad Equifax data. On the other hand, some DA readers have left 4- and 5-star reviews about Bank5 Connect. DA reader, mishad, stated in a Forum post,
I was a little worried when I saw all these terrible reviews, but then I did my homework and saw that they have hundreds of reviews on other sites from actual customers, which hold more weight than disgruntled peopled who couldn't pass the app. Anyway, glad I gave them a try. Great rates, and no issues yet!
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 "A" at DepositAccounts.com, with a Texas Ratio of 2.03% (excellent), based on March 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $73.17 million, an excellent annual growth rate of 9.9%. 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 41st largest bank headquartered in Massachusetts, with deposits in excess of $1 billion and more than 98,000 customer accounts.
How the Investment CD Compares
When compared to 194 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Bank5 Connect’s 24-month Investment CD APY only ranks seventh, 24 bps lower than the current rate leader, State Bank of India’s (IL) 2-year Senior Citizen CD.
With the unlimited deposits allowed throughout the term, the 24-month Investment CD’s APY is quite competitive when compared to nationally available savings accounts.
|Interest Rate||Account Name||Credit Union/Bank|
|3.00% APY||Fitness Savings (12.5k steps, $100 min)||FitnessBank|
|2.70% APY||24-Month Investment CD ($500 min)||Bank5 Connect|
|2.52% APY||High Yield Online Savings ($100 min)||Vio Bank|
|2.51% APY||eOne Savings (no min)||Salem Five Direct|
How the Connect CD Compares
Since Bank5 Connect’s product line is offered in 48 states, I’m using nationally available CDs in this comparison. That being said, when compared to 192 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Bank5 Connect’s 36-month Connect CD APY currently ranks fourth.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|3.04% APY||3-Year Senior Citizen CD||State Bank of India (IL)|
|3.00% APY||36-Month CD||MAC Federal Credit Union|
|2.95% APY||36-Month CD||Thrivent Federal Credit Union|
|2.90% APY||36-Month Connect CD||Bank5 Connect|
The above rates are accurate as of 7/22/2010
To search for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.