It’s been close to a year since any Bank5 Connect CD has been listed in the bi-weekly CD Rates Summary. That changed this week, after 30 bps were added to the 36-month CD (0.85% APY). This is the first rate increase for the 36-month CD in three years, following a steady rate decline from 2.90% APY (August 2019) to 0.55% APY (November 2020). The minimum opening deposit is $500, with no stated balance cap, although the online application states, “At this time, we limit total relationships to $1 million in deposits.”
As stated in the Fee Schedule the Early Withdrawal Penalty (EWP) 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.
The Account Disclosures page provides more details on early withdrawals including this potential limitation:
You may make withdrawals of principal from your account before
maturity only if we agree at the time you request the withdrawal.
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. CSR stated that credit card funding is offered as a convenience and is "generally used for checking or savings account funding."
While the online application asks, “Would you like to add a beneficiary?,” the FAQs state,
To name a beneficiary on a Bank5 Connect account, please call us at (855) 552-2655. We will need to send you a form – either by email or U.S. Mail – and you will 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 the 36-month CD renews. Should you opt to not renew, the maturing funds will be transferred to an interest-bearing Bank5 Connect liquid account.
24-Month Investment CD
Bank5 Connect’s 24-month Investment CD is part of the new “Nationally Available Add-On CDs” category in this week’s CD Summary. Currently earning 0.50% APY, the 24-month Investment CD is actually an add-on CD, which permits unlimited deposits anytime during the term. The Investment CD has a $500 minimum and a $500k maximum opening deposit.
I’ve written about the 24-month Investment CD five times between late 2017 and early 2020. In an eight-month time frame, the Investment CD APY lost 160 bps, finally settling at 0.50% in early November 2020. While the rate is not impressive, the intrinsic value of Investment CD APY is increased with the add-on feature of “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,
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.
But according to the FAQs, depositing funds is a bit more involved.
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.
Depositors’ Insurance Fund
In addition to FDIC insurance, Bank5 Connect offers Depositors’ Insurance Fund to all its depositors. According to the Deposit Insurance page,
- 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.
Massachusetts-based BankFive launched its internet division, Bank5 Connect, about eight years ago. Through its 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 Massachusetts and Rhode Island residents.
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 36-month CD currently earns 0.75% APY.
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 2.06% (excellent), based on March 31, 2021 data. In the past year, the Bank has increased its total non-brokered deposits by $228.27 million, an excellent annual growth rate of 25.06%. 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 39th largest bank headquartered in Massachusetts, with deposits in excess of $1.3 billion and more than 80,000 customer accounts.
How the CD Compares
When compared to the similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Bank5 Connect’s 36-month CD APY currently ranks fifth.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|1.01% APY||3-year Fixed CD||Lafayette Federal Credit Union|
|1.00% APY||3-year CD||Quontic Bank|
|0.95% APY||3-year CD||Evansville Teachers Federal Credit Union|
|0.90% APY||36-month CD||Affinity Plus Federal Credit Union|
|0.85% APY||24-Month CD||Bank5 Connect|
The above rates are accurate as of 8/25/2021.
To search for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.