Barclays CD Rate Changes: 5-Year Falls But Shorter Terms Rise


Availability: Nationwide

Barclays made several CD rate changes late last week. The 5-year CD rate had a large decline falling 30 basis points to 1.75% APY. However, the shorter terms had rate increases. Barclays’ 1-year CD rate is now quite competitive at 1.25% APY. The full list of rate changes are shown below:

  • 1.25% APY 12-month CD (was 0.80%)
  • 1.30% APY 18-month CD (was 0.85%)
  • 1.45% APY 24-month CD (was 1.20%)
  • 1.55% APY 36-month CD (was 1.45%)
  • 1.65% APY 48-month CD (no change)
  • 1.75% APY 60-month CD (was 2.05%)

Thanks to DA reader, MidAtlantic, for the Forum post about these rate changes.

This was supposed to be the year we would finally see higher CD rates. That has not been the case, and that’s especially true for long-term CDs. For the most part, the top 5-year CD rates are much lower than they were at the start of the year. There have been some drops on 1-year CD rates, but those drops have generally been less common and less severe. To quantify the changes, I calculated the APY averages of the top nationally available 1-year and 5-year CDs in the CD rate summaries on January 5 and July 5 of this year. Below shows how they have changed:

  • July 5, 2016 APY averages: 2.12% 5-year CDs, 1.27% 1-year CDs
  • Jan 5, 2016 APY averages: 2.26% 5-year CDs, 1.29% 1-year CDs

As you can see from the above averages, Barclays 1-year CD is very close to the average of the top nationally available CD rates. However, the new 5-year CD rate is now quite a bit lower than the average.

More details of these Barclays CDs are shown in the following table. You can see the rate history of each CD by clicking on the “details” arrow on the right side of the row.

2.00%--Barclays60 Month Online CD
1.60%--Barclays48 Month Online CD
1.50%--Barclays36 Month Online CD
1.35%--Barclays24 Month Online CD
1.25%--Barclays18 Month Online CD
1.20%--Barclays12 Month Online CD
Accounts mentioned in this post. Rates as of April 25, 2017.

Before these rate changes, it made sense to get the 5-year CD even if you had wanted a shorter term. Since the 5-year CD has an early withdrawal penalty of only 180 days of interest, breaking the CD early would result in an effective yield higher than the shorter-term CDs that are held to maturity. That’s no longer the case. For example, if you want the best 1-year rate, the 1-year CD with a 1.25% APY is now a better deal than the 5-year CD with an early withdrawal at 1-year (which gives an effective APY of 0.87%). You can see all of the effective yields for the 5-year CD when an early withdrawal is done for any time from one to 59 months using our CD early withdrawal calculator.

Barclays’ CDs have some nice features that give them an edge over CDs from other internet banks. The early withdrawal penalty is 90 days simple interest on the amount withdrawn for CDs with terms of 24 months or less. For CDs with terms greater than 24 months, Barclays charges 180 days simple interest on the amount withdrawn. The grace period when a CD matures is 14 calendar days. You can receive an interest disbursement from your CD on a monthly basis. You have the option to keep interest in your CD account or transfer it to another account (either the Barclays savings account or a verified external account). These features are listed in Barclays’ Terms and Conditions document (link is on the bottom of Barclays’ website).

When I opened a Barclays CD two years ago, the application process was simple and smooth. One of the nice features of the application is the ability to designate beneficiaries which will make an account a Payable on Death (POD) account. No social security number was required for the beneficiaries. Another nice feature of the application process was the funding. I chose an ACH transfer to fund the CD, and it went smoothly. They use a trial deposit system to verify the external account. Two small deposits will be made to the external account. No withdrawals are done. External account can be a checking or savings account.

Barclays Online Savings Account

Barclays continues to have a good deal on its online savings account. It has a competitive rate of 1.00%, and this rate has held steady for over 18 months. Since the savings account was launched in March 2012, there has been only one rate cut. That happened on May 2013 when the yield went down from 1.00% to 0.90%. It went back up to 1.00% in December 2014.

Barclays’ online savings account has several nice features such as no minimum balance requirement and no monthly fees. Barclays also has a nice ACH transfer system. I have more details on its ACH system in this blog post.

Bank Overview

The Barclays internet bank is part of Barclays Bank Delaware which is a FDIC member (FDIC Certificate # 57203). The bank is best known in the U.S. for partnering with companies in offering co-branded credit cards. It's part of the U.S. division of Barclays, a British multinational megabank.

Barclays Bank Delaware has an overall health grade at of A with a Texas ratio of 5.70% (excellent) based on March 31, 2016 data. Please refer to our financial overview of Barclays Bank Delaware for more details. The bank has been a FDIC member since 2001.

To look for the best nationwide CD rates and the best CD rates in your state, please refer to our CD rates table or our Rates Map page.