Barclays Increases 60-Month Online CD Rate to a Competitive Level

Last week Barclays increased the rates of its three long-term CDs. Most noteworthy was the 20-bp rate increase of its 60-month Online CD to 4.50% APY. Long-term CD rates at online banks haven’t moved much in the last four months. In fact, there have been some rate declines. The average online 5-year CD yield has fallen 5 basis points since December 1st to 3.95% on April 3rd. Consequently, this rate increase at Barclays is noteworthy. Also, the fall in long-dated Treasury yields since early March doesn’t bode well for long-term CD rates. If you want to lock into a competitive 5-year CD rate before rates fall, this might be a good time.

In addition to the 60-month CD, the Barclays 24-month CD (4.60% APY) and 48-month CD (4.40% APY) also had rate increases. However, Barclays 12-month CD fell 10 bps to 4.90% APY.

Barclays CDs have no minimum balance required to open. More details of these Barclays CDs are shown in the above table. You can see the rate history of each CD by clicking on the “details” arrow on the right side of the row. To review all of Barclays CDs, please refer to our Barclays Online CD rate table.

Many thanks to DA reader, RichardW, for his Forum post about these rate increases.

Overview of Barclays’ Online CDs

As stated in the Terms and Conditions disclosure, the Early Withdrawal Penalty reads as follows:

For a CD Account with a term of 24 months or less, 90 days simple interest on the amount withdrawn subject to penalty. For a CD Account with a term greater than 24 months, 180 days simple interest on the amount withdrawn subject to penalty.

One thing that adds to the competitiveness of Barclays’ 60-month CDs is an early withdrawal penalty (EWP) of 180 days simple interest on the amount withdrawn. If the CD is closed early, the effective yields (that include the impact of the EWP) can sometimes be comparable to competitive short-term CDs held to maturity. With many shorter-term rates now higher than long-term rates, this has become less common.

You can see how Barclays’ 5-year CD compares to Ally’s 5-year CD and to two top-rate 5-year CDs at credit unions by using our CD Early Withdrawal Penalty Calculator. A smaller EWP can be more important than a higher rate if there’s a significant chance that you’ll be closing the CD early.

Another nice aspect of Barclays is that they allow partial early withdrawals. If you only need some of the money in a CD, you don’t have to close the CD. You can do a partial early withdrawal. The penalty will only be applied to the part of the principal that is withdrawn. Other internet banks like Ally don’t allow partial early withdrawals. In these cases you have to close the CD if you need access to any of the principal.

Time to Break an Existing Barclays CD?

If you had opened a Barclays 5-year CD in the last few years, that CD is earning a lot less than what you could be earning now. In fact, Barclays CD rates were well below the online average during the zero rates of the pandemic. For most of 2021, the Barclays 60-month CD rate was only 0.25%. If you still have an old Barclays CD, you may want to consider closing it early and moving those funds into a new Barclays 5-year CD. Due to the mild early withdrawal penalty, you’ll earn more by breaking the CD even after taking into account the early withdrawal penalty. You can see how much better you will do by using our When to Break a CD Calculator.

CD Maturity and Interest Payments

The grace period when a CD matures is 14 calendar days. You can go online to easily change the maturity disbursement options at any time. In addition to the auto renewal, the options include disburse funds by check, transfer funds to an external account and transfer funds to your Barclays savings account.

You can receive an interest disbursement from your CD on a monthly basis. This can also be easily changed online. 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).

Availability and Account Opening

Barclays is an internet-only bank that is headquartered in Wilmington, Delaware. According to Barclays’ terms and conditions, “To open an account with us, you must be at least 18 years old, a U.S. citizen or a resident alien with a valid Social Security Number or other Taxpayer Identification Number, and have a residential address in the United States.” Opening an account, including CDs and Savings, must be done online.

Opening a CD

When you open a CD, you can choose to fund the CD with an ACH transfer. If you’re already a customer, you can fund it from your Barclays savings account, an external account already on record or you can choose to register a new external account. For new external accounts, Barclays uses 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.

Unlike other internet banks that provide for a 10-day or 15-day rate guarantee, Barclays does not have this policy. The rate guarantee ensures that the customer will receive the highest rate on the CD from the day the CD is opened until the end of the 10- or 15-day period. The customer doesn’t have to worry about missing out on a CD rate hike that happens just days after they open the CD. Even though Barclays doesn’t officially have this policy, you may be able to get the higher rate if you opened a Barclays CD right before the rate increased. Here’s what DA reader, Goldrush, reported in July 2018:

I opened a 5 year CD Sunday night (July 9) at the 2.25% rate. When I read ChasR's post on Depositaccounts.com on Tuesday (July 11) indicating that Barclays raised their 5 year CD rate to 2.30%, I called Barclays and asked if I could get the higher rate on the CD that I opened less than 48 hours ago. The CSR said that she would submit my request to bank management and it would take 2 business days to receive an answer. When I logged into my account 24 hours later, my CD was upgraded to 2.30%. Much better experience than I had with opening a Barclays CD four years ago. Thanks to ChasR for your timely post.

It’s nice to see an internet bank offering this kind of service that you might think you would only see at a brick-and-mortar bank.

For more details on the CD features, please refer to Barclays’ Terms and Conditions document (link is on the bottom of Barclays’ website).

To designate beneficiaries, social security numbers are now required. When I reported on Barclays’ CDs nine years ago, social security numbers were not required for the beneficiaries. When you’re logged into Barclays online banking, there’s an option that allows you to designate and change your beneficiaries. There’s now a required field for the beneficiary’s social security number.

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 PLC, a British multinational megabank.

Barclays Bank Delaware has an overall health grade at DepositAccounts.com of “A” with a Texas ratio of 2.71% (excellent) based on June 30, 2022 data. Please refer to our financial overview of Barclays Bank Delaware for more details. The bank has been a FDIC member since 2001.

In light of the recent bank failures and concerns over First Republic Bank, it makes sense to review a bank’s uninsured deposit levels. A high level of uninsured deposits puts a bank more at risk of a bank run. That’s not the case for Barclays. Based on December 31, 2022 FDIC data, the estimated percentage of uninsured deposits at Barclays was only about 6%. That’s far below the uninsured deposit levels of banks like First Republic which had an estimated percentage of uninsured deposits of about 67%.

How the 60-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationwide and have minimum deposit requirements of $10k or less, three credit unions and one bank have higher rates than currently offered on the Barclays 60-month CD. The following table compares the 60-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

The above information and rates are accurate as of 4/12/2023.

To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.