Update 4/27/2012: I was informed by the bank that the maximum deposit of the 5-year PlatinumBlue Rising Rate CD has been reduced from $100,000 to $25,000.
I'm afraid that 5-year CDs with a 3.00% yield are very rare these days. I found one being advertised by Belmont Savings Bank in Massachusetts. However, it's not a typical buy-and-forget CD. It's called PlatinumBlue Rising Rate CD. It has a blended APY of 3.00% for a 5-year term. This special is listed in the bank's promotion page as of 2/13/2012. The CD APY starts at 1.00% in year one, and it steps up by one percentage point each year until maturity. The CD APY ends at 5.00% during year 5. Minimum deposit is $500, and the maximum deposit is
$100,000 $25,000 with a limit of one CD per customer.
The catch is that to qualify for this 3.00% blended APY, the customer must have an active PlatinumBlue Checking account. PlatinumBlue Checking is considered active with direct deposit or $2500 average daily balance or 5 debit card POS (pinned or signature) transactions or 5 third party cleared checks per monthly statement cycle. After account opening, the APY will change to 1.00% if the PlatinumBlue Checking account is inactive in a statement cycle.
Another downside is that if you don't keep the PlatinumBlue Checking active, you'll be hit with a $25 monthly service charge. This is stated in the small print in the PlatinumBlue Checking promo page.
In addition to this CD, the bank has a PlatinumBlue Savings account with a competitive yield of 1.15% APY. Just like the CD, this savings account requires that you maintain an active PlatinumBlue Checking account to qualify for this rate. This 1.15% APY is listed in the PlatinumBlue Savings promo page as of 2/13/2012.
In the small print of the CD promotions page, it states "Massachusetts residents only". Belmont Savings Bank branches are located Belmont and Watertown which are in the suburbs of Boston.
The bank has an overall health score at DepositAccounts.com of 4 stars (out of 5 stars) with a Texas Ratio of 7.94% (excellent) based on September 2011. Please refer to our financial overview of Belmont Savings Bank for more details. The bank has been a FDIC member since 1982 (FDIC Certificate # 23901). The bank also has excess deposit insurance through the Deposits Insurance Fund (DIF) for Massachusetts-chartered savings banks. I reviewed DIF and other private deposit insurance programs in this post.
My Take and How This Rate Compares
This PlatinumBlue Rising Rate CD looks like a mix between a CD and a reward checking account. It's like a CD in that you can get a guaranteed rate over a certain period of time. It's like a reward checking account in that you have to qualify each month for the high rate by meeting the monthly activity requirements. These requirements might be a deal killer for many, but if it can allow the bank to offer 3.00%, it may be worth the effort for some. For a $100K balance, an extra 1.00% interest rate results in an extra $1,000 per year.
I would prefer 3.00% without the monthly requirements. However, I like having more choices. So I would prefer this over no 3.00% CD. This reminds me of the CDs that Connexus Credit Union offers. Like Belmont, Connexus requires an active checking account to qualify for the top rate of its CDs. Unlike Belmont, Connexus is available to people in all states. Unfortunately, Connexus Credit Union's 5-year CD APY is only 2.00%, so there's no reason to choose this CD over regular CDs at other credit unions.
The best rate from a regular 5-year CD that's available nationwide is 2.30% APY at Andrews FCU and at Fort Knox FCU.
The above rates are accurate as of 2/13/2012.
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.