As DA reader, bisenber, noted in a Forum post earlier this month, Bread Financial has again raised the rates on all its CDs and the High-Yield Savings account. Unlike previous rate increases that benefited the shorter-term CDs, the most recent rate increases boosted the 4-year CD (4.65% APY) and 5-year CD (4.75% APY) to near-rate leading status.
Any Bread Savings CD can be opened with a minimum $1.5k deposit. As stated on the Certificates of Deposit page, “Maximum deposit limit of $1 million per account and $10 million limit per customer."
CD interest is credited on a monthly basis and can be withdrawn at any time throughout the term. Automatic monthly transfers to a linked external account or to another Bread Financial account can be done by setting up a recurring transfer.
Early Closures Only
Bread Financial does not allow partial withdrawals; only early closures are allowed and are subject to the following Early Withdrawal Penalty:
For terms shorter than 1 year, the penalty is 90 days simple interest.
For terms 12 months to 3 years, the penalty is 180 days simple interest.
For terms 4 years and up, the penalty is 365 days simple interest.
According to the Truth-in-Savings for Certificates document, there is no language allowing the bank to deny an early closure request.
You are not permitted to withdraw a portion of your principal at any time prior to maturity. You may withdraw the entire principal amount prior to maturity, but you will be charged an early withdrawal penalty.
Funding and Accessing Maturing Funds
Funding a CD (minimum $1.5k) can be done by check, ACH or wire transfer, or transfer from another Bread Financial account.
As stated in the Truth-in-Savings disclosure,
You are also subject to a maximum deposit balance across all Accounts of $10,000,000 per Account owner for individual Accounts and $5,000,000 per Account owner for joint Accounts, for a maximum deposit balance limit of $10,000,000 per Account owner.
With respect to joint Accounts, for purposes of determining the maximum deposit balance permissible per Account owner, each joint Account owner will be attributed an equal portion of the balance of the joint Account. For purposes of calculating the maximum aggregate deposit balance permissible, for each Account owner and in each Account, deposit balances include:
- All Online Savings and CD Accounts held by the same Account owner at the Bank; and
- Principal plus interest earned and credited but not withdrawn.
There is a 10-day grace period before a CD will automatically renew. Maturing funds can be distributed by check, ACH or wire transfer, or transferred to a Bread Financial High-Yield Savings account.
The Deposit Account Terms document provides a great deal of useful information concerning how Bread Financial transactions work.
High-Yield Savings Account
Following a 50 bps increase about two weeks ago, the High-Yield Savings Account (HYSA) currently earns 3.50% APY on balances. In the past six months, a total of 250 bps has been added to the HYSA APY. The minimum opening deposit is $100, but the 3.50% APY applies to all balances between $1 and $10 million.
|3.50%||$100||$1m||Bread Financial||Bread Savings High-Yield Savings Account|
Funding and Accessing
Deposits made to the HYSA can be in the form of a check, ACH, wire transfer, or a transfer from another Bread Financial account. There is no limit on the number of external accounts that can be linked. According to CSR, the average hold time for an ACH transfer is between 1-3 business days, with hold times for larger amounts (six figures plus) being slightly longer, but a variety of reviews by DA readers dispute those hold times. (See DA Reader Reviews below.)
This is a standard online savings account with no ATM/debit card; any withdrawals must be made through ACH or wire. There are no dollar limits on ACH withdrawals initiated by an external bank. There is no excessive transaction fee for withdrawals in excess of the standard six withdrawals per statement cycle, because withdrawals beyond the six are not permitted. If you do attempt to make a seventh withdrawal, Bread Financial may “deny and/or reject the transfer, and we may close your Account.”
While a Bread Financial account is fee-free (including free monthly maintenance, ACH transfer, online statements, and incoming wire transfers), there are three fees to be aware of:
- $5 per request for paper statements
- $15 per request for paper check withdrawal
- $25 per request for outgoing wires
Unlimited payable-on-death (POD) beneficiaries are allowed. Social Security numbers are NOT required for beneficiaries and percentages can be designated. Charities/non-profits cannot be named as a beneficiary, but trusts can be designated.
The Deposit Account Terms document provides a great deal of useful information about the ins-and-outs of Bread Financial transactions for all accounts.
Reviews by DA Readers
It is a good bank if you just want to park extra money you have for a great interest rate. if you are going to make frequent transactions for large sums then you should look elsewhere.
Three important issues have been noted by DA readers in reviews of Bread Financial:
- Having to recreate links to an external account after the account is opened. The link that was created during the application and initial funding process is not maintained.
- Actual hold times are much longer than the theoretical hold times mentioned by CSR: ten business days for the first 30 days and 5 business days thereafter.
- Small outgoing ACH transfer limits of $5k per day and $30k per month.
The May 11, 2022 review (Easy to Move Your Money In, Hard To Get It Out) written by DA reader, vaylie, is definitely worth reading. vaylie begins by stating,
Re-posting my old review since their name change wiped out almost 60+ old negative reviews on this site.
While the Bread Financial rebrand did trigger a new DA page, all the previous reviews written about Comenity Direct mentioned by vaylie can be found using this link.
Headquartered in Columbus, Ohio, Bread Financial offers accounts to U.S. citizens or resident aliens, 18 years or older, who have a valid Social Security number and a current street address in the U.S. (no PO Boxes allowed).
Only individuals may open a Bread Financial sole or joint ownership account. Custodial accounts and trust accounts are not permitted, but as mentioned above, trusts can be named as a beneficiary.
As a “pure” internet bank, Bread Financial has no brick-and-mortar branches. Opening an account can only be done online.
Bread Financial has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 8.61% (excellent) based on June 30, 2022 data. In the past year, Bread Financial increased its total non-brokered deposits by $2.07 billion, an excellent annual growth rate of 56.36%. Please refer to our financial overview of Bread Financial (FDIC Certificate # 57570) for more details.
When I wrote about the now-defunct Comenity Direct in early March, I stated,
While Comenity Direct is the newest member of the Comenity family, Comenity Bank and Comenity Capital Bank have 30 years of experience of providing financial services. Comenity is best known for its private-label and co-branded credit cards at more than 100 retailers.
All that changed in late March 2022 when the Bread Financial rebrand occurred. According to an April 25, 2022 press release,
Bread Financial (NYSE: BFH), a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, announces its former Comenity Direct consumer deposit brand is now Bread Savings. The name change reflects the rebranding of Alliance Data to Bread Financial, which was announced on March 23.
All Comenity Direct, Comenity Bank, and Comenity Capital Bank accounts are now housed under the Bread Financial umbrella.
How the 4-Year and 5-Year Bread Savings CDs Compare
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, only one credit union has a higher rate than currently offered on the Bread Financial 4-Year and 5-Year Bread Savings CDs. The following table compares the 4-Year and 5-Year Bread Savings CDs to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.
|APY||CD Term (Early Withdrawal Penalty)||Credit Union/Bank|
|4.76%||48-Month CD (EWP=270 days)||Pelican State Credit Union|
|4.65%||4-Year Bread Savings CD (EWP=365 days)||Bread Financial|
|4.59%||48-59 Month CD (EWP=180 days)||Department of Commerce Federal Credit Union|
|4.55%||48-Month CD (EWP=180 days)||Crescent Bank|
|4.47%||4-Year CD (EWP=450 days interest)||KS StateBank|
|APY||CD Term (Early Withdrawal Penalty)||Credit Union/Bank|
|4.97%||60-Month CD (EWP=270 days)||Pelican State Credit Union|
|4.75%||5-Year Bread Savings CD (EWP=365 days)||Bread Financial|
|4.70%||60-84 Month CD (EWP=180 days)||Department of Commerce Federal Credit Union|
|4.64%||Senior Citizens 60-Month CD (EWP=180 days interest)||State Bank of India (IL)|
|4.60%||60-Month CD (EWP=180 days)||CFG Bank|
The above information and rates are accurate as of 11/22/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.