Update 8/16/08: The yields on the special CDs have fallen. The new specials include a 4.35% APY 12-month CD and a 4.25% APY 6-month CD. The title has been modified to reflect this change.
Update 8/08/08: The yield on the special 12-month CD has been increased from 4.35% to 4.50% APY. The title has been modified to reflect this change.
Vineyard Bank has just come out with a very attractive CD promotion that includes a 4.15% APY 3-month CD, a 4.50% APY 6-month CD and a 4.35% APY 12-month CD. The minimum deposit is $1,000. The maximum deposit is $95,000 per household. If a Vineyard Bank checking, savings or money market account is opened in conjunction with the CD, the maximum deposit is $5 million. The offer is only available to California residents.
I last reported on this bank in May when they were offering a 4.05% 7 and 12-month CDs. They were also offering CD specials in April, so each month this bank has been ratcheting up the rates.
As I reported in the last post, Vineyard has been hit hard by bad home loans. According to this San Bernardino County Sun article:
Vineyard is so troubled that it's on the hunt for money to satisfy regulatory requirements. The bank's connection with the Inland Empire's real-estate mess is emerging as it reports millions of dollars in loan losses.
I just found the following at the bank's SEC Filings page. It's on page 6 of their 10-K filed on 5/19/2008:
On May 5, 2008, the Bank was informed in writing by the OCC that, as a result of an examination, the Bank has been designated to be in a "troubled condition" for purposes of Section 914 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Over the last year, Bankrate's rating of Vineyard has fallen from 4 stars to only 1 star (1-star rating is based on 3/31/08 data). So as I recommend with any bank, make sure you keep your deposits under the FDIC limits (which would probably rule out a $5 million deposit).
Branches are located in several cities in Southern California including San Diego, Manhattan Beach, San Dimas, Walnut, Irvine, and Upland. The bank has been FDIC insured since 1981 (FDIC certificate # 23498).
Thanks to the reader who mentioned this CD promotion in the Finding the Best Deals post.
Other High Certificate of Deposit Yields
With large banks like Bank of America offering 4.11% APY on short-term CDs, I can see how small banks with poor financial health would have to raise their rates to compete. For those who don't want any worries of bank failures regardless of FDIC insurance, Bank of America may be a better choice. For those who prefer the higher yields and feel comfortable with FDIC protections, these small banks may be the better choice. It's up to you to decide. For more details about Bank of America's CD promotion and CD promotions from other major banks, please refer to my latest weekly summary.