4.25% 6-Month CD at a California Bank (Vineyard)

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Update 8/23/08: The special 4.35% APY 12-month CD is no longer listed at the bank's website. The title has been modified to reflect this change.

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.

Financial Health

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.
Comments
Anonymous
Anonymous   |     |   Comment #1
4.5% for 6 months? That's a great rate right now. I've emailed them to see if one can open up a CD with them online or via postal mail. I know it's only open to CA residents, but their closest branch is still 80 miles away from me. Nice find!
Anonymous
Anonymous   |     |   Comment #2
Let us know what they say about opening online etc. When I enquired (I think it was last summer) they said the initial application had to be in person but that you could conduct business online after that.
Anonymous
Anonymous   |     |   Comment #3
I received a reply:

"Thank you for your interest in Vineyard Bank. At this time we require all new accounts to be opened in a physical branch. Please refer to our branch locations on our home page, www.vineyardbank.com . If you require further assistance, please feel free to contact me directly at 951 271 4521. -- Julian V Montanez "

Well that sucks the big one! :( I really wanted to put some funds into this 4.5% 6month cd.
glxpass
glxpass (anonymous)   |     |   Comment #4
Let us know what they say about opening online etc. When I enquired (I think it was last summer) they said the initial application had to be in person but that you could conduct business online after that.

I confirmed that this policy still exists: first-time customers must open an account with a branch visit in order for identity verification. A suggestion has been made to allow notarization in lieu of opening an account in person, but management hasn't responded to that suggestion yet.
Anonymous
Anonymous   |     |   Comment #5
I spoke with a CSR just now to ask whether you can fund with ACH after opening the account in-branch. The answer is no -- you have to bring a check into the branch, or fund via wire (but pay wire fees). A bit of a pain, having to move money from high yield online savings account to my checking account.

Note these guys just signed a consent decree with the OCC today, having to do with internal controls and capitalization. You definitely want to stay under the FDIC limits with this one.
Anonymous
Anonymous   |     |   Comment #6
Interesting. I was the original poster to comment on this thread. Vineyard Bank actually took the time to work with me after I suggested that they accept notarized applications. They worked with me to sign documents at one of their Construction Loan offices in Los Altos, CA (vs. their retail San Rafael branch) to open an account. Los Altos is about 15 miles away from San Jose vs. 80 miles for San Rafael.

They did this on a special handling basis. We deposited 20K. I'm not sure if they'll do this for $5k, but if you have a decent amount you want to deposit, then they'll work with you if you're in the SF Bay Area and are willing to drive to their Los Altos Construction Loan division.

Overall I had a pretty nice experience opening this CD account. 6 months with 4.5% is unbeatable right no!
Banking Guy
Banking Guy (anonymous)   |     |   Comment #7
Glad to read they are willing to work new customers who may not be near their bank branches. Thanks for sharing your experience.
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I last reported on this bank in April when they were offering a 3.90% 3-month and 3.60% 7-month CD.

Financial Health

As I reported in the last post, Vineyard has been hit hard by bad home...





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3.90% 3-Month / 3.60% 7-Month CD at a California Bank (Vineyard).
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Vineyard Bank is offering two promotional CDs: a 3.90% APY 3-month CD and a 3.60% APY 7-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.

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