CD Bank Substantially Increases All CD Rates

Dallas-based CD Bank hasn’t produced any really good CD rates for more than three years. The last blog post was in April 2019 when CD Bank was offering a 24-month CD earning 3.20% APY. A series of eight rate decreases began in May 2019, with all CD rates bottoming out in 2020. Those mediocre APYs remained in effect until yesterday, when CD Bank significantly raised all CD rates. Although the long-term CDs saw increases of between 214 and 237 bps, the 6-month CD (1.40% APY) and 9-month CD (1.75% APY) offer the most competitive rates in the product line.

CD Bank has also increased the minimum opening deposit from $10k to $100k for all its CDs.

The remainder of the CD product line, with good but not great rates, is listed below.

As stated in the Truth in Savings document, the Early Withdrawal Penalty reads as follows:

The withdrawal penalty on certificates with a maturity of less than one (1) year will be an amount equal to three (3) months interest on the amount withdrawn subject to penalty.

The withdrawal penalty on certificates with a maturity of one (1) year but less than two (2) years will be an amount equal to twelve (12) months interest on the amount withdrawn.

The withdrawal penalty on certificates with a maturity of two (2) years but less than three (3) years will be an amount equal to eighteen (18) months interest on the amount withdrawn.

The withdrawal penalty on certificates with a maturity three (3) years or longer will be an amount equal to twenty-four (24) months interest on the amount withdrawn.

The Truth in Savings document also states,

CREDITING FREQUENCY - Unless otherwise paid, interest will be credited at maturity for certificates with terms of one year or less. For certificates with terms greater than one year, interest is credited semi-annually.

WITHDRAWAL OF INTEREST PRIOR TO MATURITY - The annual [...] You can withdraw interest anytime during the term after the interest is credited to your account.

This policy is definitely not favorable (and possibly a deal breaker) for those who prefer monthly interest payments. On the other hand, it's beneficial for those who like to defer taxes for a year. If you open a 9-month CD now, interest won't be credited until 2023 and will apply to the 2023 tax year and not the 2022 tax year. I discussed shifting taxable income into the next tax year in a February 2020 blog post about the Ally Bank 11-month No Penalty CD. While deferring taxes on no-penalty CDs is a little controversial, it's straightforward for regular CDs.

Funding a CD can be done by ACH, wire transfer, or check, with the online application detailing the process. According to CSR, there is a $500k limit on incoming ACHs.

Not surprisingly, there is no information on CD Bank’s website about accessing maturing funds, with the exception of,

Final Maturity – If your account is not renewed,
the funds in the account will be paid directly to you.

When I last wrote about CD Bank in July, there were only two options for receiving those “Final Maturity” funds: cashier’s check to the address on file or a wire transfer ($15 fee). CSR informed me that outgoing ACHs are now available, but the withdrawal request process is a bit archaic and cumbersome. A written request (email is acceptable) to have the funds sent to you must be submitted on or before the CD maturity date, but that request must include a signature (can be an attachment to the email). In addition, a completed ACH withdrawal form must also be submitted. The ACH can be sent to any transactional account (checking or savings account) that belongs to at least one of the owners of the maturing CD.

Availability

Headquartered in Dallas, CD Bank (an internet division of Dallas-based TBK Bank, SSB) offers its services and product line to all U.S. citizens and resident aliens, 18 years or older, with a valid Social Security number.

The “Open Your Account” button (located on all of the pages of CD Bank’s website) leads to the online application. Funding a new CD can be done through electronic transfer from another bank account, by wire transfer, or by check.

Bank Overview

As an internet division of TBK Bank, SSB, CD Bank operates under TBK Bank’s FDIC Certificate and shares its financial history.

CD Bank/TBK Bank has an overall health grade of "A+" at DepositAccounts.com, with Texas Ratio of 5.93% (excellent) based on March 31, 2022 data. In the past year, the Bank has increased its total non-brokered deposits by $452.04 million, an excellent annual growth rate of 11.01%. Please refer to our financial overview of CD Bank/TBK Bank (FDIC Certificate #23498) for more details.

According to the Frequently Asked Questions page,

TBK Bank, SSB and CD Bank, a division of TBK Bank, SSB are the same FDIC-insured institution. Deposits held under each name are not separately insured, but are combined to determine whether a depositor has exceeded the $250,000 federal deposit insurance limit, per depositor for each account ownership category. For purposes of calculating aggregate deposits held in CD Bank, you should include deposits held in TBK Bank, SSB and Triumph Community Bank, a division of TBK Bank, SSB.

Established in 1981 as Franklin National Bank, the Bank rebranded in 2004 (Equity Bank, SSB) and 2010 (Triumph Savings Bank, SSB) before becoming TBK Bank, SSB in 2015. Following acquisitions in 2016 (Colorado East Bank & Trust), 2017 (Valley Bank & Trust, CO) and 2018 (Citizens Bank of Pagosa Springs, CO, Bank of New Mexico, and The First National Bank of Durango, CO), TBK Bank has become the 16^th largest bank headquartered in Texas, with assets in excess of $6 billion and more than 126,000 customer accounts.

How the 6-Month and 9-Month CDs Compare

When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally, one bank and one credit union have higher rates than currently offered on the CD Bank 9-month CD, regardless of minimum deposit requirements. The following table compares the 9-month CD to the two highest-rate CDs from other credit unions and the two highest-rate CDs from banks.

The above information and rates are accurate as of 6/28/2022.

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