New Top 12-Month CD Rate at DollarSavingsDirect
DollarSavingsDirect has made a nice change to its CD offering. It has long been offering a 16-month CD, and as I described two weeks ago, the rate has been competitive. The bank just changed the term to a 12 months, and it has also raised the rate to 1.05% APY. Minimum deposit is $1,000.
As I described two weeks ago, DollarSavingsDirect now has its CD listed on its website. In addition, they have an online application, and you no longer need to have the DollarSavingsDirect savings account before you open the CD. More details about the CD are described in the bank’s FAQ page.
DollarSavingsDirect’s parent, Emigrant Bank, first launched the internet bank EmigrantDirect around the start of 2005. It was offering a savings account with a 3.00% APY which was much higher than the other internet banks. As a comparison, ING DIRECT was offering a 2.00% APY savings account at that time. Those rates then rose through 2005 and 2006. EmigrantDirect’s savings account rate peaked at 5.15% APY in 2006. Emigrant Bank launched DollarSavingsDirect in 2008 with a savings account rate slightly higher than EmigrantDirect’s rate, but the savings account requires a $1K minimum balance. Those savings account rates slowly fell and became subpar in the last few years.
Emigrant Bank’s financial health has improved some over the last few years. In my last post on this bank three years ago, it had an overall health score at DepositAccounts.com of 2 stars (out of 5). It now has a health score of 4 stars (out of 5) with a Texas ratio of 36.10% (average) based on March 2013 data. Please refer to our financial overview of Emigrant Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 12054).
How This CD Rate Compares
The only other internet bank offering 1.05% APY for a 12-month term is GE Retail Capital Bank, but this requires a $25,000 minimum deposit. Connexus Credit Union offers 1.10% APY for a 1-year CD, but this requires an active checking account with direct deposit. These rates are accurate as of 6/21/2013.
Searching for the Best CD Rates
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.
Today, July 24, I completed an app for a one-year CD. However, I was soon diverted to the savings account app. I called and they said that one must apply for the savings account ($1.00 minimum); wait until two test ACH transfers are made; then after five business days, go online and convert most of the amount deposited into a CD.
Any thoughts? The person I spoke with had no idea why the direct CD application would have been mentioned anywhere and the website does not allow you to directly apply for the CD.
Thanks.