It's hard to find good deals on no-penalty CDs. For nationwide deals, Ally Bank's 11-month no-penalty CD has been one of the best deals. However, that rate has been falling, and its rate is now only 1.10% APY (as of 5/8/11). There are some better local no-penalty CD deals, and one of them is being offered at First Commons Bank in the suburbs of Boston. It's offering a 15-month breakable CD with a 1.25% APY. Minimum deposit is $10,000. The customer is allowed a one-time penalty free withdrawal before maturity. The downside to this CD is that it requires an active checking account, otherwise the rate falls to 0.75%. The required checking activity is three online bill payments per month of $50 or more to 3 different parties. This promotion is listed at the top of the bank's rates page as of 5/8/2011.
A branch visit appears to be required to open an account. It's a small bank with one office located in Newton Center, Massachusetts.
The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) based on December 2010 data. Please refer to our financial overview of First Commons Bank for more details. The bank has been a FDIC member since 2009 (FDIC Certificate # 58923).
How It Compares
For CDs with terms around one year, it's not easy to find yields much higher than 1.25%. As of 5/8/2011, the best 1-year CD rate available nationally is 1.75% APY at Connexus Credit Union, but this requires an active checking account. The best 1-year CD rate without a checking requirement is 1.41% APY at Melrose Credit Union. Neither of these are no-penalty CDs.
The only way to get a yield above 2.00% is to take a longer term. Ally Bank's 5-year CD has a 2.40% APY (as of 5/8/2011), and due to its small early withdrawal penalty, the effective yield if closed after one year would be 2.00% (see post).
To search for the best CD rates nationwide and in your state, please refer to our CD rates table.