First Internet Bank 12-Month CD Is Now A Rate Leader

It’s been more than two years since I wrote about First Internet Bank (First IB), which is rather surprising. While offering consistently good (and occasionally great) CD rates starting in 2016, those rates began a steady decline in early 2019 and reached all-time lows during the pandemic in late 2020. About 17 months ago, First IB CD rates started to inch upward, but never becoming rate leaders. Following a 26 bps increase at the end of June, the 12-month CD currently has a rate-leading 5.48% APY. The 12-month CD can be opened with a $1k minimum deposit, with no stated balance cap.

First IB rates of other CD terms aren't quite rate leaders, but most are competitive. Please refer to this DA page for the full list of First IB CD rates.

This is where I would normally mention IRA CDs, but as of October 1, 2020, all IRA CDs and Money Market IRAs were closed. The IRA page states,

At this time, First Internet Bank is not accepting applications for new IRA accounts.
The IRA Service Center link is available for customers with a grandfathered IRA.

Early Withdrawal Penalty

First IB clearly lists its Early Withdrawal Penalties on its Certificate of Deposit page.

• 90 days interest – 3-month CD
• 180 days interest – 6-, 12-, and 18-month CDs
• 360 days interest – 24-, 36-, 48-, and 60-month CDs

Availability and Account Opening

Headquartered in Fishers, Indiana, First Internet Bank is a "pure" internet bank, having no brick-and-mortar branches.

First IB banking services and product line are offered to all U.S. citizens and resident aliens, who are 18 years or older, have a valid Social Security number, and have a government issued ID.

As the bank's name would suggest, opening a First Internet Bank 12-month can only be done online.

Funding and Other Details

The following was obtained from 12-month Truth-in-Savings disclosure and a Live Chat with CSR.

• Funding – ACH or wire.
• Ownership – Individual, joint, or trust.
• Interest – Compounded/credited monthly; can be transferred to a First IB savings or checking account.
• Maturing Funds* – Internal transfer or check.
• Beneficiaries – Unlimited, with equal shares; Social Security numbers are required.
• Grace Period – 10 calendar days before automatic renewal.
• Credit Check – ChexSystems.

*According to First IB’s FAQs,

If you notify us in writing prior to the maturity date that you do not wish to renew the CD, we will close the CD on the maturity date and mail a check to you for the balance of your CD.

If you also have a First IB checking or savings account, you may use online banking by going to Additional Services, then CD Maturity Options. You can transfer the entire
balance of your mature CD into your checking or savings account and close the CD.

Bank Overview

First Internet Bank has an overall health rating of "A" on DepositAccounts.com, with a Texas Ratio of 1.17% (excellent), based on March 31, 2023 data. In the past year, First IB’s total non-brokered deposits decreased by -$17.26 million, an average annual growth rate of -0.58%. Please refer to our financial overview of First Internet Bank (FDIC Certificate # 34607) for more details.

First Internet Bank was the first state-chartered, FDIC-insured institution to operate solely via the internet when its virtual doors opened for business in early 1999. In the next 24 years, First IB accumulated accolades (including being named #1 Online Bank by Gomez Advisors in 2001), while expanding in size and scope. First IB currently has assets in excess of $4.7 billion and continues to be recognized as a top online bank.

According to a June 2023 press release,

First Internet Bank announced today that two media outlets, Investopedia, a leading financial news and education source, and CNET, a technology-oriented review site, listed two of the bank’s accounts as leaders in their individual categories.

Through its independent review process, Investopedia, determined First Internet Bank’s high-yield Business Money Market Savings account was among the best for established businesses. The account delivers a high interest rate, low minimum opening deposit and additional FDIC-insurance for larger deposit amounts.

Additionally, CNET rated the Tomorrow’s Tycoons savings account best for teenagers. The review noted, “First Internet Bank’s Tomorrow’s Tycoons account checks all the most important boxes of a kids’ savings account: no fees and the ability to earn interest.”

How the 12-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationwide and have minimum deposit requirements of $10k or less, no banks or credit unions have a higher rate than currently offered on the First Internet Bank 12-month CD. The following table compares the 12-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

The above information and rates are accurate as of 7/8/2023.

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