It’s been 16 months since I last wrote about any First Internet Bank (First IB) CD. While First IB had offered consistently good (and occasionally great) CD rates starting in 2016, those rates began a steady decline in early 2019. In late March, First IB did across-the-board CD rate increases which partially reversed large mid-March rate cuts; a small adjustment last week lowered the APY to 1.72%. All First IB CDs can be opened with a $1k minimum deposit, with no stated balance cap.
This is where I would normally mention IRA CDs, but First IB is no longer offering IRA CDs. The IRA page states, “At this time, First Internet Bank is not accepting applications for new IRA accounts.” In February, DA reader, mountain52, shared an email sent by First IB, which reads in part,
First Internet Bank has made the decision to no longer offer Individual Retirement Account Certificates of Deposit (IRA CDs) and Money Market IRAs. We recognize the importance of your long-term retirement goals and want to ensure that you have ample time to transfer, roll over or withdraw the funds in your existing IRA account(s).
Here’s what you can expect moving forward:
Beginning immediately, you may transfer, roll over or withdraw your IRA CD/Money Market IRA funds prior to maturity without bank penalty.
On October 1, 2020, we will no longer maintain IRA CDs and Money Market IRAs. On this date, we will close any remaining account(s), pay all accrued interest and mail the proceeds to you.
Early Withdrawal Penalty
As stated in the Truth in Savings disclosure, the Early Withdrawal Penalty reads as follows:
Any withdrawal prior to the maturity date will result in a penalty of 360 days worth of interest.
First IB permits CDs and savings accounts to be opened in the name of a trust. As stated on the online application,
For any trust accounts, we require copies of trust documents verifying trustee(s).
Please submit via recommended instructions listed at the completion of the application.
Funding and Accessing Maturing Funds
Funding a CD (ACH or wire transfer) must be done when the online application is submitted and the rate will be locked in when the funding is received. The fine print on the CD page reads,
Be sure to check this page after 10 AM Eastern for the rate that will be honored today.
Accessing maturing CD funds from internet banks can be a concern, as some institutions make it much easier to deposit your money then withdraw it. 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.
Immediate access to maturing funds is also possible.
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.
Headquartered in Fishers, Indiana, First Internet Bank is a "pure" internet bank, providing banking services and products nationwide. All First IB accounts can be opened online, but First IB also allows CDs to be opened through the mail.
CD rates are guaranteed as of the postmark date on the envelope
containing the signed application and funding for the account.
First Internet Bank has an overall health rating of "A" on DepositAccounts.com, with a Texas Ratio of 2.48% (excellent), based on December 31, 2019 data. In the past year, First IB has increased its total non-brokered deposits by $584.35 million, an excellence annual growth rate of 28.24%. 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 following 20 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 $4.1 billion and continues to be recognized as a top online bank.
According to an October 2019 press release,
First Internet Bank announced it has once again been recognized as one of the Best Banks to Work For. This annual program by American Banker and Best Companies Group salutes financial institutions nationwide that exhibit unique corporate cultures and high employee engagement. This year’s recognition marks the seventh consecutive year First Internet Bank has made the list – as it has every year since Best Banks to Work For was initiated in 2013.
How the CD Compares
When compared to the similar length-of-term CDs tracked by DepositAccounts.com, offered by internet banks, First Internet Bank’s 60-month CD APY* currently ranks fourth, regardless of minimum deposit requirements.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.05% APY||5-Year Promotional CD ($10k)||The Federal Savings Bank|
|1.80% APY||5-Year CD ($1.5k min)||Comenity Direct|
|1.75% APY||5-Year Jumbo CD ($100k min)||CIT Bank|
|1.72% APY||60-Month CD ($1k min)||First Internet Bank|
The above rates are accurate as of 5/11/2020.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
*We continue to update our rates tables, but are just too many rate cuts for us to process the changes quickly. For the time being, please be aware that the rates listed at DepositAccounts may not reflect the latest rates published by the banks and credit unions.