Review of First Internet Bank Nationally Available CDs

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Availability: Nationwide (internet bank)

While First Internet Bank (First IB) offered consistently good (and occasionally great) CD rates starting in 2016, those rates began a steady decline in early 2019. This past April, First IB did across-the-board CD rate increases (in the neighborhood of 20-25 bps), but those gains were short-lived. A series of five decreases began in early June, with rates finally stabilizing in early October. Although none of First IB CDs currently have outstanding rates, the longer-term CDs continue to be featured in DA’s bi-weekly CD Rates Summary. Any First IB CD can be opened with a $1k minimum deposit, with no stated balance cap.

APYMINMAXINSTITUTIONPRODUCTDETAILS
0.96%$1k-First Internet Bank60 Month CD
0.86%$1k-First Internet Bank48 Month CD
0.81%$1k-First Internet Bank36 Month CD
0.70%$1k-First Internet Bank24 Month CD
0.60%$1k-First Internet Bank12 Month CD
0.45%$1k-First Internet Bank6 Month CD
0.25%$1k-First Internet Bank3 Month CD
Rates as of March 7, 2021.

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.” About a year ago, 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

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

Trust Accounts

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. The fine print on the CD page reads,

Please 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.

Availability

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

First IB's 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.

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.

Bank Overview

First Internet Bank has an overall health rating of "A" on DepositAccounts.com, with a Texas Ratio of 2.58% (excellent), based on September 30, 2020 data. In the past year, First IB has increased its total non-brokered deposits by $413.84 million, an excellence annual growth rate of 15.74%. 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 22 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 $4.3 billion and continues to be recognized as a top online bank.

According to an October 2020 press release,

First Internet Bank announced today that it has again been named one of the Best Banks to Work For by American Banker and Best Companies Group. The annual program recognizes financial institutions for outstanding levels of employee engagement and corporate cultures. This marks the eighth consecutive year First Internet Bank has made the list.

How the CD Compares

Of all the CDs in First IB’s product line, the 60-month CD currently has the most competitive rate. 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 second.

The above rates are accurate as of 1/29/2021.

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

Related Pages: 1-year CD rates, 5-year CD rates, nationwide deals, Internet banks

Comments
P_D
  |     |   Comment #1
I've had a trust account here for about 7 years. I've only kept the minimum in there for about 5 or 6 of those years and view the account as one of the places to park funds in the event of an emergency because setting up formal trust accounts is more time consuming than other types of accounts and in a pinch I want to have other accounts at the ready. One thing I don't like about them is that their savings account with a somewhat competitive rate requires a $4k minimum balance to avoid fees.
First Internet Bank 60-Month CD APY Remains Competitive
Deal Summary: 60-month CD – 12-month, 1.72% APY, $1k minimum deposit

Availability: Nationwide (internet bank)

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...

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First Internet Bank Raises All CD Rates
Deal Summary: CDs – 12-month (2.89% APY), 24-month (3.11% APY), 48-month (3.30% APY), $1k minimum deposit.

Availability: Nationwide (pure internet bank)

With rate increases between 16 and 22 bps, First Internet Bank’s (First IB) has positioned its CDs within striking distance of the rate leaders. Of the eight CDs in First IB’s product line, the 12-month continues to be the most competitive. Any First IB CD can be opened with a $1k minimum deposit and there are no stated balance caps.

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First Internet Bank Ups All CD Rates
Deal Summary: 12-month CD (2.68% APY), $1k minimum deposit

Availability: Nationwide (pure internet bank)

About a month ago, I removed all of First Internet Bank’s (First IB) CDs from the bi-weekly Summary, because the APYs were falling behind in the quickly changing competitive rates race. Most of First IB’s CDs will be reinstated in next week’s Summary following this week’s rate increases.

The rate increases were either 15 or 16 bps for all CDs, with the exception of the 60-month CD which added 10 bps. Of all the...

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First Internet Bank Raises 12-Month CD Rate
Deal Summary: 12-month CD (2.22% APY), 18-month CD (2.32% AYP), 36-month CD (2.58% APY), and 48-month CD (2.68% APY), $1k minimum deposit

Availability: Nationwide (pure internet bank)

Last week, First Internet Bank (First IB) raised the rates on all its CDs for the fifth time in the past four months. The rate increases were 5 bps for all CDs, with the exception of the 60-month CD, which added 6 bps. Any First IB CD can be opened with a $1k minimum deposit and there are no stated balance...

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First Internet Bank's 12-Month CD APY Raised
Deal Summary: 12-month CD (2.10% APY), 48-month CD (2.58% APY), $1k minimum deposit

Availability: Nationwide (internet bank)

In the first two months of the year, First Internet Bank (First IB) raised the rates on all its CDs twice. First IB has upped its CD rates today for a third time in as many months, with increases between 3 and 16 bps. While the new APYs are not outstanding, the 12-month CD (2.10% APY) and 48-month CD (2.58% APY) are still quite competitive. First IB CDs can be...

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