First Internet Bank Continues To Raise Short-Term CD Rates

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Deal Summary: 12-month CD (1.62% APY), 18-month CD (1.70% APY), $1k minimum deposit

Availability: Nationwide (internet bank)

In January, First Internet Bank (First IB) began raising the rates its 12- and 18-month CDs. First IB continued that trend this week, with the 12-month (1.62% APY) and 18-month (1.70% APY) achieving their highest rates in more than seven years. In the past nine months, the 12-month CD gained 46 bps, with the 18-month CD gaining 39 bps.

The minimum deposit for any First IB CD is $1k, with no stated balance cap. The CDs are also available as IRAs (Traditional, Roth, and CESA), earning the same APY and with the same funding requirements.

As I mentioned in the June 20, 2017 CD Rates Summary, most CDs are on a flattening yield curve (little difference between short- and long-term rates). First IB CDs are no exception to this trend, with only 68 bps between its 12-month CD (1.62% APY) and 60-month CD (2.30% APY). When I made the same observation in June, the difference between the 12- and 60-month CDs was 80 bps.

According to First IB’s CD Overview page, the Early Withdrawal Penalty for the 12-month or 18-month CD is 180 days interest.

Accessing Your Funds

I’ve addressed the concern about accessing maturing CD funds from internet banks before, but it’s worth another mention. 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 that’s not to your liking,

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.

When I spoke with CSR, I had hoped there might be a third option to retrieve funds, ideally an ACH transfer back to the original funding account. CSR cited the two methods listed in the FAQs as the only options available.

Availability

Headquartered in Fishers, Indiana, First Internet Bank provides internet banking services and products nationwide. All First IB accounts can be opened online, but First IB does allow CDs to be opened through the mail.

CD and IRA 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 4.06% (excellent), based on June 30, 2017 data. In the past year, First IB increased its total non-brokered deposits by $358.78 million, excellent annual growth rate of 25.91% growth rate. Please refer to our financial overview of First Internet Bank (FDIC Certificate # 34607) for more details.

Opening its virtual doors in early 1999, First Internet Bank was the first state-chartered, FDIC-insured institution to operate solely via the internet. In the following 17 years, First IB accumulated accolades (including being named #1 Online Bank by Gomez Advisors in 2001), while expanding in size and scope. Currently, First IB holds assets in excess of $2.3 billion and continues to be recognized as a top online bank.

In an August 2017 press release,

First Internet Bank announced it has earned the tenth spot on the list of the Best Banks to Work For, a nationwide ranking by American Banker and Best Companies Group. First Internet Bank has earned the distinction every year since the program was created in 2013. The 2017 “Best Banks” list recognizes 75 employers in the banking industry.

How the CDs Compare

When compared to 206 similar length-of-term CDs tracked by DepositAccounts.com, requiring a similar minimum deposit and available nationally, First Internet Bank’s 12-month CD APY currently shares the top spot with TIAA Direct’s 12-month CD and EverBank’s1-year Yield Pledge CD.

Interest RateCD Length of TermCredit Union/Bank
1.62% APY12-Month CDFirst Internet Bank
1.61% APY12-Month CDState Bank of India
1.60% APY12-Month PurelyCDBankPurely

When compared to 142 similar length-of-term CDs tracked by DepositAccounts.com, requiring a similar minimum deposit and available nationally, First Internet Bank’s 18-month CD APY currently ranks third.

Interest RateCD Length of TermCredit Union/Bank
1.81% APY15-Month Special CDVeridian Credit Union
1.78% APY20-Month CDEBSB Direct
1.70% APY18-Month CDFirst Internet Bank

The above rates are accurate as of 9/29/2017.

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

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

Comments
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