Earlier this month, First Internet Bank (First IB) raised the rates on its 12- and 18-month CDs. Those increases made both CDs the most competitive nationally available CDs (in their respective term categories) offered at brick-and-mortar banks and internet banks.
First IB raised the rates on all its CDs on Wednesday, with increases ranging from 5 to 31 bps. These new APYs have made the shorter-term CDs rate leaders and the long-term CDs near-rate leaders.
The minimum deposit for any First IB CD is $1k, with no stated balance cap. They are also available as IRAs (Traditional, Roth, and CESA), earning the same APYs and the same funding requirements.
As I mentioned in the earlier First IB blog post, its CDs are on a flattening yield curve, with only 78 bps between its 12-month CD (1.52% APY) and 60-month CD (2.30% APY).
According to First IB’s CD Overview page, the Early Withdrawal Penalty for the 6-, 12-, and 18-month CDs is 180 days interest, and 360 days interest for the 24-, 36-, 48-, and 60-month CDs.
I’ve mentioned this before, but it bears repeating, since accessing the funds from maturing CDs at internet banks can be problematic. 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.
According to CSR, an ACH transfer back to the original funding account is not possible. The two methods listed in the FAQs are the only options available.
Money Market Savings
First IB’s Money Market Savings also saw a 16 bps increase this week, resulting in an APY of 1.16% on balances of $250k+; balances below $250k earn 0.90% APY. While the Money Market Savings experienced a rate increase in late February (1.00% APY), its previous rate (0.80% APY) was in effect for more than five years.
|1.16*%||$250k||-||First Internet Bank of IN||Money Market Savings|
|OTHER TIERS: 0.90% → Up to $250k|
The Money Market Savings can be opened with a minimum $100 deposit. There is a $5 monthly maintenance fee that can be waived with an average daily balance of $4k. There is also an excessive withdrawal fee of $5 per withdrawal beyond the six monthly free transactions. Foreign ATM fees will be reimbursed up to $10 per month.
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.
First Internet Bank has an overall health rating of "A" on DepositAccounts.com, with a Texas Ratio of 4.53% (excellent), based on March 31, 2017 data. In the past year, First IB increased its total non-brokered deposits by $346.19 million, excellent annual growth rate of 28.04% 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 billion and continues to be recognized as a top online bank.
How the CDs Compare
When compared to similar length-of-term CDs tracked by DepositAccounts.com, requiring a similar minimum deposit and available nationally, First Internet Bank’s shorter-term CD APYs currently rank at the top or near the top.
The above rates are accurate as of 6/30/2017.