I reported on two no-penalty CDs on Sunday, but as I mentioned on Sunday, it's hard to find good deals on no-penalty CDs. For nationwide deals, Ally Bank's 11-month no-penalty CD has been one of the best deals. However, that rate has been falling, and its rate is now only 1.10% APY (as of 5/11/2011). I found another better local no-penalty CD at First Virginia Community Bank. It's offering an 18-month No Penalty CD with a 1.20% APY as of 5/11/2011. Minimum deposit is $1,000. It allows one penalty-free withdrawal anytime after the funds have been on deposit for 7 days. This CD is mentioned on the bank's home page in the rotating image. However, it doesn't list the rate. I had to call the bank for the rate. I was told it could change at anytime.
I was told they accept deposits from anyone in the Washington DC metro. A branch visit is required for new customers. First Virginia Community Bank branches are located in Fairfax and Manassas.
The bank has an overall health score at DepositAccounts.com of 4 stars (out of 5) and a Texas Ratio of 14.62% (above average) based on December 2010 data. Please refer to our financial overview of First Virginia Community Bank for more details. The bank has been a FDIC member since 2009 (FDIC Certificate # 58696).
How It Compares to the Best CD Rates
For CDs with terms of 18 months, the best CD rate available nationwide is 1.55% APY at Alliant Credit Union (as of 5/11/2011). However, it's unfair to compare a no-penalty CD to one that has an early withdrawal penalty. Without a penalty, you can make the CD into any short-term CD that you want. If you compare this with terms under one year, the only nationwide deal that's better is Salem Five Direct savings account promotion which guarantees 1.25% APY until April 1, 2012.
Another option is Ally Bank's 5-year CD that is closed early. It has a 2.40% APY (as of 5/11/2011), and due to its small early withdrawal penalty, the effective yield if closed after one year would be 2.00% (see post).
To search for the best CD rates nationwide and in your state, please refer to our CD rates table.