Earlier this week, I wrote about the High-Yield Savings account offered by Ivy Bank, which is the new digital division of Massachusetts-based Cambridge Savings Bank. In addition to the High-Yield Savings account, Ivy Bank’s inaugural product line contains three CDs: 5-year (1.00% APY), 3-year (0.75% APY), and 1-year (0.60% APY). Of the three, the 5-year CD has the most competitive rate. The minimum opening deposit for any of the CDs is $1k, with a maximum account balance of $1 million.
|1.00%||$1k||-||Ivy Bank||5 Year CD|
|0.75%||$1k||-||Ivy Bank||3 Year CD|
|0.60%||$1k||-||Ivy Bank||1 Year CD|
As stated in the CD Truth-in-Savings disclosures,
CREDITING FREQUENCY – Interest will be credited to your account monthly. Alternatively, you may choose to have interest paid electronically to another Ivy Bank account every month rather than credited to this account.
TRANSACTION LIMITATIONS – You may not make any deposits to your account before maturity.
You may make withdrawals of principal from your account before maturity. Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty. Except in cases of complete withdrawal, no such withdrawal before maturity shall reduce the remaining balance of the account below the $1,000 minimum balance.
You can only withdraw interest credited in the term before maturity of that term without penalty. You can withdraw interest at any time during the term of crediting after it is credited to your account.
EARLY WITHDRAWAL PENALTIES (a penalty may be imposed for withdrawals before maturity):
- If your account has a maturity of five years: The fee we may impose will equal 270 days simple interest on the amount withdrawn subject to penalty.
- If your account has a maturity of three years: The fee we may impose will equal 180 days simple interest on the amount withdrawn subject to penalty.
- If your account has a maturity of one year: The fee we may impose will equal 90 days simple interest on the amount withdrawn subject to penalty.
AUTOMATICALLY RENEWABLE TIME ACCOUNT – This account will automatically renew at maturity for the same term at the Ivy Bank rate effective at maturity, unless you notify us of changes to your account within 10 calendar days after the maturity date.
According to CSR, funding a CD can be done by an ACH, a domestic wire transfer, or by mailing a check. Once a CD matures, the distribution options include “an electronic transfer of funds or an official check.”
A maximum of two beneficiaries (equal shares) can be added to a CD, with name, address, date of birth, and Social Security number required.
Headquartered in Cambridge, Massachusetts, Ivy Bank is an internet bank that opened its virtual doors for business about a month ago, when Cambridge Savings Bank announced the launch of Ivy Bank, its “digital-only division.”
U.S. citizens and residents of the United States (with the exception of California residents), 18 years or older, with a valid Social Security number and a valid e-mail address are eligible to open an account. Opening a CD can only be done online.
Ivy Bank is a digital banking division of Cambridge Savings Bank. Deposits at Ivy Bank and Cambridge Savings Bank are combined for the purpose of calculating FDIC insurance limits and are not separately insured.
Ivy Bank/Cambridge Savings Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.48% (excellent) based on March 31, 2021 data. In the past year, the Bank increased its total non-brokered deposits by $1.05 billion, an excellent annual growth rate of 32.94%. Please refer to our financial overview of Ivy Bank/Cambridge Savings Bank (FDIC Certificate # 17870) for more details.
Depositors Insurance Fund (DIF)
Cambridge Savings Bank offers protection for large deposits through its Depositors Insurance Fund membership.
The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at Massachusetts-chartered savings banks. The DIF has been insuring deposits since 1934.
All DIF member banks are also members of the FDIC. Each depositor is insured by the FDIC to at least $250,000. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund (DIF).
There is no mention of DIF coverage on Ivy Bank’s website, which surprised me because it’s long been established that out-of-state customers of DIF banks get the DIF deposit coverage. In a Live Chat, I asked,
Q: Do Ivy Bank customers receive extra deposit coverage from DIF? DIF is mentioned at Cambridge Savings Bank’s website, but not on Ivy Bank's website.
A: Currently yes, but as the bank grows DIF insurance is not guaranteed. Since Cambridge Savings Bank and Ivy Bank are not separate entities for insurance purposes, and Cambridge Savings Bank is growing to a point of no longer having DIF insurance, we don't want it advertise insurance we can't guarantee to our customers.
I couldn’t find any detailed information about the level of growth that would force a bank out of DIF, although I did find a 2019 S&P Global article about Brookline Bank’s charter change that states,
The bank's growth in deposit size required it to withdraw from the DIF and the concurrent charter conversion.
Cambridge Savings Bank was established in 1834 and is one of the oldest and largest community banks in Massachusetts. With assets in excess of $5.2 billion, Cambridge Savings Bank is Massachusetts’ 11th largest bank and the 240th largest bank in the country.
How the CD Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are offered by online banks and require a similar minimum, Ivy Bank’s 5-year CD APY currently ranks third.
The above information and rates are accurate as of 8/14/2021.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.