KS StateBank CDs Are New Rate Leaders
For the first half of the year, KS StateBank significantly increased it CD rates (100+ bps), but by the end of May, those rates fell between 35-50 bps. Rates began to rise again in late September and following today’s increases of 98-124 bps, most of the KS StateBank CDs have become rate leaders.
The KS StateBank CDs illustrate how direct CD rates are beginning to catch up with brokered CD rates. For those who want to lock into a near-5% very-long-term CD, the KS StateBank 7-year CD is definitely an option. There hasn’t been a non-callable brokered 7-year CD offered in months.
The non-Jumbo CDs are also available as IRA CDs (Traditional, Roth), earning the same APYs and with the same funding requirements, but can only be opened in-branch.
The Jumbo CD Specials (earning the same APYs as the CDs) require a $100k minimum deposit and can only be opened online.
The “Notes” section for the Jumbo CD Specials on the Deposit Rates page states,
Must be opened online. Not available as an IRA.
Cannot be opened in the name of a trust. Consumer accounts only.
The Deposit Account Disclosure states that,
On CDs that are opened online, the only interest option
available is to have the interest credited to the CD quarterly.
The following is a summary of the Early Withdrawal Penalties, as stated in the Deposit Account Disclosure.
- 1-year CD – 6 months interest earned on the amount withdrawn
- 18-month CD – 6 months interest earned on the amount withdrawn
- 2-year CD – 9 months interest earned on the amount withdrawn
- 3-year CD – 12 months interest earned on the amount withdrawn
- 4-year CD – 15 months interest earned on the amount withdrawn
- 5-year CD – 18 months interest earned on the amount withdrawn
- 7-year CD – 18 months interest earned on the amount withdrawn
Funding and Other Particulars
- Funding – ACH, wire transfer, check; CD must be funded within ten business days of application approval; APY is not guaranteed until fully funded.
- Maturing Funds – ACH or certified check
- UPDATE 11/11/2022: Interest – compounded and credited quarterly; earned interest can be withdrawn without penalty ONLY IF OPENED IN-BRANCH*.
- Grace Period – 10 calendar days before automatic renewal.
- Beneficiaries – up to ten, equal shares, Social Security numbers required for all beneficiaries.
*For each individual CD term-length, the Deposit Account Disclosure reads,
Compounding and Crediting: […] If the account was opened in-branch you can deposit the interest into an account that you designate.[…]
It does not state that if a CD is opened online the earned interest must remain on deposit, but by tacit omission that appears to be the case. I received an email from a DA reader describing his experience applying for a 5-year CD. Just prior to funding the CD, he decided to double-check that credited interest could indeed be withdrawn. The 800# CSR informed him that an internet CD’s credited interest could not be withdrawn. When I have more first-hand information, I will update this blog post.
Availability
Headquartered in Manhattan, Kansas, KS StateBank began offering a portion of its product line on a nationwide basis more than six years ago. Currently, all U.S. residents, 18 years or older, “are welcome to apply for our Simple Savings, Advantage Money Market and Certificates of Deposit.”
As previously stated, the Internet Jumbo CD Specials are only available online and can only have individual or joint ownership. The non-Jumbo CDs can be opened online, or at any of six full-service Kansas branches located in Junction City, Manhattan (4), and Wichita. KS StateBank also has a branch in Phoenix, Arizona, obtained through its 2012 acquisition of Sonoran Bank.
Bank Overview
KS StateBank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.46% (excellent) based on June 30, 2022 data. KS StateBank excellent capitalization level (12.52%), the result of holding assets of $2.34 billion with $292.58 million in equity. Please refer to our financial overview of KS StateBank (FDIC Certificate # 19899) for more details.
Established in 1969 as Kansas State Bank of Manhattan, KS StateBank has grown to become the eighth largest bank headquartered in Kansas, with assets in excess of $2.3 billion and nearly 28,000 customer accounts. In 2012, the Bank acquired Sonoran Bank, N.A., located in Phoenix, Arizona. The KS StateBank re-brand occurred in January 2015, in an effort to better reflect the Bank’s increasing presence as an internet bank.
How the CDs Compare
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $10k or less, no banks or credit union have higher rates than currently offered on most of KS StateBank CDs. The following table compares the KS StateBank 1-year and 3-year CDs to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.
| APY | CD Term (Early Withdrawal Penalty) | Credit Union/Bank |
|---|---|---|
| 4.84% | 1-Year CD (EWP=180 days) | KS StateBank |
| 4.43% | 12-Month Senior Citizens CD (EWP=90 days) | State Bank of India (IL) |
| 4.35% | 12-Month CD (EWP=180 days) | CFG Bank |
| 4.15% | 12-Month Special Certificate (EWP=90 days) | Justice Federal Credit Union |
| 4.13% | 12-month Share Certificate (EWP=90 days) | GTE Financial |
| APY | CD Term (Early Withdrawal Penalty) | Credit Union/Bank |
|---|---|---|
| 4.99% | 3-Year CD (EWP=12 months) | KS State Bank |
| 4.50% | 36-Month CD (EWP=180 days) | Sallie Mae Bank |
| 4.50% | 36-Month Premium Certificate Special (EWP=180 days) | Signature Federal Credit Union |
| 4.43% | 36-Month Senior Citizens CD (EWP=180 days) | State Bank of India (IL) |
| 4.25% | 36-47 Month Share CD (EWP=180 days) | Alliant Credit Union |
The above information and rates are accurate as of 11/8/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
I really favor the 7 yr term - for others, that long out can be a deal breaker. YMMV. I'm still layering in a ladder, with more dry powder to spare for December and possibly January.
The CD app online was well designed - feeding them the ACH data to pull from is definitely the best way to go. It's very rare to see that in my experience. Pen Fed has that functionality, and who else?
My computer hung up in the middle of the app. I called the 800 number, and got put on hold for 15 minutes while waiting for the CD guy. He was apologetic for the wait and explained they're already swamped (of course). Looked me up in the system, which had assigned me a code that referenced my app. The app allows you to reenter the place where you stopped, even if you haven't clicked a button on the app to save and close. That's the way these things should be coded.
My credit got hit immediately, I assume it's a hard check but I'm not sure. That's not preferable, but also not a deal breaker for me. I would have preferred a monthly interest credit rather than quarterly, and a 12 month EWP rather than 18 month, but overall, again, I'm glad to see this rate on the longer term.
As for better opportunities, I certainly hope so. It's been my experience though that that particular ladder point, the 7 yr rung, is the hardest to fill. When a right bank comes along with the right rate for that spot, better to secure some now and add later if possible.
Looks like the election led to people snatching them up
"The “Notes” section for the Jumbo CD Specials on the Deposit Rates page states,
"Must be opened online. Not available as an IRA.
Cannot be opened in the name of a trust. Consumer accounts only."
Confused?
"The Texas Ratio for KS experienced no significant changes from 2.58% as of June 30, 2021 to 4.46% as of June 30, 2022, resulting in a negative change of 72.98%." Hence the trend. But this metric has to be understood in context. 4.46% is excellent. No worries on this score.
"Thank you for applying for an account with KS StateBank.
Your application has been approved and account(s) will be available upon receipt of ACH Payment within 3-5 days. If ACH funding cannot be completed due to failure of the transaction, KS StateBank reserves the right to close the account."
That's all so far.
I applied 11/8 and the funds were withdrawn today 11/14.
Bank to Bank Transfers
Incoming Transfer: Free Outgoing Transfer: $3.99/each
Like this costs them anything
We are not accepting online account applications at this time. Please be aware that it if you have submitted an application it may take three to five business days to process your new account.
Edit: KS was more than a little overwhelmed as they also closed/suspended the online account application