5.25% 29-Month CD with Key Advantage Checking at KeyDirect


KeyDirect has ended its 4.75% APY 23-month CD, but they have come out with a new 29-month CD with a yield of 5.00% APY. As I first mentioned in this August post, you can receive an extra 25 basis points on the CD rates if you have or open a Key Advantage Checking Account. So with this checking, the 29-month CD yield is 5.25% APY.

The minimum deposit for the CD is $5,000, but to avoid a $15 monthly fee on the Key Advantage Checking, a combined balance of $10,000 is required. The combined balance includes checking, savings and CD balances. A few other ways to avoid a monthly fee are described in the disclosure.

For more details about opening and closing a KeyDirect CD, please refer to my August post. One thing to note about this 29-month term is that the early withdrawal penalty is equal to 9 months of interest which is higher than the 6-month penalty for the 23-month term.

Accounts at KeyDirect may be opened by people who live in 37 states and in DC which don't have KeyBank branches (see bottom of their CD overview page). In the other states, you have to open CDs through Key Bank (which may have lower rates).

KeyBank is based in Cleveland, Ohio and has been FDIC insured since 1956 (FDIC Certificate # 17534).

Key Corp, the parent of Key Bank, has been hurt in this credit crisis, and this is starting to be reflected in Key Bank's financial ratings based on 6/30/08 data. Bankrate.com gives the bank a 2-star rating (below peer group) and BauerFinancial gives it a 3.5-star rating (good).

Thanks to the reader who mentioned this new CD in the comments.
Anonymous   |     |   Comment #1
Be careful opening an account here. Multiple mistakes were made opening mine a couple of months ago and the customer service is very poor.
It took forever and ever to get them to put the correct rate on the CD's (with 1/4 percent higher due to opening the Key Advantage Account). If I hadn't phoned them numerous times to 'remind them' they probably would never have even done it. Their snail mail is slower than molasses; to this day I am still waiting for a corrected CD statement on one of my accounts.
Anonymous   |     |   Comment #2
Got 23 month done last week at the 5% APY. Feel like I did OK. Not certain I would be as comfortable with another 6 months tacked on. Heck, 23 months is a long time in this financial environment. Also agree with Banking Guy on seeking lower penalty whenever possible. So the 29 carries sort of a double whammy when compared with the old 23.
mcrmgf (anonymous)   |     |   Comment #3
terrible rates at ny branch
Anonymous   |     |   Comment #4
I had a bad experience before with KeyDirect, even though I wanted to open a CD with them because, at the time, they had a very attractive rate...

Talked to them on the phone at length...got all the info...and found out they would not accept funding of the account via ACH transfer...especially if you didn't already have a checking or savings with them.

So, they insisted that I paper mail the check to them.... But they wouldn't lock the rate until they actually received the check. And by the time we sorted everything out, on the day I was going to mail the check much to my dismay, they substantially cut their rates. So I bailed out.

I don't know the reason why they can't have a system in place to fund new CDs thru ACH transfer from one of your other bank accounts. It's a very common practice among other institutions...and much quicker than snail mailing.
Anonymous   |     |   Comment #5
I agree with the first poster, I've had exactly the same experience.

I got updated paperwork today for a CD I opened 6 weeks ago. It says my interest rate is 48.000% ... unfortunately, the APY is correct at 5.01%. They obviously have some serious administrative challenges.

Today I think I finally got a CSR who actually was competent. I've gotten lots of just plain wrong information from their CSR's.
5.00% 23-Month CD with New Key Advantage Checking at KeyDirect
Update 10/13/08: The yield on the 23-month CD has gone down. Please refer to this post for a new special CD.

KeyDirect is still offering a 4.75% APY 23-month CD. They've just came out with a new checking account, Key Advantage Checking, and one of the perks of this account is an extra 25 basis points on the rates of any of its CDs. So with this rate bump, you can get some very competitive rates: 5.00% APY 23-month, 5.50% APY 48-month and a 5.75% APY 10-year.

The minimum deposit for the...

Continue Reading
KeyDirect Raises Money Market Account Yield to 5.35%
Update 1/1/08: The rate has fallen. The current yield is 4.75% APY.

KeyDirect has increased the yield on its Key Signature Money Market Savings from 5.25% to 5.35% APY. The yield is good on all balances up to $250K. A $50 minimum initial deposit is required to open the account.

For more info on this money market account please refer to my August 9th post. As I mentioned in that post, KeyDirect has made this into a very competitive money market account by getting rid of the rate tiers. Another nice perk...

Continue Reading
KeyDirect's 5.25% Money Market Account - Now with a Low Minimum
Update: The current yield as of 8/7/08 is 3.00% APY

KeyDirect has long had competitive rates on its money market accounts, however, it has required a minimum opening deposit of $25K. This was changed in May. The Key Signature Money Market Savings' minimum opening deposit is now only $50. The current yield is 5.25% APY on all balances up to $250K.

They website doesn't have too many details, so I called their toll-free number. I was able to get through to the customer service representative (CSR) quickly, and she was polite and...

Continue Reading
5.55% to 5.90% on 5 to 10 Year CDs at KeyDirect
Update 1/22/08: The CD rates have changed. Please check the bank's website for the latest rates.

KeyDirect has some very competitive rates for long term regular and IRA CDs. The APY for 5, 7 and 10 year term are 5.55%, 5.75% and 5.85%. These require a minimum deposit of $5,000 ($2,000 for IRAs). An extra 0.05% is available for a minimum deposit of $50K for the 7 and 10 year terms. These rates apply to both regular and IRA CDs.

The early withdrawal penalty for CDs with terms of 48 months or...

Continue Reading
Opened a KeyDirect Money Market Account Last Year? Beware!
A reader just informed me of a questionable marketing tactic that has been done at KeyDirect. In January, KeyDirect created a new money market account called the Optimum Money Market Savings with a high interest rate. The existing money market account called the Premier Money Market Account was retained and the interest rate was quietly reduced. I was told by the reader that the rate is well below 4%.

Customers are allowed to switch to this new Optimum account but they need to make a specific request. The change can be...

Continue Reading