5.00% 23-Month CD with New Key Advantage Checking at KeyDirect
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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 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 is described in the disclosure.
If it were not for the CD rate bump, the Free Checking Account would be a better choice for most people. Both checking accounts have decent interest rates, but if you need to a lot of liquid money, you should consider Key's Money Market Account (see post) or other higher yield savings accounts.
Opening And Closing the CD
The 25 basis-point rate bump doesn't seem to be listed on the website. A reader commented on this, and I called for details. If you don't already have the Key Advantage Checking, the CSR recommended that you open the CD by phone rather than online. By applying by phone, the CSR can ensure that the CD application notes that you are also applying for the checking account and will ensure you receive the rate bump. Past commenters have also recommended applying by phone since their online application doesn't eliminate the need to fill out paperwork.
The CSR said it'll take 7 to 10 business days for you to receive the welcome package. You'll then have to mail back some forms along with your check. They do have the "postmark" rule for deposits in that you'll receive the CD rate in effect at the time of the postmark of your check. However, if rates go up, I was told they'll give you the higher rate.
You can also fund a CD with a wire transfer. However, a reader was told last year that if you're funding a trustee-to-trustee transfer of an IRA, their New York IRA center will not accept an incoming wire transfer.
When the CD matures, I was told you can call to instruct them to close the CD. If you have the checking or money market account, you can instruct them to transfer the CD funds into one of these accounts. You can also have them mail you a check or perform a wire transfer ($25 fee for outbound wire transfers).
CD Disclosure
The CD disclosure is avaialable at the bottom of their Certificate of Deposit page. According to this disclosure, the 23-month CD has an early withdrawal penalty of 6 months of interest. The penalty jumps up to 9 months of interest for terms of 24 to 47 months and 12 months of interest for terms of 48 months or more.
Eligibility for KeyDirect
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).
KeyDirect Overview
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 by the real estate slump. It reported a large second quarter loss. This news article has the details. This latest news is probably not reflected in Key Bank's financial ratings which are primarily based on 3/31/08 data. Bankrate.com gives the bank a 4-star rating (sound) and BauerFinancial gives it a 3.5-star rating (good).
Thanks to the reader who mentioned this new checking account in the finding the best deals post.
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 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 is described in the disclosure.
If it were not for the CD rate bump, the Free Checking Account would be a better choice for most people. Both checking accounts have decent interest rates, but if you need to a lot of liquid money, you should consider Key's Money Market Account (see post) or other higher yield savings accounts.
Opening And Closing the CD
The 25 basis-point rate bump doesn't seem to be listed on the website. A reader commented on this, and I called for details. If you don't already have the Key Advantage Checking, the CSR recommended that you open the CD by phone rather than online. By applying by phone, the CSR can ensure that the CD application notes that you are also applying for the checking account and will ensure you receive the rate bump. Past commenters have also recommended applying by phone since their online application doesn't eliminate the need to fill out paperwork.
The CSR said it'll take 7 to 10 business days for you to receive the welcome package. You'll then have to mail back some forms along with your check. They do have the "postmark" rule for deposits in that you'll receive the CD rate in effect at the time of the postmark of your check. However, if rates go up, I was told they'll give you the higher rate.
You can also fund a CD with a wire transfer. However, a reader was told last year that if you're funding a trustee-to-trustee transfer of an IRA, their New York IRA center will not accept an incoming wire transfer.
When the CD matures, I was told you can call to instruct them to close the CD. If you have the checking or money market account, you can instruct them to transfer the CD funds into one of these accounts. You can also have them mail you a check or perform a wire transfer ($25 fee for outbound wire transfers).
CD Disclosure
The CD disclosure is avaialable at the bottom of their Certificate of Deposit page. According to this disclosure, the 23-month CD has an early withdrawal penalty of 6 months of interest. The penalty jumps up to 9 months of interest for terms of 24 to 47 months and 12 months of interest for terms of 48 months or more.
Eligibility for KeyDirect
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).
KeyDirect Overview
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 by the real estate slump. It reported a large second quarter loss. This news article has the details. This latest news is probably not reflected in Key Bank's financial ratings which are primarily based on 3/31/08 data. Bankrate.com gives the bank a 4-star rating (sound) and BauerFinancial gives it a 3.5-star rating (good).
Thanks to the reader who mentioned this new checking account in the finding the best deals post.
