In the first half of 2015, I wrote four different blog posts about Live Oak Bank’s series of CD Specials, which typically were available for a short time and required a $75k minimum deposit.
There was quite a bit of activity during those six months, with Live Oak Bank featuring three different length-of-term CDs, one after another with very competitive rates. By early July 2015 however, the rates had dropped or the Specials were no longer available. Live Oak Bank began to offer competitive CD rates in early 2016, and also changed how the CDs were structured:
- There are multiple CDs with competitive rates being offered simultaneously.
- The minimum deposit is only $2.5k.
- There is no limit as to how many CDs each household can open.
- There are no stated end-dates for the rates.
- There is no add-on feature
Live Oak Bank raised the rates on its 1-year CD (1.35% APY) and 18-month CD (1.40% APY) yesterday, the first increases in over a year. As mentioned above, the minimum deposit is $2.5k.
|1.45%||$2,500||$250k||Live Oak Bank||18 Month CD|
|1.40%||$2,500||$250k||Live Oak Bank||1 Year CD|
As stated on Live Oak Bank’s FAQs page, the Early Withdrawal Penalty reads as follows.
The early withdrawal penalty is the equivalent of 90 days of interest on the amount withdrawn for CD terms less than 2 years or 180 days of interest on the amount withdrawn for CD terms of 24 months or longer.
I wrote in greater detail about the funding process for Live Oak Bank’s CDs in February 2015, but the bottom line is that the initial funding must be done through an ACH transfer.
During the enrollment process, you will be asked to provide your existing checking or savings account information to transfer your funds via ACH. Accounts may only be funded from a checking or savings account.
Headquartered in Wilmington, North Carolina, Live Oak Bank is an internet bank that has no brick-and-mortar branches other than its Headquarters located on Tiburon Drive. At this time, Live Oak Bank's only deposit accounts are CDs, which must be opened online.
CSR confirmed that there is no "back button" on the online application, so extra care needs to be taken when filling out the application. CSR also pointed out that having a copy of your Driver’s License or other government issued ID uploaded on your computer will insure speedy completion of your online application.
Live Oak Bank’s website has a very detailed FAQs page that can answer many questions about the CDs. If you need more clarification, you can reach a Deposit Services Representative at 866.518.0286.
Live Oak Bank (FDIC Certificate # 58665) has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 1.47% (excellent), based on September 30, 2016 data. In the past year, Live Oak Bank has increased its total non-brokered deposits by $439.65 million, excellent annual growth rate of 753.17%. Please refer to our financial overview of Live Oak Bank for more details.
A young but quickly growing institution, Live Oak Bank was founded in 2008 and currently has $1.6 billion in assets. Live Oak Bank describes itself this way:
Since 2008, Live Oak Bank has been achieving its primary goal: financing small business growth nationwide. Today, Live Oak Bank is one of the top originators of small business loans, with one of the strongest loan portfolios in the country. Since we lend exclusively to small businesses, our focused lending experience is second to none.
Chip Mahan, CEO and key founder of Live Oak, was named by FutureBanker magazine as one of the "10 Most Influential People in Financial Services," and was also recently featured as an "industry innovator" in American Banker.
How the CDs Compare
When compared to the 203 similar length of term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are available nationally, Live Oak Bank’s 1-Year CD APY currently ranks fourth, but when compared to internet banks only, the APY ranks second.
When compared to the 142 similar length of term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are available nationally, Live Oak Bank’s 1-Year CD APY currently ranks fifth, but when compared to internet banks only, the APY tops the list.
The above rates are accurate as of 1/25/2017.