Live Oak Bank Substantially Boosts Rates On All CDs

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Deal Summary: Most noteworthy CD rate increases – 6-month (1.25% APY), 18-month (2.00% APY), 5-year (2.75% APY), $2.5k min/$250k max deposit

Availability: Nationwide (internet bank)

Three weeks ago, North Carolina-based Live Oak Bank (Live Oak) had substantial across-the-board CD rate increases, making its shorter-term CDs near-rate leaders or rate leaders. Following yesterday’s rate increases of 50-75 bps, Live Oak has again secured a position at the head of the rates peloton. Of the seven CDs in the product line, the 6-month (1.25% APY), 18-month (2.00% APY), and 5-year (2.75% APY) offer the most competitive rates. Any Live Oak CD can be opened with a minimum $2.5k deposit and is capped at $250k.

IRA CDs are not offered, but Live Oak does offer Business CDs that have the same rates and funding requirements as the CDs for personal accounts. The details of the current rates and the rate histories can be seen in the following table.

APYMINMAXINSTITUTIONPRODUCTDETAILS
3.25%$2.5k$250kLive Oak Bank2 Year CD
3.15%$2.5k$250kLive Oak Bank18 Month CD
3.00%$2.5k$250kLive Oak Bank1 Year CD
2.50%$2.5k$250kLive Oak Bank6 Month CD
2.00%$2.5k$250kLive Oak Bank3 Year CD
2.00%$2.5k$250kLive Oak Bank5 Year CD
2.00%$2.5k$250kLive Oak Bank4 Year CD
Rates as of September 24, 2022.

Early Withdrawal Penalties

As stated in the Truth-in-Savings disclosure:

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 Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty.

There is no mention of having to obtain the bank’s consent to withdraw some or all the principal before maturity.

The Truth-in-Savings disclosure also includes the Early Withdrawal Penalty (EWP).

If your account has an original maturity of less than 24 months: The fee we may impose will equal 90 days interest on the amount withdrawn subject to penalty.

If your account has an original maturity of 24 months or more: the fee we may impose will equal 180 days interest on the amount withdrawn subject to penalty.

The effective yields shown in this populated DA Early Withdrawal Penalty Calculator illustrate that CDs with mild EWPs aren’t terrible products in a fast rising-rate environment. For example, an 18-month CD closed after 6 months will have an effective yield if 1.00%, which will likely compare well to many of the current online savings accounts rates.

While a description of an EWP can often be found on a bank’s website, the actual process is rarely detailed. According to CSR, the first step is to call a Live Oak Customer Success Manager (866.518.0286) to request a withdrawal or closure. An email confirming your request will be sent to the email you provided when opening the CD.

The funds being withdrawn can be transferred to an external financial institution by ACH or wire transfer (1-2 business days, typically) or immediately transferred to a Live Oak High Yield Online Savings (HYOS) account.

High Yield Online Savings

APYMINMAXINSTITUTIONPRODUCTDETAILS
2.00%-$5mLive Oak BankHigh Yield Online Savings
Rates as of September 24, 2022.

Currently earning 0.60% APY on all balances up to $5 million, the HYOS rate has remained unchanged for the last two months. The HYOS rate is an example of how online banks are promoting CDs rather than their savings accounts. This has also resulted in the Live Oak 6-month CD being in an unusual position of having an APY that’s more than twice the HYOS APY. Very few online banks with competitive savings accounts have offered 6-month CDs as competitive as the Live Oak 6-month CD.

FAQs

The FAQs answers a variety of questions including, “Can I add a beneficiary?”

Yes, you may add beneficiaries to your account. To qualify as an eligible beneficiary, the beneficiary must be a living person, a charity, a trust, or a non-profit organization. If the beneficiary is a person, the individual must be a US citizen. If a charity or non-profit is named as a beneficiary, it must qualify as such under the Internal Revenue Service (IRS) regulations.

Funding and Maturing Funds

Funding a CD from an external source can only be done by ACH, with the CD rate not locked until funds have been received by Live Oak Bank. Having funding in place before beginning the application process provides the best chance to lock in the current APY.

Like an early withdrawal or early closure, maturing funds can be distributed through an ACH or wire transfer, or transferred to an HYOS; Live Oak does not issue checks. There is a 10-day grace period before a CD automatically renews.

Availability

Headquartered in Wilmington, North Carolina, Live Oak Bank is a pure internet bank, having no brick-and-mortar branches. U.S. citizens and permanent residents who have a valid Social Security number are eligible to open a CD and/or an Online Savings account.

Live Oak Bank has done away with its “Get Started” page, which was previously the first step toward initiating the “quick three-step application.” The online application can be accessed from the Personal Banking page of Live Oak Bank’s website. (Make sure you select the correct CD term-length on the Personal Banking page before clicking on “Open Now,” as the online application is customized based on the term-length chosen.)

Bank Overview

Live Oak Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 1.47% (excellent), based on December 31, 2021 data. In the past year, the Live Oak Bank has increased its total non-brokered deposits by $1.17 billion, an excellent annual growth rate of 25.76%. Please refer to our financial overview of Live Oak Bank (FDIC Certificate # 58665) for more details.

Opening its doors in 2008, Live Oak Bank is currently the fifth largest bank headquartered in North Carolina and the 170th largest bank in the country, with more than $8.1 billion in assets and nearly 70,000 customer accounts. As stated on the Bank’s About Us page,

Live Oak is a digital, cloud-based bank serving small business owners in all 50 states. We are the leading USDA B&I lender and the #1 SBA 7(a) lender by dollar volume* in the country and our mission is to be America’s small business bank.

*The data supplied by the SBA reflects 7(a) highest dollar volume during FY 2021. The data supplied by the USDA for the highest dollar volume during FY 2021.

How the 6-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationally and have minimum deposit requirements of $10k and under, only one credit union has a higher rate than currently offered on the Live Oak Bank 6-month CD. The following table compares the 6-Month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

How the 18-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationally and have minimum deposit requirements of $10k and under, no banks or credit unions have higher rates than currently offered on the Live Oak Bank 18-month CD. The following table compares the 18-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

How the 5-Year CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationally and have minimum deposit requirements of $10k and under, no banks or credit unions have higher rates than currently offered on the Live Oak Bank 5-year CD. The following table compares the 5-year CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

The above information and rates are accurate as of 5/6/2022.

Searching for the best CD rates, both nationwide and in your state? Please refer to CD Rates Table page.

Related Pages: savings accounts, 1-year CD rates, 5-year CD rates, nationwide deals, Internet banks

Comments


Saver2
  |     |   Comment #2
Live Oak Bank update: effective May 11, 2022, savings accounts will earn 0.80% Annual Percentage Yield (APY).
gpagpa01
  |     |   Comment #3
FOLLOWUP: My 90 days was over on May 30th and just called live oak for a different matter and inquired about satisfying requirements. I was confident and just wanted verbal verification since I was going to move $$ to Marcus. Surprisigly, rep mentioned that I needed to open a NEW account to qualify. Clearly, I had copy of Mar 1st email to promotion and references existing customers keeping a balance of $25K higher than 2-28-22 balance. There is even record of recorded call I made to LO on Mar 1st to verify. Their response was we need someone to verify that i followed the T&C. Also, if I had not called, then the promotion would not have been paid, they are waiting for customers to call to verify instead of following the T&C stated in the Mar 1st email. If you had a previous LO account, you need to call and inquire (only time to call the bank, when you have met the requirements)
gpagpa01
  |     |   Comment #4
finally got them to “make a special exception” for me even though I followed the emailed requirements. They are claiming that I needed to open a new account. Good thing I had called and they heard me asking if I needed to open a new account and the rep confidently said no need just keep balance above 2-28-22. If you had a previous account, you NEED to call to get them to make exception, you will not get promotion without.
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