Live Oak Bank Increases Rates On Three CDs

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Deal Summary: CDs – 1-year (0.75% APY), 18-month (0.75% APY), 2-year (0.75% APY), $2.5k min/$250k max deposit per account.

Availability: Nationwide (internet bank)

It’s been almost a year since my last blog post about CDs offered by North Carolina-based Live Oak Bank. As of this week, Live Oak Bank’s 1-year, 18-month, 2-year CDs all earn 0.75% APY, following rate increases of 15, 10, and 5 bps, respectively. These rates are currently the highest offered by any internet bank on these specific term-lengths. Any Live Oak Bank CD can be opened with minimum $2.5k deposit, and each account is capped at $250k.

APYMINMAXINSTITUTIONPRODUCTDETAILS
0.65%$2.5k$250kLive Oak Bank1 Year CD
0.65%$2.5k$250kLive Oak Bank18 Month CD
0.65%$2.5k$250kLive Oak Bank2 Year CD
Rates as of December 8, 2021.

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 Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty.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 obtaining the bank’s consent to withdraw some or all the principal before maturity.

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

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has an original maturity of less than 24 months: The fee we may impose will equal 90 days interest on the amount withdrawn subject to penalty.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account has an original maturity of 24 months or more: the fee we may impose will equal 180 days interest on the amount withdrawn subject to penalty.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 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 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 your funding in place before beginning the application process affords you the best chance to lock in the current APY.

Maturing funds can be distributed through ACH or by check to the address on file. 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 directly from the Personal Banking page. (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 "B+" at DepositAccounts.com, with a Texas Ratio of 2.79% (excellent), based on June 30, 2021 data. In the past year, the Bank has increased its total non-brokered deposits by $1.15 billion, an excellent annual growth rate of 27.16%. Please refer to our financial overview of Live Oak Bank (FDIC Certificate # 58665) for more details.

Live Oak Bank's overall health grade has been hurt by a low Capitalization grade. Live Oak Bank has participated in the Paycheck Payment Program (PPP) and has used the PPP Liquidity Facility. This has caused a large increase in assets without an increase in equity capital or loan loss provisions, resulting in a low Capitalization grade. Since the Fed backs the PPP loans, the low Capitalization grade should be considered temporary without adding solvency risk.

Founded in 2008, Live Oak Bank is currently the forth largest bank headquartered in North Carolina and the 183rd largest bank in the country, with more than $8.1 billion in assets and nearly 90,000 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 SBA and USDA 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 2020. The data supplied by the USDA for the highest dollar volume during FY 2020.

How the CD Compares

When compared to the nationally similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are offered by internet banks, Live Oak Bank’s 1-year, 18-month, and 2-year CD APYs currently rank first.

The above information and rates are accurate as of 9/3/2021.

To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.

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

Comments
enelrad1123
  |     |   Comment #1
Ken states: "Maturing funds can be distributed through ACH or by check to the address on file." I had a CD mature on Sept 26, 2021 and was told by more than one CSR that they did not have the capability to send a check and that my funds must be distributed via ACH. I thought it was very bizarre that a bank couldn't cut a check but didn't care to escalate the issue to a supervisor. Since I was told I had no other option to receive my money, I had to establish a new external account link as I had closed the bank account from which the funds originated. When I linked another bank which was a joint account with my husband (as was the Live Oak CD) that caused a further complication. The CSR requested I forward a copy of my latest bank statement before they would approve the link. Perhaps Live Oak enacted a new policy after September 26th or perhaps I was misinformed by multiple agents, but I wanted to let my fellow DA readers aware of my cumbersome experience.
111
  |     |   Comment #2
This issue has come up often in this forum, with a number of banks. The solution is to establish a no-fee savings or checking account at that bank to receive the funds, ideally before CD maturation. Specifically, Live Oak has a “High Yield Online Savings” account with no minimum balance and no fees. You simply have your CD balance dumped to the savings account upon maturation That way, you're not limited by any inadequacies of Live Oak's ACH-push provisions. You have the additional option of AHC-pulling the funds from your other bank or CU (with better ACH provisions), which you have ideally previously selected and linked with your Live Oak savings account.
deskandchairs
  |     |   Comment #3
Don't forget, you must consent to receiving authentication by text if you wish to use Live Oak online banking, which of course is essential when dealing with an online bank
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Availability: Nationwide (internet bank)

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

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Availability: Nationwide (internet bank)

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Availability: Nationwide (internet bank)

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Availability: Nationwide (internet bank)

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Availability: Nationwide (internet bank)

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