With APYs of 1.90%, Live Oak Bank’s 1-year and 18-month CDs are currently rate leaders in their respective term-length categories. The minimum opening deposit for either CD is $2.5k, with a $250k balance cap.
|0.80%||$2.5k||$250k||Live Oak Bank||1 Year CD|
|0.60%||$2.5k||$250k||Live Oak Bank||18 Month CD|
In the past year, both the 1-year and 18-month CD APYs lost 90 bps in a series of seven rate drops. While the 1.90% APYs are competitive, I have a feeling that they may not last much longer, given the current falling rate climate. Unfortunately, Live Oak doesn’t lock in a CD rate until the funds have been received by the bank. Having your funding in place before beginning the application process affords you the best chance to lock in the current APY.
As stated on the Certificate of Deposit page, the Early Withdrawal Penalty read as follows:
90 Days of Simple Interest on a CD with a term of less than 24 months.
The FAQs answers the question, “What is involved in the process to open a CD?”
The Certificate of Deposit can only be opened online. You may click ‘Get Started’ on the homepage and follow the prompts to begin the quick three-step application. We will ask for your personal information and external bank account information. Your information will be verified electronically. We may request documentation if additional verification is required. Once this information is confirmed, you will enter the amount of your deposit to schedule an ACH transfer from the verified bank account into your new CD account.
You may add a co-owner or beneficiary to the account after completing the funding step of the application.
I last wrote about Live Oak more than a year ago. At that time, I included a chart that illustrated the compression of the 1-year and 5-year CDs yield curve from July 2018 to February 2019. To quote myself, “The difference between Live Oak Bank's 1-year and 5-year CDs has dwindled from 70 bps in July to 25 bps as of today.”
The following chart shows what’s happened to the 1-year and 5-year CDs in the first 15 weeks of 2020. For most of the year, the CD yield curve has been slightly negative with the 5-year CD rates slightly lower than the 1-year rates. Now, it's very negative with the 1-year rate 40 bps higher than the 5-year rate.
Savings Account FAQs
Live Oak Bank’s High Yield Online Savings currently earns 1.75% APY on balances up to $5 million. While the High Yield Online Savings has experienced four rates drops in the last seven months, the APY has actually fared better than most nationally available savings accounts APYs.
According to the Savings Account FAQs page,
You can move up to $250,000 per transfer. This applies to both internal and external transfers.
incoming transfers initiated through the Live Oak Bank Portal are held for five business days once posted to your Live Oak account.
Funds sent to an external account are available at that bank within 1-2 business days. The transfer must be initiated before 4:00 p.m. ET.
Headquartered in Wilmington, North Carolina, Live Oak Bank is a pure internet bank, having no brick-and-mortar branches. U.S. citizens/permanent residents who have a valid Social Security number are eligible to open a CD and/or a High Yield Online Savings account.
The “Open Your CD Today” page has a simple form that requests your name and email address. As explained on that page, “To begin the account opening process, please complete the information below.” According to CSR, this is the first step toward initiating the online application process.
Live Oak Bank’s online application is fairly straightforward, but CSR emphasized that there is no "back button" – meaning extra care needs to be taken when filling out the application. CSR also stated 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 has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 1.71% (excellent), based on December 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $767.23 million, excellent annual growth rate of 31.27%. Please refer to our financial overview of Live Oak Bank (FDIC Certificate # 58665) for more details.
Founded in 2008, Live Oak Bank is currently the fifth largest bank headquartered in North Carolina and the 228th largest bank in the country, with more than $4.7 billion in assets. The Bank specializes in small business loans in niche industries, such as self-storage companies, veterinary medicine, funeral homes, as well as more traditional industries like government contracting and hotels.
According to a March 2020 WilmingtonBiz article,
Live Oak Bank’s plans for 2020 include introducing new deposit products, keeping small business lending stable and enhancing its technology. That’s according to remarks made by Huntley Garriott, the bank’s president, about Live Oak’s core activities during the bank’s earnings call in January.
Garriott said Live Oak will roll out a new website, mobile onboarding servicing and more CD products in the first half of 2020. He anticipates introduction of Live Oak’s checking account offering in the second half of the year.
How the CDs Compare
When compared to 173 similar length-of-term CDs tracked by DepositAccounts.com that require a minimum deposit of $5k or less and are available nationally, Live Oak Bank’s 1-year CD APY currently ranks first*.
When compared to 116 similar length-of-term CDs tracked by DepositAccounts.com that require a minimum deposit of $5k or less and are available nationally, Live Oak Bank’s 18-month CD APY currently ranks first.*
The above rates are accurate as of 4/10/2020.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.
We are continuing to keep our rates up-to-date, but are just too many rate cuts for us to process the changes quickly. For the time being, please be aware that the rates listed at DepositAccounts may not reflect the latest rates published by the banks and credit unions.