For a while this morning, Live Oak Bank had the distinction of having the top-rated 1-year CD (2.80% APY) offered by an internet bank. By the slimmest of margins (1 basis point), VirtualBank’s 12-month eCD claimed that honor late this morning.
The minimum opening deposit is $2.5k, with a maximum $250k deposit per CD. The maximum aggregate balance (all consumer accounts at Live Oak Bank) is $5 million. There is also a limit of 25 consumer accounts per individual.
Funding a Live Oak Bank CD must be done through an ACH transfer from an existing checking or savings account at the bank named in the online application. Up to five beneficiaries may be added, but all beneficiaries must be U.S. citizens. Maturing funds can be distributed through an ACH transfer, a wire transfer, or by certified check. There is a 10 calendar day grace period before automatic renewal.
As stated in Live Oak Bank’s Consumer Terms and Conditions document, the Early Withdrawal Penalty (EWP) reads as follows:
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impose will equal 90 days interest on the amount withdrawn subject to penalty.
There have been several rate changes for the shorter-term CDs since July, with the yield curve becoming more compressed. The difference between the 1-year and 5-year CDs has shrunk from 70 bps in July to 35 bps as of today.
Headquartered in Wilmington, North Carolina, Live Oak Bank is a true internet bank, having no brick-and-mortar branches. The Bank offers its product line to U.S. citizens or permanent residents who have a valid Social Security number.
New Live Oak Bank customers can begin the application process on the Get Started page. Clicking on the “Open Your CD Today” button takes you to a simple form that requests your name and email address. As explained on that page, “To begin the account creation process, please complete the information below.” According to CSR, this is the first step in the online application process.
Live Oak Bank’s online application is fairly straightforward, but CSR did warn me that there is no "back button" – meaning 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 help in avoiding an online application time-out for inactivity.
Live Oak Bank has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 0.85% (excellent), based on June 30, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $1.14 billion, excellent annual growth rate of 92.13%. Please refer to our financial overview of Live Oak Bank (FDIC Certificate # 58665) for more details.
A fast growing institution, Live Oak Bank currently has $3.4 billion in assets and more than 37,800 customer accounts. 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.
In addition to having recently marked its 10th anniversary, Live Oak Bank has another reason to celebrate. According to press release issued in May,
Live Oak Bank announced today it has officially launched a new lending division focused on financing for the franchise restaurant industry. The vertical marks Live Oak’s 18th industry specific lending division and will include all franchise businesses from quick service and fast-casual to full-service dining.
“The franchise restaurant industry is one of the fastest growing in the U.S. and our team has the extensive knowledge owners need to grow their business,” said Jason Lumpkin, general manager of emerging markets at Live Oak Bank. “Live Oak is dedicated to helping customers meet their goals and provide ongoing recommendations along the way.”
How the 1-Year CD Compares
When compared to 218 similar length-of-term CDs tracked by DepositAccounts.com that require a minimum deposit of $10k or less and are available nationally, Live Oak Bank’s 1-Year CD APY currently ranks third.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|3.00% APY||12-Month CD||Greenwood Credit Union|
|2.81% APY||12-Month eCD||Virtual Bank|
|2.80% APY||1-Year CD||Live Oak Bank|
The above rates are accurate as of 11/16/2018.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.