As rates are rising, financial institutions that were previously on competitive rates hiatus are returning with some noteworthy rates. Virginia-based MainStreet Bank (MSB) is one of those banks. With substantial across-the-board rate increases of 55-95 bps, MSB now offers a variety of competitive CDs, with the 2-year CD (1.25% APY) and 1-year No Penalty CD (0.70% APY) offering the best rates. Any MSB CD can be opened with a minimum deposit of $500, with no stated balance cap.
|1.40%||$500||-||MainStreet Bank||5 Year CD|
|1.35%||$500||-||MainStreet Bank||4 Year CD|
|1.30%||$500||-||MainStreet Bank||3 Year CD|
|1.25%||$500||-||MainStreet Bank||2 Year CD|
|0.75%||$500||-||MainStreet Bank||1 Year CD|
As stated in the Personal Fee Schedule, the Early Withdrawal Penalty (EWP) for the CDs with terms of 2 years or more is a loss of 180 days dividends, with the 1-year CD losing 90 days dividends.
The 6-month EWP for the 5-year CD is fairly mild, particularly when compared to the EWPs for the other competitive nationally available 5-year CDs. For those who are wary of committing to a long-term CD because of the possibility of higher rates in the near future, a mild EWP can be a useful tool. Using DA’s Early Withdrawal Penalty Calculator, you can see what the effective yields would be on a month-by-month basis, proving that closing an MSB 5-year CD wouldn’t be a financial disaster. For example,
- 1.23% APY – closed at 4 years
- 1.17% APY – closed at 3 years
- 1.05% APY – closed at 2 years
- 0.94% APY – closed at 18 months
No Penalty CD
Following a 55 bps increase, the 1-year No Penalty CD currently earns 0.70% APY. The minimum opening deposit is $500.
There is no detailed description of the No Penalty CD on the MSB website. All the following information is from a conversation with a very knowledgeable and helpful CSR.
- The 1-year No Penalty CD is structured similarly to the standard no-penalty CDs offered by Ally and Marcus by Goldman Sachs: only a complete withdrawal/early closure is allowed after seven days of funding. An early closure will include all accrued interest, just not the credited interest.
- A request for an early withdrawal can be done by phone or by secured email.
- Funding a No Penalty CD (or any CD) is a bit wonky. First of all, funding isn’t part of the online application process. After the online application has been submitted and approved, MSB will contact you to determine how you want to fund the new CD. ACH funding is possible, but only if you already have a checking or savings account with MSB. CSR stated that a wire is MSB’s preferred method of funding.
- Accessing funds can be done by through a wire ($20 fee) or by cashier’s check to the address on file. An immediate transfer to an MSB liquid account is also possible and probably the easiest way to get quick access to your funds.
- The time it will take to close a No Penalty CD is dependent on how you receive the funds: an internal transfer with be almost immediate. A cashier’s check will be issued within two business days. A wire will be sent within one business day and an ACH can be done within 2 business days if you have a MSB checking/savings account.
Probably the best strategy for the No-Penalty CD is to have a checking/savings account at MSB, so you can quickly get the funds into a liquid account. Unfortunately, the checking and savings accounts (including the Kasasa Cash and Saver accounts) have rather dismal rates.
Headquartered in Fairfax, Virginia, MainStreet Bank offers its services and product line on a nationwide basis through an online application.
U.S. citizens and resident aliens, 18 years or older, with a valid Social Security number are welcome to apply.
MainStreet Bank, has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 0.53% (excellent), based on September 30, 2021 data. MainStreet Bank has an excellent capitalization level (13.14%), the result of holding $1.66 billion in assets with $217.62 million in equity. Please refer to our financial overview of MainStreet Bank (FDIC Certificate # 57742) for more details.
MainStreet Bank is a fairly young institution, having been established in 2004. The Bank continued to grow during the Financial Crisis and is currently Virginia’s 21st largest bank, with assets in excess of $1.6 billion and nearly 9,000 customer accounts. MSB identifies as a community bank, “funneling our resources back into Northern Virginia and surrounding communities.” According to the Community Bank page, MSB recent involvement in the community includes,
- Collecting and donating food towards hunger relief
- Donating and wrapping holiday gifts for children in under-served communities and low-income families
- Educating parents and children on financial matters at local schools
- Fundraising for scholarships for families of fallen officers and police equipment
- Providing animal-assisted therapy to children
- Providing elementary school students with dictionaries
- Raising money for Jill’s House — a nonprofit providing overnight care to children with intellectual disabilities
- Serving food to the homeless
How the 2-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 or less, no other banks or credit unions currently has a higher rate than MainStreet Bank is offering on its 2-year CD. The following table compares the 2-year CD to the two highest-rate CDs from other banks and the three highest-rate CDs from credit unions.
How the 1-Year No Penalty CD Compares
As most DA readers know, no-penalty CDs are not that common and the longer the term, the more competitive the CD. When compared to nationally available no-penalty CDs tracked by DepositAccounts.com, MainStreet Bank’s 1-year No Penalty CD APY currently ranks second.
The above information and rates are accurate as of 2/18/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.