Merrick Bank Long-Term CDs Are Now Near Rate-Leaders

Utah-based Merrick Bank recently raised the rates on about half of its CD product line. Following an increase of 20 bps, the 48-month CD and 60-month CD both earn 4.80% APY and are the most competitive CDs offered by Merrick Bank. While not having great rates, the 12-month CD (5.67% APY) and 18-month CD (5.60% APY) are nonetheless noteworthy. The minimum opening deposit for any Merrick Bank CD is $25k, with a $250k balance cap. (Any interest accrued and paid into the CD is exempt from the $250k balance cap.)

When I last wrote about Merrick Bank CDs ten months ago, I described the 12-month/60-month CD yield curve as looking like a flat line. With an 87 bps difference between the 12-month and 60-month CDs, the yield curve is currently decisively inverted.

Early Withdrawal Penalty

As stated in the CD Terms and Conditions (page 6), the Early Withdrawal Penalty (emphasis is mine) reads as follows:

Subject to applicable law, we are not required to give our consent to any withdrawal from the Account before the Maturity Date. If we consent to a proposed withdrawal before the Maturity Date, you must withdraw the entire balance of the Account and we will charge the early withdrawal penalty and deduct it from the Account balance. Any interest accrued but not yet credited will be applied as a credit to the Account balance.

The early withdrawal penalty is the dollar amount equal to the number of day’s interest, based on the Term of the Account below, the Account balance, and the interest rate in effect on the Account at the time of withdrawal.

• Terms of 364 days or less – 90 days interest
• Terms between 365 and 1,459 days – 180 days interest
• Terms of 1,460 days or longer – 270 days interest

Bottom line, only an early closure is possible, but not guaranteed. While the no partial withdrawals policy has not changed, the Early Withdrawal Penalty is not as harsh as it was about two years ago.

Possibility of Being Called

The Closing the Account section of the CD Terms and Conditions document also includes this statement:

We may close the Account at any time, for any reason and without advance notice.

To my eyes, that quote reads like the definition of a callable CD, but CSR stated it is “highly unlikely” the Bank would exercise their right to do so. While that’s mildly reassuring, there’s always a possibility a CD could become callable. As one of my colleague said, “It’s not callable until it is.”

Availability and Account Opening

Headquartered in South Jordan, Utah (a bedroom community of Salt Lake City), Merrick Bank offers its product line nationwide to all U.S. citizens and residetn aliens through an online application.

According to the CD Terms and Conditions document (page 2), account owners must meet all of the following conditions:

Funding and Other Details

The following information is from the CD Terms and Conditions document and a conversation with CSR.

• Funding* – ACH only.
• Ownership – Individual or joint.
• Interest – Compounded/credited monthly; interest pay outs via ACH on a monthly basis can be requested.
• Maturing Funds – ACH back to the original funding account.
• Beneficiaries – Unlimited with equal shares, Social Security numbers are preferred but not required.
• Grace Period –10 business days before automatic renewal.
• Credit Check – None for current customers, ChexSystems for new customers.

*CSR stated there is a 15-day window in which to fund a CD and the rate is locked during that time frame.

Bank Overview

Merrick Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 12.54% (above average), based on March 31, 2023 data. In the past year, Merrick Bank has increased its total non-brokered deposits by $1.02 billion, an excellent annual growth rate of 67.3%. Please refer to our financial overview of Merrick Bank (FDIC Certificate # 34519) for more details.

Merrick Bank is currently the 14^th largest bank in Utah, with assets in excess of $5.8 billion and more than 205,000 customer accounts. Founded in 1997 as a wholly owned subsidiary of CardWorks, Merrick Bank is a top-20 issuer of Visa® credit cards serving nearly 3 million cardholders and having extended more than $5.3 billion in credit. While Merrick Bank specializes in non-prime consumer lending, it also provides finance options to consumers through marine and recreational vehicle dealers throughout the country.

How the 48-month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $25k or less, two credit unions have higher rates than currently offered on the Merrick Bank 48-month CD. The following table compares the 48-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

How the 60-month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationally and have minimum deposit requirements of $25k or less, two credit unions have higher rates than currently offered on the Merrick Bank 60-month CD. The following table compares the 60-month 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 9/23/2023.

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