Popular Direct Nationally Available 2-Year CD Is A Rate Leader
New York-based Popular Direct began the week by raising the rates on three of its Popular Direct CDs – 2-year (1.50% APY), 3-year (1.60% APY), and 5-year (1.70% APY). The minimum opening deposit for any Popular Direct CD is $10k, with no stated balance cap.
While all three CDs offer competitive rates (which will probably be featured in tomorrow’s CDs Rates Summary), the 2-year CD currently has the highest rate offered on nationally available 2-year CDs tendered by a bank.
Popular Direct’s harsh Early Withdrawal Penalty (EWP) has drawn criticism from some DA readers. As stated on the CD Disclosure page, the EWP reads as follows:
For terms equal to or greater than 12 months but less than 36 months, the fee is 270 days simple interest.
For terms equal to or greater than 36 months but less than 60 months, the fee is 365 days simple interest.
For terms equal to or greater than 60 months, the fee is 730 days simple interest.
Another negative aspect of the EWP is that it also applies to credited interest. According to the CD Disclosure:
Withdrawals of either credited interest and/or principal
prior to maturity will result in early withdrawal penalties.
The CD Disclosure page also states that interest is compounded daily and credited on the last day of the month. The automatic renewal grace period is 10 calendar days following the maturity date.
Funding a Popular Direct CD must done through an external account from another U.S. financial institution that has been “validated through the External Account function in Popular Direct Online Banking.” After linking the external account, you may not change it for 60 days. Each time you change the external account, it cannot be changed for another 60 calendar days.
Availability
As an online division of Popular Bank, Popular Direct’s website states,
Popular Direct products are offered by Popular Bank, the U.S. banking subsidiary of Popular, Inc. [NASDAQ: BPOP], a publicly traded, full-service financial services provider in the United States, Puerto Rico and the Caribbean.
Opening any type of account, including the 2-Year Popular Direct CD, must be done online.
Bank Overview
Popular Direct is an online division of Popular Bank, an FDIC member institution and a New York state chartered bank. Popular Direct and Popular Bank deposits are combined for purposes of determining FDIC coverage eligibility.
Popular Direct/Popular Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 1.65% (excellent) based on December 31, 2021 data. In the past year, the bank has increased its total non-brokered deposits by $81.69 million, an above average annual growth rate of 1.14%. Please refer to our financial overview of Popular Direct/Popular Bank (FDIC Certificate # 34967) for more details.
Established in 1999, Popular Bank was originally known as Banco Popular North America (BPNA). In the first six years of operation, BPNA acquired 13 banks located in California (3), Florida (2), Illinois (5), New Jersey, Puerto Rico, and Texas. BPNA was also the holding institution for the now defunct E-LOAN; in May 2017, all E-LOAN deposit products became Popular Direct products.
The Popular Bank rebrand occurred in 2018 and according to a Sun Sentinel 2018 article,
The name change is largely about conveying to the public a perception of a larger, more expansive bank with a broader base of services ranging from condo loans and single-family residential mortgages to private banking.
"When I started, we were Banco Popular and changed to Popular Community Bank," Velasco said in a telephone interview. "At that point it was the right thing for us to change. One of the challenges we had was that in the States, a lot of people perceived us as being a bank just for Hispanics or a bank for foreigners.
Popular Bank is currently the 14th largest bank headquartered in New York, with assets in excess of $10.3 billion and nearly 170,000 customer accounts.
How the 2-Year CD Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide and have minimum deposit requirements of $10k or less, no banks or credit unions currently have a higher rate than offered on the Popular Direct 24-month CD. The following table compares the Popular Direct 24-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 3/29/2022.
To look for the best CD rates, both nationwide and state specific, please refer to our CD rates table page.
