2.75% APY 60-Month CD At Prime Alliance Bank

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UPDATE 9/4/2019: Rates lower – 60-month (2.75% APY) and 48-month (2.70% APY).

Deal Summary: CDs – 60-month (3.15% 2.75% APY) and 48-month (3.05% 2.70% APY), $500 minimum deposit.

Availability: Nationwide through online application.

I’m starting this blog post with a quote from this week’s CD Rates Summary.

The Vanishing 3% CDs
For CDs that are nationally available, no banks are offering them with yields of at least 3%.

I’m pleased to update that statement: Utah-based Prime Alliance Bank (Prime Alliance) is currently offering 3.15% 2.75% APY and 3.05% 2.70% APY on its nationally available 60- and 48-month CDs, respectively. Either CD can be opened with a $500 minimum deposit, with no stated balance caps.

APYMINMAXINSTITUTIONPRODUCTDETAILS
2.50%$500-Prime Alliance Bank60 Month CD
2.50%$500-Prime Alliance Bank60 Month IRA
2.40%$500-Prime Alliance Bank48 Month CD
2.40%$500-Prime Alliance Bank48 Month IRA
Rates as of September 19, 2019.

All Prime Alliance CDs are also available as IRAs (Traditional), earning the same APYs with the same funding requirements.

I have to admit, I don’t know when Prime Alliance began to offer nationally available accounts. Banks and credit unions don’t normally inform DA of changes in their market area/field of membership, so learning about a change is usually fortuitous. One of my staff was checking out the 60-month CD, thinking it was probably a local deal. She saw the online application didn’t list any geographical limitations and Prime Alliance confirmed all of their product line is available on a nationwide basis.

As stated in the Certificates of Deposit disclosure, the Early Withdrawal Penalty for both the 48- and 60-month CDs reads as follows:

If you withdraw any of the principal before the maturity date, we may
impose a penalty of three months interest on the amount withdrawn.

If rates start to trend upward in the next four years, this very mild EWP could prove to be quite advantageous. Using DA’s Early Withdrawal Penalty Calculator, you can see what the effective yields would be on a month-by-month basis. For example,

  • 2.65% APY – closed at 18 months
  • 2.77% APY – closed at 2 years
  • 2.91% APY – closed at 3 years
  • 2.97% APY – closed at 4 years

Interest is compounded quarterly and credited quarterly, and may be withdrawn either by check or deposited into another account.

Funding and Accessing Maturing Funds

Funding a CD can be done by ACH, wire transfer, or check. Maturing funds will be distributed by ACH, wire, cashier’s check, or transferred into an existing Prime Alliance Bank checking or savings account. There is a 10-day grace period before a CD automatically renews.

Unlimited beneficiaries (assigned percentages) can be named, but the online application only allows for two names to be entered; additional beneficiaries can be named by phone after the CD is opened. Social Security numbers are required for all beneficiaries.

Availability

Headquartered in Woods Cross, Utah, Prime Alliance Bank offers its entire product line to all U.S. citizens and residents aliens (18 years or older, with a current U.S. address) through an online application.

Opening and funding a CD can be done online. If you live in the Salt Lake City area, a CD can be opened at the Bank’s sole Utah branch located at S 500 W in Cross Woods. Coincidentally, Prime Alliance Bank is across the street from Mountain America Credit Union.

Note: The online application requires that a username, password, and authentication phrase be created, allowing the applicant “to check the status of your application or complete an application.”

Bank Overview

Prime Alliance Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 11.40% (average), based on March 31, 2019 data. In the past year, Prime Alliance Bank has increased its total non-brokered deposits by $73.59 million, an excellent annual growth rate of 34.56%. Please refer to our financial overview of Prime Alliance Bank (FDIC Certificate # 57920) for more details.

Established in 2004, Prime Alliance Bank is a community bank, which focuses on construction and development financing, in addition to small business loans. According to a 2018 press release,

Prime Alliance Bank, located in Woods Cross, UT, soared to the top of S&P Global Market Intelligence’s 2017 ranking of the best performing community banks under $1 billion in assets.

To compile this ranking, S&P Global Market Intelligence calculated scores for each company based on six metrics: pretax return on tangible common equity, net charge-offs as a percentage of average loans, efficiency ratio, adjusted Texas ratio, net interest margin and loan growth.

Based on the above metrics and other criteria in the report, 4,383 banks and thrifts were eligible for the ranking.

Prime Alliance ranked 15th on the list of national banks with $304.8 million in total assets, a 24.00 percent loan growth rate and overall efficiency ratio of 31.86 percent.

How the CDs Compare

When compared to 179 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Prime Alliance Bank’s 60-month CD APY currently ranks first.

Interest RateCD Length of TermCredit Union/Bank
3.15% APY60-Month CDPrime Alliance Bank
3.00% APY60-Month CDHanscom Federal Credit Union
2.68% 9PY60-Month Share CertificateUnited States Senate Federal Credit Union

When compared to 170 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are available nationwide, Prime Alliance Bank’s 48-month CD APY currently ranks second.

Interest RateCD Length of TermCredit Union/Bank
3.10% APY48-Month CDMAC Federal Credit Union
3.05% APY48-Month CDPrime Alliance Bank
2.83% 9PY48-Month CertificateState Department Federal Credit Union

The above rates are accurate as of 8/30/2019.

To search for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.

Related Pages: Salt Lake City CD rates, 5-year CD rates, nationwide deals

Comments
InterestYields
InterestYields   |     |   Comment #1
Interesting, did not know any bank with a lower EWP than Ally (3 mo vs 5 mo for a 60 month CD although Ally used to have only 2 month EWP). "Interest is compounded quarterly and credited quarterly" is not ideal but if anyone has or opens an online account with them, please share your experience asap. "Unlimited beneficiaries (assigned percentages) can be named" sounds good "but the online application only allows for two names to be entered" suggests their online management features would not compare to Ally. Wonder if early CD closures can be done by account owner immediately online like at Ally or require contacting the bank with wait times & how long these top rates will last..?

Thanks Ken, please update when more is learned about this small bank apparently now with the top nationwide rate & relative best bank EWP..?
Joe Dum
Joe Dum   |     |   Comment #2
So they steal the interestt for a THREE MOTNS before paying it?

Thanks no thanks!
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deplorable 1
deplorable 1   |     |   Comment #19
Not necessarily you need to call and ask or alternatively if you wait until the quarterly interest posts and then close it your still good either way. Only 90 day EWP on a 5 year CD is a good deal any way you look at it.
InterestYields
InterestYields   |     |   Comment #34
Rates down 40 basis points for the Prime Alliance Bank 5 year CD, APY now 2.75% no longer 3.15% APY..
Anonymoose
Anonymoose   |     |   Comment #3
Regarding beneficiaries...Most FIs I have done business with have forms that only have entries for up to two beneficiaries. But almost all allow more to be added by using additional forms or by addendum to the form to add the additional beneficiaries. I think this is a minor issue since it's something you usually only have to set up once.

Not many FIs have an online system that can rival Ally's. I have not seen any that allow you to do as many account management tasks online as Ally does. Unfortunately though, it seems that Ally is, at least for the time, no longer interested in being rate competitive.

Regarding the quarterly interest compounding and crediting.

The compounding period is essentially irrelevant. Your APY is 3.15%. That's all that matters.

With regard to the quarterly crediting, it's also irrelevant unless you take either interest or principle out early. Then it may or may not have some relevance depending on the terms and your needs. If, for example, you need monthly income from this investment and need to take the interest out monthly (if that is even allowed), then yes, that would be an issue. But if you hold the CD to term with no withdrawals, then it is also irrelevant.
Joe Dum
Joe Dum   |     |   Comment #4
Theft is RELEVENT to ME!
Anonymoose
Anonymoose   |     |   Comment #5
How is it theft?
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ricsue
ricsue   |     |   Comment #6
Thank you for posting this. Easy application, they called me to verify I applied, and followed with an email to instruct to watch for trial deposits in the funding account. Glad to have gotten this deal.
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ricsue
ricsue   |     |   Comment #36
Trial deposits were in funding bank over weekend, verified at website; account approved and funded from my external account today. Very smooth process.
MARK
MARK   |     |   Comment #7
I would advise all of you to lock into something like this while you can.......Rates are dropping like a stone and if you think they can't go to zero you had better think again.
Hooked
Hooked   |     |   Comment #11
Signed up and easy, though you need patience to click through all the links. Received email in about an hour later to look out for trial deposits in funding account. Thanks, Ken and your staff for the great find!
Hooked
Hooked   |     |   Comment #37
Trial deposits did not arrive until yesterday. Emailed bank today and received confirmation that they will transfer the funds this evening for my CD, locked at last week’s higher rate. Nice small bank!
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Ben
Ben   |     |   Comment #15
Not sure how the quarterly crediting of interest works with an early withdraw. if funds withdrawn several months into the quarter, would I receive any interest for the quarter?
Anonymoose
Anonymoose   |     |   Comment #16
Very likely not. But if you think you might have to withdraw funds before maturity you should ask.

Also, if you have the option to time your withdrawal of funds to take place immediately after the interest is credited you can minimize or eliminate this effect.
InterestYields
InterestYields   |     |   Comment #17
Yes I'd also want to know how the quarterly crediting of interest works in the context of an early withdrawal. What I like about banks with low EWPs like Ally & apparently Prime Alliance Bank is you can essentially pick your term with increasing yield through 60 months, in this case for example between 9 months to 60 months you could pick 2.11% - 3.15% effective APY after EWP (per your liquidity needs if full term becomes an issue). Follow DA’s Early Withdrawal Penalty Calculator link above for a month by month breakdown but in this case perhaps quarterly applies until we get the answer as to how the quarterly crediting of interest works in the context of an early withdrawal. Honestly I've never dealt with such a small bank & if you Google: Prime+Alliance+Bank the most recent review contributed to some pause. Interested in DA experiences here if more people care to share. - Thanks
deplorable 1
deplorable 1   |     |   Comment #18
I wouldn't do a early withdrawal until AFTER the quarterly interest posts to the account. Notice it says "compounded quarterly and credited quarterly" as opposed to "compounded daily and credited quarterly". Just a guess but say you decided to do a early withdrawal a day or two before the interest posts to the account it could be a 6 mo. EWP.
MAGA
MAGA   |     |   Comment #20
Hypothetical question, how do you cover a million dollar invested in one FI with two people? I know you can use beneficiaries, but how to you structure it one, two or more accounts?
Anonymoose
Anonymoose   |     |   Comment #21
You cannot fully insure $1 million of deposits in one FI with either FDIC or NCUA with accounts titled to only two people. The only exception would be if some of the accounts are IRA accounts. In the rare case where the FI offers some kind of other type of insurance, you may be able to insure that amount with two people through the alternative insurer.
Anonymoose
Anonymoose   |     |   Comment #22
Sorry, late at night, not thinking straight. You can accomplish this with three accounts. An individual account for each of the two people, and a joint account with both people on the title. The two individual accounts will be insured for $250,000 each and the joint account will be insured for $500,000 for a total of $1 million coverage.
Dan
Dan   |     |   Comment #24
If joint account, does one have an option to choose the primary owner (the person that will receive 1099) thus the one will pay the taxes on the interests? Can you shed light on how paying taxes on interests in case of joint account (non-married)? Who will receive the 1099 or can you choose who gets the 1099? Thank you.
deplorable 1
deplorable 1   |     |   Comment #28
I think Each pays the interest on $250,000. Not 100% sure but I found this:
https://www.nerdwallet.com/community/t/how-does-an-unmarried-couple-report-income-from-joint-accounts/6849
deplorable 1
deplorable 1   |     |   Comment #27
Sorry Anonymoose I was typing and didn't see your correct answer.
Dan
Dan   |     |   Comment #23
So with account titled to 2 people (joint owners), is that account insured up to $500K?
How about, open 2nd joint account at same institution, will that second account then be insured up to $500K? So 2 x joint accounts = $1,000,000? Sorry, I'm new at this and want to verify. I see that some institutions like Wealthfront, Betterment say they insure up to $1M? I appreciate anyone can help clarify/answer. Thank you.
deplorable 1
deplorable 1   |     |   Comment #26
No dice Dan you need a minimum of 3 accounts unless you have DIF coverage then one account will suffice.
Anonymoose
Anonymoose   |     |   Comment #31
Regarding Wealthfront and Betterment. These are neither banks nor credit unions. They are a new type of financial advisory firm called "robo-advisors," which provide automated financial advisory services.

With regard to cash deposits, they are not insured directly through the financial advisor. They place your cash in FDIC insured banks. Since they can use multiple banks, it increases the maximum amount of insurance coverage while you still see it as only one account.

There has been some controversy about this method and whether or not it is a safe as opening up an account directly in a bank or credit union.
Y??
Y??   |     |   Comment #32
"With regard to cash deposits, they are not insured directly through the financial advisor. They place your cash in FDIC insured banks. Since they can use multiple banks, it increases the maximum amount of insurance coverage while you still see it as only one account."

Fidelity Investments and Vanguard handle cash deposits the same way. So are they unsafe because they use the same method. I don't think so.
Anonymoose
Anonymoose   |     |   Comment #33
It is not a question of being "unsafe," it is a question of the degree of safety.

You can argue that neither SIPC, FDIC nor NCUA insured deposits are as safe as a direct investment in US treasury securities. That is not the same as calling them "unsafe." Safety is a relative term.
deplorable 1
deplorable 1   |     |   Comment #25
One way is to open a account in Massachusetts with DIF coverage above $250,000. One account and everything above $250,000 is covered by DIF insurance.
The other way is as follows:
CD#1 You $250,000
CD#2 Spouse $250,000
CD#3 Joint $500,000
Total 1 million According to Edie this works https://edie.fdic.gov/
Dan
Dan   |     |   Comment #29
Thank you. Do you (or anyone please) if know the answer to my tax question posted above? (Joint account, non married, does one usually have the option to select who gets the 1099 b/c the one who gets the 1099 pays taxes on the interests correct)? Thank you
Anonymoose
Anonymoose   |     |   Comment #30
All the income from a joint account will be reported under one owner's SSN. You can choose any owner's SSN and the 1099 will be issued to them.

If one person is going to pay all the tax it should be simple. But if more than one person is going to pay the taxes it will complicate the tax return because you will have to report each person's share of the income from the account separately but will only receive one 1099.
deskandchairs
deskandchairs   |     |   Comment #35
Their website has been changed to show 60m CD now at 2.75% apy
Kit
Kit   |     |   Comment #38
This is a very nice bank. The application was very straightforward. Thanks Ken for the tip.

I applied for a 5 year CD on 9/3/19. I called and the customer service rep said Prime Alliance does not pull credit reports. However, the application did ask me some credit type questions and then approved my application. Microdeposits were sent to my external account promptly the next day on 9/4/19--the same day the 5 year CD rate decreased from 3.15% APY to 2.75%. I called Prime Alliance's customer service and he told me as long as I applied for the CD before the rates went down they would honor it even if not yet funded. I linked my external account to Prime Alliance 9/5 and on 9/6/19 the 3.11% APR/3.16? APY (per their application's fine print) 5 year CD showed up online in my account.

The low 3 month EWP makes this CD a great emergency fund. I am just sorry I only opened/locked in the rate of 1 CD during the time of the application.
5.55% 10-Month CD at an Utah Bank (Prime Alliance)
Prime Alliance Bank is offering a promotional CD with a yield of 5.55% APY and a term of 10 months. The minimum deposit is $5,000. It allows a one time withdrawal without a penalty.

The bank is located in Woods Cross, Utah which is about 10 miles north of Salt Lake City. The bank is FDIC insured (Certificate # 57920).

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