Competitive 3-Year CD Rate at Rabobank - California Only

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Rabobank is offering a competitive special 3-year CD. It's called the Ride Safe CD, and it has a 2.00% APY as of 5/11/2011. Minimum deposit is $2,500. It has a limited bump-up feature. Within the first 6 months after opening the CD, you can request a one-time increase to the current Rabobank 36-month CD rate for the rest of your term. A checking or money market account is required to open this CD. The rate and details of this CD are listed in Rabobank's promotions page. I'm a little concerned with the small print in this promo page that states "Variable rate subject to change and determined at the Bank’s discretion." However, it doesn't make any sense to offer a bump-up CD with a variable rate. So it appears they mean the rate is variable until the CD is opened. If you are told something different, please leave a comment.

This CD is similar to Ally Bank's Raise Your Rate CD. Ally's CD rate is currently 1.49% APY for a 2-year term. Ally's CD has two advantages over Rabobank's CD: 1) the bump-up option can be used at anytime during the term, and 2) It's the only 2-year CD so the rate is more likely to stay competitive. The main issue with these bump-up CDs is that even if rates do go up, there's no guarantee that the bank will increase the rates on the bump-up CDs.

A branch visit is required to open this CD special, and according to the small print, not all branches may be offering this special. So be sure to call your local branch to verify it's available. Rabobank branches are located throughout California.

Rabobank is the 10th largest bank with headquarters in California. Its overall health score at DepositAccounts.com is 4 stars (out of 5) with a Texas Ratio of 15.17% (average) based on December 2010 data. Please refer to our financial overview of Rabobank for more details. The bank has been a FDIC member since 1981 (FDIC Certificate # 23364).

How It Compares to the Best CD Rates

The only bank that offers a nationally available 3-year CD rate that's over 2.00% is Tennessee Commerce Bank which has a 2.15% APY. The highest that's available at a credit union is 2.27% APY at Velocity Credit Union.

You can also get a 2.27% APY if you close an Ally Bank 5-year CD early after 3 years. This is based on Ally's very mild 60-day early withdrawal penalty and Ally's current 5-year CD APY of 2.40% (as of 5/11/2011). I have more details on this in my Ally Bank CD review.

To search for the best CD rates nationwide and in your state, please refer to our CD rates table.

Comments
Charley
Charley (anonymous)   |     |   Comment #1
I've spoken to Rabobank, both in connection with this CD and with an earlier promotion, about its confusing use of the term "variable rate" to describe a step-up CD.  They apparently get this question a lot, but their legal people think they have to use the term whenever the rate can change, even if it can only go up.  Anyway, I've obtained the bank's "rate sheet," which is incorporated into its Truth-in-Savings Disclosure, and it makes clear that the rate is fixed and not variable.
KenBDG
KenBDG   |     |   Comment #2
Thanks for the comment. Glad to hear the Truth-in-Savings Disclosure makes clear that the rate is fixed.
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