Since Colorado Fed S B is offering high CD rates, I thought I'd post regarding my recent account opening experience. Their account opening experience is both complex and efficient. By complex I mean they used just about every security requirement that I have experienced with all other online banks. Since I have a credit freeze on my accounts at all of the credit bureaus, I called ahead to ask if that would be a problem. They said that since they use a credit bureau to verify applications, I would need an extra step of emailing an image of my drivers license; no problem I've had this request before.
They require an ID and password be set up for purposes of processing the application. However, once the CD is funded, they required an entirely new/different ID & PW for account access (through electronic banking); I've encountered this complexity at one other institution. Like most online banks, they send test deposits/withdrawals to your funding bank, as part of the account set up. So, I started my application before the funds had even been moved into my funding account. You control the funding timing, because the CD is not funded until you respond to report the test transactions. CFSB, established the effective date of my CD on the date I reported the test transactions and initiated ACH transfer to fund the CD. Hence, I am earning interest before they have received the funds. No lost interest.
CFSB's disclosures make it pretty clear that you need to fund a CD from an account that you expect will be open to receive the proceeds at maturity, as they will only electronically transfer to the opening account. As another poster observed, this could be viewed as a security feature.
CFSB initiated their processing steps as soon as they had the necessary information at each stage, thus I say they are efficient for CDs. I think this is the most reliable of all the highest CD rate institutions, based on reviews on this site.
Just moved from Goldman Sachs to Colorado Federal Savings Bank last week. So far no problems... Only thing I'm not thrilled about is they don't have verification for logins. However, from what I can tell, you're limited to only one bank that is linked to the account so the only way to transfer money out of the account online would be to send it back to your own bank account at the linked bank. I guess that's secure enough for me. Certainly can't beat the yield!
Truth is that I love Colorado Federal Bank. They have been my bank for more than 20 years and over time have gone way above and beyond the call of duty in the way they have treated me. About a year and half ago I was seriously ill and not working, and my funds were very low. While I was in the hospital some software companies I had purchased subscriptions through submitted renewals, without my authorization, via my PayPal account linked to my checking account. I didn't have the funds to cover these charges and this resulted in a couple insufficient fund changes against my account. First thing I did was go to PayPal and have these charges reversed. I then sent an email to the bank explaining my situation and the bank reversed the insufficient fund charges to me. This made an enormous difference to me at a time when money was really tight. I really feel like I have received excellent service from Colorado Federal, and I am happy to say so.
*EDIT* Some new ACH info: Don't try to pull money from Colorado Federal: "It is Colorado Federal Savings Bank policy to allow funds transfers only if they are initiated in our online banking system. In accordance with this policy we have returned the following transfers..." This policy is offset, somewhat, by its high limit transfers, but might inconvenience some folks who would prefer to initiate ACH elsewhere.
When one opens a CD with Colorado Federal via ACH, the bank opens the CD prior to the funds being transferred and puts a de minimis amount of money in it for the ACH verification. It cuts the maturity of the CD by a week or two while also decreasing the total return. For instance, a $10,000 one year CD at 1.35% APY (1.34% compounded quarterly) $10,131.55 or so. (Yes, only a few dollars difference, but something to consider. Also, the maturity date will not be the anniversary of the balance transfer.) For a renewal CD, the above would not apply.
Second oddity: If one has an online savings account with Colorado Federal, one cannot fund a CD from the account, but must use an externally linked checking account.
After too long and complicated registration process - it was rejected (for no good reason, I opened another account at another bank just a moment earlier). I tried to get help by email, I was dismissed and asked to do registration again.
With that much help during registration, I wonder how much help I would get if I asked about real money (I wanted to open CD).
Only Ken's summary on Interest paid before maturity?, NO saved me. I live 45 miles from Colorado Federal and almost applied for the CD for the 2.12% rate. This is an old style interest held to maturity CD.
Beware, they totally failed to include this in their terms and disclosures. I never found any information on interest held to maturity on their site. They assume you do not want monthly interest ACH.
A real bummer as I was hoping to find an internet bank locally in Denver for CDs.
I opened an account with this bank when they were offering a substantial yield. The gradually lowered the yield over the next several months and now are a bankrate three star bank. When I decided to switch to another bank they would not credit me my last month’s interest! They cited a loophole in one of their disclosures that states if you close your account before interest is credited, you will not receive the accrued interest. I don't recall seeing that disclosure when I opened the account. What's worse, I didn't even close my account, they did it automatically when I transferred my balance away. This seems very unethical to me and definitely not something I have ever dealt with any other institution. I checked my new institutions disclosures and they happily pay accrued interest when an account is closed. When I asked to talk to a manager about this issue I was sent to voicemail. I missed his return call but he dismissed my complaints as invalid and did not return my second call. Seems like they would rather have an unhappy customer than do the ethical thing. They got the use of my money for 25 days and refuse to pay the stated interest. Other than that, their statements don't look very official and their interface to transfer money is very odd.
I made a withdrawal of most of my money to make a down payment. They closed my account automatically -- later I learned this is their policy whenever your balance drops below the minimum. They closed my account right before the end of the month, making it so I lost all the interest I was supposed to have earned for the month. Then they refused to do anything about it.
Watch out because they are trying to rip people off, and they might get you if your'e not careful.