In early February, the new internet division of Midwest BankCentre, Rising Bank, opened its virtual doors for business. Included in its product line was a 1-year Term CD ($1k min/$500k max), which initially earned a respectable 2.85% APY. That rate lasted for three months before it began a slow decline over the next three months to 2.40% APY. Just a week ago, the APY dropped to 2.30%, bouncing up to 2.45% APY yesterday. Given that the 2.30% APY lasted only a week, I’m inclined to view yesterday’s rate increase as actually being a 5 bps increase and not a 15 bps increase. Whatever the amount, I’m glad to see a rate increase.
The “Transaction Limitations” section of the Truth-In-Savings disclosure states,
You may not make withdrawals of principal from your account before maturity.
You cannot withdraw interest from your account before maturity.
While those statements would indicate early withdrawals are not permitted, they are immediately followed by,
Early withdrawal penalties - (a penalty may be imposed for withdrawals before maturity)
The fee we may impose will equal 90 days' interest on the amount withdrawn subject to penalty.
Those statements imply that early withdrawals are permitted with a penalty. CSR confirmed that partial withdrawals are allowed with a penalty of 90 days’ interest for terms of 12 months or less, and 180 days’ interest for terms longer than 12 months.
According to the Truth-In-Savings disclosure, interest will be compounded and credited every three months. I mention this because an early closure (or early withdrawal) could be affected by interest that has not been credited.
High Yield Savings
While Rising Bank’s High Yield Savings APY has dropped from its original 2.45% to 2.10%, it’s still a pretty good rate, given the current rate climate.
A minimum $1k deposit is required to open a High Yield Savings account, with a maximum $500k balance allowed. As stated in the Truth-In-Savings disclosure,
You must maintain a minimum balance of $1,000.00 in the account each day to obtain the disclosed annual percentage yield.
In addition to its standard Term CDs, Rising Bank is also offering a 36-month Rising CD ($25k min/$500k max), which has both a rate bump-up option and an add-on deposit option. (Both options are independent of each other.) These two unique features can be useful in an uncertain interest rate environment.
The 36-month Rising CD features two opportunities to make additional deposits ($5k minimum) at any time during the term. The ideal add-on CD has a small minimum initial deposit and no limits on the add-on deposit amounts. With the $25k minimum initial deposit and the $500k maximum balance cap, the 36-month Rising CD is certainly not “ideal,” but it could prove to be a good deal, considering the possibility of rates continuing to fall in the next year.
The rate bump-up option is described in the Truth-In-Savings disclosure as follows:
We will not change the rate on your account during the term of the account. However, you have the option to exchange this interest rate two times during the original term of the account. The new interest rate will be the interest rate we are then offering on the 36 Month Rising Certificate of Deposit. This exchange will be at no cost to you. If you make an exchange, the maturity date of this account will remain the same as originally scheduled. You may exercise this option two times during the original term of the account.
This bump-up option works just like that of Ally Bank’s Raise Your Rate CDs. My primary issue with the bump-up feature is that it depends on the bank keeping the rate competitive. Another problem is that even if the bank does keep the CD rate competitive, it still can be difficult to know when to use the bump-up option. If you jump too early on a rate bump, you may miss out on future rate increases. On the other hand, if you wait too long, you’ll lose the benefit of the higher rate since there will be less time until the CD matures.
Unlimited payable-on-death (POD) beneficiaries are allowed, but can only be named after an account is opened; the online application isn’t set up to accept beneficiaries. Only individuals and trusts (no charities/non-profits) can be named as beneficiaries. While Social Security numbers are not required for beneficiaries, CSR stated having a Social Security number for identification purposes is preferable.
Headquartered in Lemay, Missouri, Rising Bank offers its product line nationwide to U.S. citizens and resident aliens, 18 years or older, who have a valid Social Security number or Taxpayers Identification Number.
Rising Bank only offers individual and joint accounts. Custodial accounts and trust accounts are not permitted, but as mentioned above, a trust can be named as a beneficiary.
As an internet bank, Rising Bank has no brick-and-mortar branches. Opening any type of account can only be done online. The online application process is designed to be easily completed on a PC or a smartphone in three minutes or less.
As an online division of Midwest BankCentre, Rising Bank operates under Midwest BankCentre’s FDIC Certificate and shares its financial history.
Rising Bank/Midwest BankCentre has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 2.60% (excellent) based on June 30, 2019 data. In the past year, the Bank increased its total non-brokered deposits by $109.81 million, an excellent annual growth rate of 8%. Please refer to our financial overview of Rising Bank/Midwest BankCentre (FDIC Certificate # 1058) for more details.
According to the small print of Rising Bank’s website:
Rising Bank® and Midwest BankCentre® are treated as the same entity for the purpose of calculating FDIC insurance limits and deposits.
Rising Bank is the online division of Midwest BankCentre, a community bank with 18 branch locations in the greater St. Louis metropolitan area. Founded in 1906, Midwest BankCentre is currently the 13th largest bank in Missouri, with assets in excess of $1.9 billion and nearly 58,000 customer accounts.
You might wonder, does a community bank have the technology resources to successfully run an internet bank? Financial technology (fintech) companies are helping community banks by providing services to help manage internet divisions. Midwest BankCentre has partnered with XpertSavers to assist with Rising Bank. The following excerpt from XpertSavers’ home page describes what they do:
XpertSavers is an alternative channel for banks and credit unions to gather deposits. Our team is led by a group of banking experts with a solid record of building internet deposit businesses, while meeting the rigorous regulatory and security demands of the financial industry.
How the 1-Year Term CD Compares
When compared to 218 similar length-of-term CDs tracked by DepositAccounts.com, which require a similar minimum deposit and are nationally available, Rising Bank’s 1-year Term CD APY currently ranks third.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.53% APY||14-month CD Special||Financial Resources Federal Credit Union|
|2.50% APY||High-Rate 12-Month CD||BrioDirect|
|2.45% APY||12-Month Term CD ($1k min)||Rising Bank|
|2.42% APY||12-Month Certificate||State Department Federal Credit Union|
The above rates are accurate as of 10/1/2019.
To search for the best CD rates, both nationwide and state-specific, please refer to DA’s CD Rates Table page.