Before anyone feels the need to comment on the competitiveness of the Seattle Bank two Bump Up CDs, please understand this blog post serves an introduction to one of latest banks offering CDs on a nationwide basis.
At the beginning of the month, Seattle Bank substantially raised the rates of the majority of its CDs and unveiled the two Bump Up CDs. Although the CDs had rate increases of 96-138 bps, the new APYs are short of the current rate leaders.
|3.35%||$1k||-||Seattle Bank||60 Month CD|
|3.25%||$1k||-||Seattle Bank||48 Month CD|
|3.20%||$1k||-||Seattle Bank||36 Month CD|
|3.15%||$1k||-||Seattle Bank||24 Month CD|
|3.05%||$1k||-||Seattle Bank||12 Month CD|
The two limited-time Bump Up CDs don’t have the greatest rates, but they do have APYs higher than offered by two other online banks (Ally and Rising Bank) with similar bump-up CDs. Either Bump Up CD can be opened with a $1k minimum deposit and is capped at $220k. Interest is compounded daily and paid quarterly, with interest either reinvested or deposited into a Seattle Bank checking or savings account.
The Seattle Bank higher rates are offset by a couple of limitations. For example, unlike the Rising CDs, the Bump Up CDs don’t have an add-on deposit option. In addition, both the 24-month and 36-month Bump Up CDs allow only one bump-up, unlike the longer-term bump-up CDs at Ally and Rising Bank that allow two bump-ups. Another limitation listed on the landing page reads as follows:
One-time bump option allowed six (6) months from the date the account is opened, up until three (3) months before the end of the term.
The Bump Up CD FAQs explain how the bump works and it definitely has some drawbacks.
How will the new “bumped-up” rate be determined?
Should you decide to bump your rate, your new interest rate and APY will be equal to the interest rate and APY for the current standard CD with the term equal to – or closest but shorter than – the remaining number of days left on your certificate. For example, if you have a 24-month CD and you choose to bump 12 months and 1 day after opening your account, you will receive the rate and APY for the 9-month CD.
Long story short, the bump-up option’s intrinsic value is dependent on the shorter-term CD rates rising considerably.
The Bump Up CDs are also offered as IRA Bump Up CDs (Traditional and Roth), earning the same APYs with the same deposit requirements.
|3.10%||$1k||$220k||Seattle Bank||36 Month Bump Up IRA (Traditional, Roth)|
|2.99%||$1k||$220k||Seattle Bank||24 Month Bump Up IRA (Traditional, Roth)|
According to CSR, partial withdrawals are permitted, with an Early Withdrawal Penalty of 180 days interest for terms of 12 months or greater.
Funding and Maturing Funds
Funding any kind of CD can be done by ACH, wire, or check. Maturing funds will be distributed via cashier’s check, wire transfer, or transferred to another Seattle Bank liquid account (checking or savings). There is a 10-day grace period before a CD automatically renews.
Beneficiaries can be named, with percentages assigned, if so desired. Social Security numbers are NOT required when naming beneficiaries, with only full legal name, date-of-birth, and address being necessary.
Headquartered in Seattle, Washington, Seattle Bank previously offered its services and product line to the residents of Washington State. Seattle Bank has expanded its market area and currently offers the product line on a nationwide basis.
On a historical note, the online application used to suggest that out-of-state applicants could possibly open a CD: “If you reside outside of the state of Washington, your application will be considered on a case-by-case basis.” The new market area has done away with the “case-by-case basis” caveat.
Seattle Bank has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 14.40% (above average), based on December 31, 2022 data. In the past year, the Bank has increased its total non-brokered deposits by $97.45 million, an excellent annual growth rate of 19.59%. Please refer to our financial overview of Seattle Bank (FDIC Certificate # 35139) for more details.
Seattle Savings Bank was founded in 1999 by Seattle Mortgage as an institution to attract deposits and with which to make loans. In 2008, as a surge of bad loans hit, the bank was deemed “significantly undercapitalized” by Federal Regulators and told to “clean up its act and find new capital or a buyer.” In what would be a feel-good ending in a movie, the newly re-branded Seattle Bank formed a group of more than 60 local investors who recapitalized the bank in 2010 with $50 million. Since then, Seattle Bank has grown to become Washington’s 21st largest bank, with assets in excess of $762 million.
The above information and rates are accurate as of 5/10/2022.
To search for the best CD rates, both nationwide and state specific, please refer to our CD rates table page.