Competitive Long-Term CD Rates at Shelter Financial Bank in Several States


Several insurance companies like State Farm and MetLife have banks that offer deposit accounts. I just found another one that's under Shelter Insurance Companies. Its bank is called Shelter Financial Bank, and it's currently offering some very competitive long-term CD rates. The notable long-term CD rates include a 3.20% APY 7-year CD, a 2.95% APY 6-year CD, and a 2.55% APY 5-year CD. Minimum deposit is $1,000. Rates are 10 basis points higher for the Jumbo CDs with a $95K minimum deposit. These rates are listed in the bank's deposit rates page as of 12/28/2010.

As a comparison to internet banks on 12/28/2010, the best 7-year CD rate is 2.75% APY at Discover Bank. For credit unions with easy membership, PenFed has the best 7-year CD rate with a 3.25% APY.

There's an online application. However, according to the bank rep, they only open accounts for those in their insurance market area which includes the following 14 states: Arkansas, Colorado, Louisiana, Mississippi, Missouri, Iowa, Illinois, Indiana, Kansas, Kentucky, Nebraska, Nevada, Oklahoma and Tennessee.

The online application allows you to fund the CD with an ACH transfer from your current bank. I was told that you can also have the CD funds transferred out via ACH at maturity. Wire transfer is also an option, but the fee for an outgoing wire transfer is $25. I was told they usually decide on rate changes on Friday and make those changes effective the following Monday.

The bank does provide the CD disclosure online. One major downside is a harsh early withdrawal penalty. For terms of 5 years and above, the penalty is 730 days (2 years) of interest.

It's a small bank with $181 million in assets and with one branch in Columbia, Missouri. The bank has an overall health score at of 3 out of 5 with a Texas Ratio of 2.63% (excellent) based on September 2010 data. Please refer to our financial overview of Shelter Financial Bank for more details. The bank has been a FDIC member since 1999 (FDIC Certificate # 35002).

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