Update: This offer has expired. Please refer to the State Farm Bank page for the latest rates and offers.
Deal Summary: 60-month CD, 2.30% APY, $500 minimum deposit
In early December, the good news was that State Farm Bank had raised the rate on its 60-month CD by 30 basis points. The good news continued this week with an additional 20 basis points being added, resulting in a 2.30% APY, the highest APY for the 60-month CD since July 2011.
The minimum deposit to open any State Farm Bank CD is $500, and while State Farm Bank’s website lists two balance level tiers (up to $100K and $100K+), the above APY applies to both tiers.
The 60-month CD is available as an IRA (Traditional, Roth, and CESA), earning the same APY with the same funding requirements. More detail on these CDs is available on the Bank’s rate page. Entering your zip code is required to view the rates, but the previously mentioned APY applies to all zip codes.
As stated on State Farm Bank’s Truth in Savings Disclosure page, the Early Withdrawal Penalty reads (in part) as follows:
There is a minimum of $25 penalty or the following,
Penalty equal to 545 days' interest (earned or not) on the
principal withdrawn for a CD Term of 48 months or greater
Headquartered in Bloomington, Illinois, State Farm Bank offers accounts nationwide through the internet, by phone, and through individual State Farm agents. Anyone with a valid Social Security Number (SSN), Tax Identification Number (TIN) or Individual Taxpayer Number (ITN) can open an account with State Farm Bank.
State Farm Bank was established in 1999 as a separate entity, distinct from the ubiquitous State Farm insurance brand, and is currently the 78th largest bank in the country with assets in excess of $16.8 billion.
Opening a CD with State Farm Bank can be opened online, by phone, or by visiting a State Farm agent. If you chose to open the CD through a State Farm agent, please note that beyond opening the CD, the individual agent has no fiduciary responsibility and you must manage your account online or by phone.
I have written in the past in greater detail about State Farm Bank's CDs/IRAs, but one feature bears repeating:
Normal distributions will be allowed on IRAs without incurring
an early withdrawal penalty for customers who have reach age 59½.
Transfers or rollovers to another IRA are not considered normal distributions.
This is significant, since many banks do not waive early withdrawal penalties for this type of distribution.
State Farm Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.68% (excellent) as of September 30, 2016. In the past year, State Farm Bank increased its total non-brokered deposits by $36.22 million, an above average annual growth rate of 0.34%. Please refer to our financial overview of State Farm Bank (FDIC Certificate #34617) for more details.
How the CD Compares
When compared to the 165 similar length-of-term CDs tracked by DepositAccounts.com that require a similar deposit and are available nationally, State Farm Bank’s 60-month CD APY currently ranks second.
The above rates are accurate as of 2/10/2017.