State Farm Bank Raises Rates On Longer Term CDs

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Availability: Nationwide (internet bank)

Earlier this week, State Farm Bank raised the rate on its 15-month CD Special (1.20% APY). While that rate isn’t that spectacular, the recent increases on the 36-month CD (1.70% APY) and 60-month CD (2.20% APY) are definitely worth noting.

The minimum deposit to open any of the CDs is $500, and while State Farm Bank’s website lists two balance level tiers (up to $100K and $100K+), the above APYs are the same for both tiers.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.60*%--State Farm Bank60 Month CD
1.60*%--State Farm Bank60 Month IRA (Traditional, Roth)
1.40*%--State Farm Bank36 Month CD
1.40*%--State Farm Bank36 Month IRA (Traditional, Roth)
Accounts mentioned in this post. Rates as of August 25, 2016.

All three CD are available as IRAs (Traditional, Roth, and CESA), earning the same APYs with the same funding requirements. More detail on these CDs can be viewed on the Bank’s rate page. Entering your zip code is required to view the rates, but the previously mentioned rates apply to all zip codes.

As stated on State Farm Bank’s CD information page, the Early Withdrawal Penalty reads as follows:

The early withdrawal penalty is a minimum of $25 or the following based on the principal withdrawn and dependent upon the CD term.

  • 12 to 23 months – 180 days of interest
  • 24 to 47 months – 365 days of interest
  • 48 months or greater – 545 days of interest

Availability

Headquartered in Bloomington, Illinois, State Farm Bank offers accounts nationwide through the internet, by phone, and through individual State Farm agents. State Farm Bank was established in 1999 as a separate entity, distinct from the ubiquitous State Farm insurance brand. 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's CDs 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.

Bank Overview

State Farm Bank (FDIC Certificate #34617) has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 6.31% (excellent) as of September 30, 2015. State Farm Bank's has an excellent capitalization level of 12.19%, a result of holding $16.76 Billion in assets with $2.04 Billion in equity. Please refer to our financial overview of State Farm Bank for more details.

How the CDs Compare

When compared to the 131 similar length-of-term CDs tracked by DepositAccounts.com that require a similar deposit and are available nationally, State Farm Bank’s 36-month CD currently ranks third.

When compared to the 117 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 currently ranks third.

The above rates are accurate as of 1/15/2016.

To search for nationwide CD rates and CD rates in your state, please refer to the CD rates section of DepositAccounts.com.

Comments


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