It’s been almost a year since I last wrote about State Farm Bank; the occasion for this blog post is yesterday’s rate increase on the 60-month CD (2.10% APY). Since January 2016, there have been eight rate changes (mostly downward), but in the past three weeks there have been two rate increases, resulting in 40 basis points being added to the APY.
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.
|2.10*%||$500||-||State Farm Bank||60 Month CD|
|2.10*%||$500||-||State Farm Bank||60 Month IRA (Traditional, Roth)|
|2.10*%||$500||-||State Farm Bank||60 Month CESA|
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 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 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Penalty equal to 545 days' interest (earned or not) on the principal withdrawn for a CD Term of 48 months or greater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 (FDIC Certificate #34617) 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 deposits by $359.7 million, an above average annual growth rate of 3.42%. Please refer to our financial overview of State Farm Bank for more details.
How the CD Compares
When compared to the 169 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 fourth.
The above rates are accurate as of 12/9/2016.