TotalDirectBank Short-Term CDs Are Rate Leaders

Florida-based TotalDirectBank (TDB) is continuing to offer very competitive short-term CD rates after three years of not being part of the rates peloton. The 6-month CD currently earns 5.56% APY, with the 12-month CD offering 5.65% APY. Since my mid-June blog post, 20 and 32 bps have been added to the 6-month CD and 12-month CD, respectively. The minimum opening deposit for any TDB CD is $25k, with a $1 million maximum amount allowed per client. (Note: the $1 million maximum applies to “a combination of Certificates of Deposits and Direct Money Market Deposit Accounts” at TDB.)

As stated in the Disclosures and Schedule of Fees document, the Early Withdrawal Penalty reads as follows:

Terms of 30 days up and including six months (based on a simple 12-month year), the penalty will be 1 month of the simple interest earned (this computation is based on a year with 360 days)

Terms greater than six months and up to one year (based on a simple 12-month year), the penalty will be 3 months of the simple interest earned (this computation is based on a year with 360 days)

Direct Money Market Deposit Account

In the last two months, the Direct Money Market Deposit Account (DMMDA) has added an additional 19 bps. The DMMDA now earns 5.26% APY on balances of $2.5k and above; balances of less than $2.5k do not earn any interest. The minimum opening deposit is $25k and the “maximum amount allowed per client is $1m.” The $1m maximum amount is the aggregate of all funds on deposit with TDB.

DMMDA Facts

• No check writing and no ATM/debit card.
• There are no limits on ACH transactions because an ACH (either outgoing or incoming) cannot be initiated by TotalDirectBank.
• No monthly maintenance fee.
• $10 excess transaction fee for each transaction beyond the allowed six per month.
• If transaction limits are exceeded three times in any rolling 12-month cycle, the account may be closed.
• $25 fee will be assessed if a DMMDA is closed within six months of opening

To initiate transfers to and from a TDB DMMDA, you'll have to rely on the ACH transfer capabilities of your other banks. At least TDB states this limitation in its FAQ:

What are the dollar limits for external/internal transfers?

TotalDirectBank does not have an external transfer option at this time. Please refer to your external bank for the dollar transfer limits.

Availability and Account Opening

As an internet bank, TotalDirectBank offers its product line through an online banking platform to U.S. citizens and resident aliens, who live anywhere in the U.S., "with exception of Florida, Puerto Rico, American Samoa, Guam, Northern Mariana Islands, and US Virgin Islands.”

Opening a CD and/or a Direct Money Market Deposit Account must be done using the TotalDirectBank online application.

As stated in the FAQs,

I have submitted my application; when should I expect a response?

Our usual time-frame to process an application is two business days. You should receive a confirmation email within two business days.

CD Funding and Other Details

The following information is from the TDB website and a conversation with CSR.

• Funding – ACH from a “Validated Account,” which can be checking, savings or money market account.
• Ownership – Individual or joint.
• Interest – Compounded daily/credited monthly and can be credited to the CD, or transferred monthly to another account via ACH.
• Maturing Funds – TDB does not currently have a transfer option. TBD will return CD maturing funds to the Validated Account or via another method if necessary.
• Grace Period – 10 calendar days before automatic renewal.
• Beneficiaries – The online application allows two beneficiaries to be named; additional beneficiaries can be added by contacting TDB; equal shares will be assigned; Social Security numbers are not required for beneficiaries.
• Credit check – Soft pull.

Bank Overview

As an online division of City National Bank of Florida (CNB), TotalDirectBank operates under CNB’s FDIC Certificate and shares its financial history.

CNB/TotalDirectBank has an overall health grade of “B+” at DepositAccounts.com, with a Texas Ratio of 2.14% (excellent), based on March 31, 2023 data. In the past year, the Bank has decreased its total non-brokered deposits by -$249.57 million, an average annual growth rate of -1.33%. Please refer to our financial overview of CNB/TotalDirectBank (FDIC Certificate # 20234) for more details.

As stated in the FAQs,

All deposits with CNB (including deposits through TotalDirectBank deposit products) are insured by the FDIC up to the applicable maximum amount allowed by law for each deposit ownership category. All balances for TotalDirectBank and CNB deposits would be combined for purposes of determining FDIC coverage eligibility.

With assets in excess of $26 billion and more than 77,000 customer accounts, City National Bank is currently Florida’s fifth largest bank. Known as Florida’s “Big Bank Alternative,” CNB is a subsidiary of Banco de Credito e Inversiones (one of Chile’s largest banks), but maintains autonomous decision-making authority. In June 2018, CNB acquired Miami-based TotalBank, a full-service community bank owned by Banco Santander, a global multi-national bank. CNB’s online division, TotalDirectBank, derives its name from that acquisition.

How the 12-Month CD Compares

When compared to similar length-of-term CDs tracked by DepositAccounts.com that are available nationwide and have minimum deposit requirements of $25k or less, one bank has a higher rate than currently offered on the TotalDirectBank 12-month CD. The following table compares the 12-month CD to the two highest-rate CDs from other banks and the two highest-rate CDs from credit unions.

To search for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.

The above information and rates are accurate as of 8/21/2023.