High Yield Savings Account at Centennial Bank - Nationally Available


Update 11/26/09: The savings account is now listed at the bank's website. However, the rates have plummeted. The top rate is only 1.01% APY for balances over $100K.

Update 10/03/09: The savings account is no longer listed on the bank's website.

Update 7/28/09: Effective August 1st, the top rate will fall to 2.02% APY. Rate history is shown at the bottom of the post. Refer to the bank's website for the latest rates.

Centennial Bank is offering competitive rates on its tiered savings account. I was told the account is available nationwide, but they don't offer services that you expect from an internet bank (I describe these details below.) As of 2/23/09, the rates are as high as 3.30% APY for balances of $100K and over. Minimum deposit is $500. There's no monthly fee, but no interest is earned for balances under $500. Below are the rate tiers as listed in the bank's savings account page as of 2/23/09:

Balance Rate APY
$500 - $9,999 2.25% 2.28%
$10,000 - $24,999 2.50% 2.53%
$25,000 - $49,999 2.75% 2.79%
$50,000 - $99,999 3.00% 3.05%
$100,000+ 3.25% 3.30%

There are a few more details listed in the account disclosure (pdf). Some of the important ones include:
  • limit of 4 free withdrawals per month, $5 fee for 5th and 6th withdrawal
  • Withdrawals are limited to 6 per month (as required by Fed regulations)
  • Interest compounded on a daily basis, credited on monthly basis
  • When account is closed, you will receive accrued interest to the date you close account

I called their toll-free number (800-251-0705) today, and I was informed of the following features. I highlighted two of the most problematic features.
  • Available to people in any state
  • Application must be mailed in. Initial funding can be done by check or wire transfer
  • Rate can change at any time
  • No monthly fees
  • No interest is earned for balances under $500
  • No internet access
  • Can be funded by check or wire transfer
  • After it's opened, withdrawal requests must be made in writing (mail or fax)
  • No ACH capability
  • According to CSR, ACH transfer initiated from another bank is not an option
  • Withdrawals can be done by wire transfers ($35 fee)
If you want easy access to your money, this is probably not the account for you. They do have a long history of competitive rates. I first posted on this account almost 3 years ago. From the reviews on this old 2006 FW thread, you can see their account features haven't changed much except that the cost of outgoing wire transfers have gone up.

Centennial is a small, one-office bank based in Fountain Valley, California. From 9/30/08 FDIC data, it has 27 employees, $872.9 million in assets and $708.5 million in deposits.

It has some strong ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 4 stars (sound) at Bankrate.com. Both ratings are based on 9/30/08 financial data. It has been FDIC insured since 1989 (FDIC Certificate # 32707).

Thanks to the reader who mentioned this account in the Daily News and Deals Post.

Rate History (APY):
08/01/09: 1.01% $500-10K, 1.26% $10K-25K, 1.51% $25K-50K, 1.77% $50K-100K, 2.02% $100K+
07/01/09: 1.26% $500-10K, 1.51% $10K-25K, 1.77% $25K-50K, 2.02% $50K-100K, 2.28% $100K+
05/01/09: 1.77% $500-10K, 2.02% $10K-25K, 2.28% $25K-50K, 2.53% $50K-100K, 2.79% $100K+
02/23/09: 2.28% $500-10K, 2.53% $10K-25K, 2.79% $25K-50K, 3.05% $50K-100K, 3.30% $100K+
Related Pages: savings account

Sofa King Frustrated
  |     |   Comment #1
Thank you very much, Banking Guy, for the detailed report.

Wow! No Internet access and no ACH access. Deal-breaker for a lot of people, I am sure.
  |     |   Comment #2
This is a small local bank, and it does not have the features of an Internet bank. If you are local, (Huntington Beach, Fountain Valley, Costa Mesa) however, they have good rates for a "daily-money" savings account, and very friendly staff.

They always know me by name when I walk in the door. Try to get that from your local WAMU branch.
  |     |   Comment #3
I have accounts at Centennial Bank. Some time ago the tiered Savings Account rate went south and I closed out the account. Since then, the Index the account relates to has dropped to way low, and the default floor of 3% has become operational. The $50-99.9K tier is a base rate of 3%, with the highest tier of $100K+ at 3.25% base rate.

For background, this CA institution years ago was formerly a thrift & loan that obtained FDIC insurance (formerly has CA State Deposit Insurance Fund-now discontinued). It is owned by a Title Insurance company and has a very large US Gov't securities portfolio, that seems to be used as collateral for mega sized title insurance deposits (for escrows).

The staff at this one-branch bank do also know me, my family and a couple of close friends by name also.

One advantage of this Bank is that they have an account application on line (which you can form-fill out and print out and mail/take to the Bank), including a Trust vesting application. The Individual application has ability for you to note either a POD, ITF or beneficiary, and up to 3 of them per account. They are sticklers for ID (copy of driver's license or passport).

This is one of the best rates in So CA that I know for Savings accounts, just no internet ability to add/withdraw. They do give post-paid business reply envelopes that have deposit/withdrawal slips attached. Probably best account for those who expect to do very few transactions.

Oh, they do render quarterly paper statements.

OC Steve
  |     |   Comment #4
Thanks, OCSteve, for your comments.

I live in The O.C., as well, and I am fairly close to Fountain Valley.

But the fact that this bank has no Online Access to even check one's balance would give me pause. Of course, if every other bank went down into the 2%'s and this bank continued to offer 3.25%, I might change my mind.

But then again, the fact that you can only withdrawal your money during business hours (they don't offer checking accounts), would be a huge negative to ponder.
  |     |   Comment #5
To Michael:

I don't disagree with your comments either, but sometimes when Banks want to stabilize their funding sources, they limit offers to "in-state" or local people, and by further making account access more difficult (most probablyby accident because they are a SMALL Bank) they assure most won't take their funds out all at once. Offering a little more yield under these circumstances, with the ability as a depositor to let the money stay there for awhile, why not take advantage of their higher rates?

I have studied this institution's rate for several years and just recently they lowered their 5 year and all CD rates to be lower than the Savings account rate at the top $100K tier of 3.25% base.

We also need to remember that this is truly a small S&L and the majority owner (a title insurance company) is really just looking for a convenience to handle their escrows. The staff at this bank in the Savings branch is limited to maybe 5-7 people tops. The rest of the staff is not all that impressive that I have seen.

They have been recently switching their investment portfolio away from US Gov't. securities to Fed Funds sold (overnight unsecured bank-to-bank lending). The level of Fed Funds sold at a recent call report date (12/31/08) was something like $120 million. In case you don't know, Fed funds are currently yielding about 0.50-0.75%. so they are not making any money on incremental deposits paying 3.25%.

They have a fairly good level of commercial real estate loans (no sub-prime mortgage loans), so as long as they pay, it's all a go!

I would agree with Banking Guy in that I would respect the FDIC $250K insurance limit with this or any bank/s&l/CU. Higher insurance available for living trusts/POD/ITF/Joint accounts, etc.

Just my 2 cents on Centennial Bank.

OC Steve
  |     |   Comment #6
Thanks, OCSteve. Well articulated.

With Alliant CU going into the 2% range next month, if Centennial keeps their 3.25% rate, I might open an account.

I just wish this bank allowed ACH transfers initiated at an outside bank.
  |     |   Comment #7
When I downloaded the Account Disclosure from their web site, I was a little concerned after reading the section titled "Additional Terms Applicable to Certificate of Deposit and Savings Accounts." For example, section 2 states that "no money will be received or paid by the Bank with respect to any Certificate or Savings Account unless the original of such Certificate or Savings Account is presented...." I asked the CSR with whom I spoke if that meant there was a passbook for the Savings Account, and she said no. She said the inclusion of "Savings Account" in that section was a mistake, that the section applied only to a Certificate of Deposit. This kind of thing makes me a little edgy.
  |     |   Comment #8
Did you ask the CSR if this bank intended to allow ACH deposits and withdrawals initiated from an external bank anytime soon? (What a rip off that they would charge $35 for a wire transfer!)
  |     |   Comment #9
just spoke to CSR at the bank today..... they said the rate is likely going to be going down in May but couldn't say to what rate....
  |     |   Comment #10

I have the tiered Savings Account product at Centennial Bank in Fountain Valley, CA. Recently I received an Annual Account Disclosure and guess what--the index rate was explained again as relating to the 13 week T-Bill rate and the tier pricing was explained, but NO MINIMUM BASE INTEREST RATE DEFAULT was indicated (previously was 3% for $50-99K tier). It appears that the Bank is giving 30 days notice that the rate will change (per CSR-effective 5/1/09--"see web site for the new rate then").

When I pushed harder to understand what the rate will become, they stated the Bank has not yet figured out their rate strategy. Just in case you don't know, the 13-week T-Bill rate is way low (under 1%).

I hope the Bank is careful in setting their Savings Account rate at something near market or else MUCH money will roll out of their Bank. Not sure how liquid they are at this time.

This Bank's management is unknown to me and seems to be rather odd in not communicating their rate strategy to the Savings branch staff who will have to potentially take alot of mad customer calls.

We will have to wait until around 5/1/09 to see what develops.

OC Steve
  |     |   Comment #11
The reader who posted the previous comment was exactly right. Rates have dropped to 2.53% and 2.79% respectively.
  |     |   Comment #12
As expected, rate for June just dropped again, but still one of the best rates nationally to keep some liquid money on hand. I'm several states away and have used this bank for 3 or 4 years for a business account- no problems at all. I don't need instant access like some, but they will wire or (mail a check for free) when you ask. The safety ratings and interest rate is king with me, and these guys seem to keep it near the top.

My two cents...
  |     |   Comment #13
Centennial dropping another quarter percent. Now APY of 2.28% for $100G+.
  |     |   Comment #14
Rates down again effective August 1. Top yield (for $100K+) will be 2.02%.
  |     |   Comment #15
APY for $100K+ has plunged to 1.51% effective today.

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