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Bump-Up Bank CDs: Compass vs. CapitalOne


Compass Bank has some decent rates on their Option Certificates of Deposits. You sacrifice a little on the interest rates but are rewarded by being allowed to bump up if rates rise without restarting your term or paying a penalty. The 2-year CD allows one bump-up and one additional deposit. The 3, 4 and 5 year CDs allow two bump-ups and two additional deposits. Here are the current rates (for Texas):

24 Month 4.306% 4.40%
36 Month 4.497% 4.60%
48 Month 4.545% 4.65%
60 Month 4.593% 4.70%

These rates are only about 0.10% under the current rates of Compass Bank's special fixed-term CDs (for Texas).

The one concern I have with these types of CDs is whether the rates will keep pace with the other CDs. Looking at recent history, Compass is doing a good job at this. When I last posted about these CDs, the 3-to-5 year CDs have gone up by 0.45%. So those who purchased one of these CDs will have the opportunity to take advantage of the bump feature.

On the other hand, those who purchased a No Regrets CD from CapitalOne may be a disappointed. The current 3, 4 and 5 year rates are only 3.74%, 3.86%, and 4.00% APY. The interest rates on these No Regrets CDs haven't kept up. On July of last year, the PFBlog reported on these CDs. The 5-year CD rate was actually 0.33% higher than now. This has to be very frustrating for those who purchased this CD back then when you consider how much rates have risen in the last 15 months. The 4-year rate back then is about what it is now. The 3-year CD is 0.44% higher now.

Not only does CapitalOne No Regrets CDs have low rates, it also only allows one bump-up rather than two. So Compass Bank definitely has the better deal.
CreditUser (anonymous)   |     |   Comment #1
I like these banks :) It would be better, if they might issue credit cards with such low rates.