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Bank Deals Weekly Summary for December 30, 2006


This year ended with a bang for those looking for long-term CDs thanks to Pentagon Federal Credit Union (Penfed). Last Thursday, Penfed released its new rate of 6.25% APY for its CDs with terms of 3 to 7 years. This is about one percent higher than the best long term rates offered by most major banks (both online and brick-and-mortar). Long-term CD rates have slowly dropped for most of the second half of this year after the Fed stopped its rate hikes. No one can predict future rates, but many think we may see the Fed cut rates sometime next year. So this may be your last chance to lock in a six-percent-plus CD for several years. Please refer to my post for more info on Penfed and how to join.

Other than Penfed, this holiday season has been quiet for bank rate changes. The trend of falling long-term CD rates continues. In the last two weeks, CD rates have been cut at AmtrustDirect, ETrade, Corus Bank, VirtualBank, Ebank, La Jolla Bank and Transportation Alliance Bank. Most of the cuts have been in the long-term rates. There were a few exceptions. Countrywide Bank increased its 12 month CD rate from 5.10% to 5.20% APY. Also, Netbank increased its 6-month CD rate from 5.19% to 5.40% APY and its 12-month CD from 5.20% to 5.30% APY. Longer terms also had rate increases. If you're not already a Netbank customer, you can obtain an effective rate close to 6% on a 12-month term with a $15K deposit through Netbank's $100 bonus promotion which is still available (see post).

For savings accounts and money market accounts, rates are generally holding steady. OneUnited Bank increased the rate on its internet savings account from 5.25% to 5.30% APY. Unfortunately, it also raised its minimum deposit requirement from $10 to $1,000 (see post).

There remains some good deals at small local banks. Sometimes you'll find a small bank willing to open a CD by mail even if you live outside the state. Their policies on this often changes with time if they find they're unable to handle the demand. One of these small banks that is still accepting deposits by mail is Alpha Bank and Trust which is located near Atlanta, Georiga. Its current CD rates include a 6.00% APY 6-month CD, a 5.85% APY 12-month CD and 5.65% APY on all longer term CDs. (see post). Another small bank that seems to be still accepting deposits by mail is Garden City Bank located in Missouri. Its current CD rates include a 5.60% APY 13-month CD, a 5.64% APY 60-month CD and a 5.90% APY 72-month CD (see post). Thanks to the readers who have provided updates on the policies of these banks.

There remains many 6-percent-plus local CD deals. However, many are set to expire this month. I've tried to update my local CD list, but I likely have missed a few. If you see any that are out-of-date, your comments are appreciated.

Thanks to all who have helped by leaving comments or sending emails on rate updates. Sorry I can't post on all of your suggestions.

The rates listed below are based on Annual Percentage Yield (APY). No minimum balances are required unless noted. MMA next to the rates indicate a money market account. Most MMAs have check writing and ATM cards. Online savings accounts usually lack both of these. The top lists include banks and credit unions with broad availability and with minimums around $10K or less. Previous weekly summaries are available for Dec 23rd (short version), Dec 16th, Dec 9th, Dec 2nd, Nov 25th, Nov 18th, Nov 11th and Nov 4th.

As of December 30, 2006

Savings Accounts/Money Market Accounts:

3-Month Certificates of Deposit:

6-Month Certificates of Deposit:

9-Month Certificates of Deposit:

12-Month Certificates of Deposit:

18-Month Certificates of Deposit:

36-Month Certificate of Deposit:

48-Month Certificate of Deposit:

60-Month Certificate of Deposit:

84-Month Certificate of Deposit:

High Rates with Conditions - Open to All

Checking and Saving Accounts at Local Banks/Credit Unions

CD Specials at Local Credit Unions/Banks Over the Last Two Months

Terms of 60 Months and Over

Terms of 24 Months to Under 60 Months

Terms of 12 Months to Under 24 Months

Terms of Under 12 Months

Savings Account/CD Alternatives
Anonymous   |     |   Comment #1
NOBODY has said they are. But the PenFed offerings are not a slam dunk for depositors. Three years is an eternity in the world of CD investing. Longer terms are just nuts, given circumstances today. Remember to the extent you believe these rates attractive, they are precisely equally attractive to and for PenFed, but for opposite reasons.
Anonymous   |     |   Comment #2
Independence Bank of of Newport Beach has lowered the rate on their savings account from 5.25% to 5.05%.
Anonymous   |     |   Comment #3
Have you checked Millennium Bank? http://www.mlnbank.com
It's premium CD has high rates, but I don't know what's the diff. between their premium CD and tradistional CD.
Anonymous   |     |   Comment #4
Yes, we've all heard about Millenium Bank. It is not a US Bank. It is not insured by the FDIC or anyone else. It is located on a small Carribean island with very little government regulation.

Based on a statement on their web site, many people erroneously jump to the conclusion it is a Swiss bank. It is not Swiss and Swiss banking regualations and standards do not apply to it.

If you have some money you can afford to lose, go for it. But the interest rate premium they offer does not, in my opinion, adequately compensate for the added risk. If you want to risk your money, you can get much better returns in other investments.
Banking Guy
Banking Guy   |     |   Comment #5
Thanks for the good summary of Millennium Bank. I posted on this in October 2005. Please refer to that post for more info.
Anonymous   |     |   Comment #6
Patelco 8 month CD is gone.
Anonymous   |     |   Comment #7
I concur re Millennium Bank and the need for caution. This is a very popular forum for CD investors. But anyone is permitted to post comments here. That includes principals of Millennium Bank. FDIC or NCUA insurance has real value. Twice in my life I have had banks go belly up with my money inside - big accounts both times. I have never lost a cent. And the FDIC returned my deposits so fast I didn't lose much interest, either! The FDIC (or NCUA): you can't beat 'em with a big stick.
James   |     |   Comment #8
The Patelco 8-month CD is indeed gone: I opened one on the 30th and the CSR told me it was the last day of the offer.
Banking Guy
Banking Guy   |     |   Comment #9
Thanks for the note on Patelco's 8-month CD. Sorry to see it gone. A reader mentioned that a new CD promo should be starting tomorrow.