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Update on Mutual Bank's 5.75% 12-Month CD


Update 10/19/07: The 5.75% yield had ended. The new 12-month CD yield is 5.00% APY.

Mutual Bank continues to offer the special 12-month CD with a yield of 5.75% APY. The minimum deposit is $2,500. Since my Thursday's post on this offer, I've received more info from Mutual Bank about details of their CDs. The main downside is that they require written instructions if you want to close the CD at maturity. Below is my new list of features for Mutual Bank's CDs:
  • 5.75% APY 12-month term as of 10/15/07
  • $2,500 minimum deposit
  • compounded and credited monthly
  • available as a regular or IRA CD
  • can be opened by mail from any state
  • rate will be guaranteed from date of postmark
  • No hard credit pull for CDs
  • 10 grace period after the CD matures in which you can withdraw without penalty
  • 90 day early withdrawal penalty for all terms
  • If you decide not to renew at maturity, you need to request in writing by mail or fax
  • At maturity, funds can be sent by cashier's check at no charge or by wire transfer for a $25 fee or transfered into your Mutual Bank money market or checking account.
  • Online banking can be setup at the Mutual Bank website after the account is opened.
  • Application info available at this Mutual Bank page

I was told of one useful feature of this CD regarding early withdrawals which gives you more flexibility for the cases when you need some of the money that's locked into the CD. Mutual Bank allows interest to be withdrawn any time after it's posted without penalty. In addition, the penalty is only assessed on the amount of principal withdrawn. So if you have a principal of $30K in a CD and you need $10K, you're allowed to withdraw only the $10K, and the penalty would apply only to that $10K. The rest of the $20K principal would continue to earn the same interest in the CD. I've also seen this at other banks, but some banks do not allow this kind of partial withdrawal.

In addition to opening the CD by mail, you can open at one of Mutual Bank's branches. They've recently expanded outside of the Chicago metro area to Staten Island, New York; Edison, New Jersey; and Houston, Texas.

Mutual Bank is FDIC insured (Certificate # 18659).

Related Pages: CD rates, IRA rates

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Anonymous   |     |   Comment #1
You forgot to add that they are one of the few banks that can prohibit an early withdrawel at their discretion. Most banks must allow it if you pay the penalty. For this reason alone, I passed on their CD. You should mention this in your blog. I could see that if they were having financial problems, they might disallow an early withdrawel. I think bankrate.com downgraded them to 2 stars.
A. Kathisia
A. Kathisia (anonymous)   |     |   Comment #2
Thanks for all the work you put into the blog. I appreciate the details and the work it must take to keep things up to date.
Anonymous   |     |   Comment #3
Does anyone know if they have a grace period like Countrywide (e.g., where you can add $ to the principal for the first 30 days)? Any more information would be appreciated. Customer service is difficult to get a hold of as I imagine they are quite busy. Thanks!
Anonymous   |     |   Comment #4
Please help. I’m a freshman in college and relatively new to investing. I’m considering putting my money into a 3-month internet CD. I have a question regarding the Annual Percentage Yield. If say for example I put $10,000 into an a 3-month CD with a 5.50% APY and after 3 months it matures, if I choose not to renew and take my money out then, will I get a gain of +5.50% on my $10,000 to $10,550 or would I have to renew the 3-month CD four times to get the +5.50% gain? Any helpful insight is greatly appreciated.
ShraZZy (anonymous)   |     |   Comment #5
You should look at the rate %. APY means in a given year and with interest compounded.

You would make about $131 in 3 month

USe this calculator: http://www.bankrate.com/brm/calc/cdc/CertDeposit.asp
Nancy (anonymous)   |     |   Comment #6
thanks for this nice post. I had something to discuss with you. Please let me know when it will be possible for you. you can write to me at nancy@debtconsolidationcare.com
I will wait for your reply.
CD Rates
CD Rates (anonymous)   |     |   Comment #7
As to not allowing an early withdrawel, many bank disclosures have language to that effect. We've helped many clients close CDs early. Rarely does a bank prohibit it.

However, look at it from the bank's perspective, if rates rise and you are basically jumping ship to find better rates, their cost of funds will go up.

Very few banks would disallow an early withdrawal if the funds were truly needed.

Jumbo CD Investments
pfodyssey (anonymous)   |     |   Comment #8
Based upon bankrate.com's ratings, this bank does not seem to be performing well:

CAEL = 4 (5 is lowest)
Star rating = 2(1 is lowest)

Should I even care?
Anonymous   |     |   Comment #9
Regarding "Does anyone know if they have a grace period like Countrywide (e.g., where you can add $ to the principal for the first 30 days)?"

We called and asked about this and they said no.
Anonymous   |     |   Comment #10
Their CSR advised me that today is the last day for the 5.75% special. All new accoutns must be postmarked today to get the rate.

Mark Bregman
Anonymous   |     |   Comment #11
They just lowered the rate today on the 12 month CD.