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5.00% 60-Month CD at a California Bank (Kaiser Federal).


Update 7/12/08: The CD special has ended. Please see the bank's website for the latest rates and specials.

Kaiser Federal Bank is offering a special 5.00% APY 60-month certificate of deposit. The minimum deposit is $10,000. It's also available in an IRA. There are also two other CD specials that are not quite as competitive. These include a 3.80% APY 24-month CD and a 3.60% APY 10-month CD. Please see their rate table (pdf) for more details.

I just called and confirmed that these rates are still available. I was told that the rates could change any day. The CD can be opened by mail. They can send you the forms. You'll then have to send them back with copies of your ID. The CSR said they won't lock the rate until they receive the forms in the mail. In addition to a check, they accept wire transfers, but there's an incoming wire transfer fee of $10.

According to the disclosure, the early withdrawal penalty is 180 days of interest for terms of over one year. Terms of one year or less have a 90 day penalty. The CSR had informed me that it was 90 days for all terms, so you may want to verify if this disclosure is still valid.

There's a 7-day grace period when the CD matures. The outbound wire transfer fee is $25.

Branches are located in the California cities of Bellflower, Covina, Fontana, Harbor City, Los Angeles, Panorama City, Pasadena and Santa Clara.

The bank was established in 1953, but has been FDIC insured since 1999 (FDIC Certificate # 35448). The bank has a 3 star rating (performing) at Bankrate.com based on 12/31/07 data. This is down from 4 stars when I reported on this bank in October 2006. The bank has a 5 star rating (excellent) at BauerFinancial based on 3/31/08 data. According to the bank's page, this is the 61st consecutive quarter that the bank has received 5 stars from BauerFinancial. I'm not sure what accounts for the discrepancy between the two ratings.

Related Pages: CD rates, IRA rates

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Anonymous   |     |   Comment #1
Kaiser Federal is one of the banks that allow those over 70 1/2 years of age to put IRA funds into the 5 year account thereby getting the 5% rate and removed it whenever without any penalities.

They do charge a fee of about $20.to close the entire CD.If you leave the minimum of $10,000.there are no closing fees. The problem I have had is the rate is usually very low so I absorb the cost of closing it.

Wachovia is another bank that has this program. If anyone is aware of any others let us know. Provided the rate at 5 years is much higher than the others which sometimes is not the case.

I review this blog everyday just for the information as well as on going rates.

Thanks Banking Guy you make this seniors investments easier to handle.
Anonymous   |     |   Comment #2
It's me again I wrote the above post and found out at Kaiser Federal Bank that although it isn't in their disclosure brochure they wave any penalties on removing IRA funds before the maturity date on those 59 1/2 or older.

While Wachovia does this for those 70 1/2 years of age.

Hope this helps those looking for a higher rate without locking in for 5 years.