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Doral Direct

Competitive One-Year CD Rate at Doral Bank Direct But Beware When the CD Matures


Doral Bank Direct has a very competitive 1-year CD with a 1.90% APY. Minimum deposit is $1,000. This rate and the other CD rates are listed in the bank's CD page as of 2/2/2010.

In my last post on this bank a reader mentioned the following about this bank:

I was told I had to send my CD back. Are you serious? Who sends an actual CD form? Since there is no way in the world I have the CD form, they are sending me an affidavit to sign to say I lost it. And even if I had the CD, they send you a check in the mail upon closing.

I emailed Doral for more details about their CD closure process. They do in fact require you to mail back the certificate. Here are the details that I received:

In order to close out your CD you must send us the original Certificate that was sent to you with your Welcome Package. Please sign at the bottom where it indicates "Endorsements". You have a 10 day (calendar days) grace period in which to send in your documentation so that we can process your request to close out the account.

This is the first time I've seen an internet bank require you to mail back a paper certificate. On the plus side, they can transfer the funds using ACH back to the account that was used to fund the CD. Here are those details that I received:

If you opened the account online we can send the funds via ACH to the original funding account on file. If you wish to do a wire transfer you must let us know in advance so that we can send to you the form. You would have to return the form back to us via mail and there would be a $25.00 fee in which you would incur. We can also send out a check to you for the funds if you wish.

For opening the CD I was told last year that "Once you submit your online application, the rate is locked in for the next 30 days."

Doral Direct's Savings Account used to have a competitive rate. This "high-yield" savings account is currently only paying a pathetic 0.50%.

Doral's first FAQ gives an overview of the bank:

Doral Bank Direct is an online banking product provided by Doral Bank, FSB (Doral Bank). Doral Bank is a wholly owned subsidiary of Doral Financial Corporation (NYSE:DRL), a diversified financial holding company with banking operations in the United States and Puerto Rico.

Doral Bank initiated operations in New York in 1999 as a FDIC-insured, federal savings bank emphasizing on bringing financial services to underserved communities, including the growing Hispanic community, currently the nation's largest minority.

Doral Bank, FSB is a FDIC member (FDIC Certificate # 34905).

As I mentioned in a previous post, Doral Financial Corporation had some financial problems in the past. However, Doral Bank, FSB has some respectable ratings for safety and soundness: 4 stars (sound) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 9/30/09 data. It should be noted that the other bank subsidiary of Doral Financial (Doral Bank based in Puerto Rico) has the lowest ratings at both BauerFinancial and Bankrate.com. There was a case last year when the FDIC closed not only the troubled banks of a bank holding company but also the relatively healthy ones. Refer to this FDIC press release for the details.


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Anonymous   |     |   Comment #1
I can confirm the same experience. My family closed three CDs recently and we had to send back the signed CD certificate. They deposited the money to our Doral Savings account and we just transferred to money to an external account. I encourage you to start on this a few weeks before the actual maturity date but no other big surprises otherwise.
Mocirne   |     |   Comment #2
Unless Doral Bank offers the best possible rate in a specific term, I won't do business with them.  It is ridiculous that you would have to retain the original certificate for 1-5 years and send it back to them.  What possible purpose would this serve?  Once I get done with the initial paperwork with a bank, I never want to use the archaic method of dropping letters into a mailbox again.
Anonymous   |     |   Comment #3
I had to go through the same process several years ago, at another bank, to redeem a CD at maturity.  Why they insist on a depositor sending back the original certificate, I don't understand.

However, I would strongly recommend to anybody sending original paperwork of any kind to a bank or any institution, MAKE PHOTO COPIES for your own records and reference.  And be sure to copy both sides if anything at all is printed on the back side.  Even if it's just a seemingly an insignificant number.  Should a question or problem arise, you then have proof.
Anonymous   |     |   Comment #4
If it's an online/direct bank, why not have them keep the certificate, and post it viewable online? The bank could also set it up to "endorse" online when the certificate matures. Skip the mailing to and fro.