About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Survey of the Best CD Rates for July 15, 2011


Survey of the Best CD Rates for July 15, 2011

I've decided to split my weekly bank deals recap into two posts. A few months ago I started Friday posts to focus on the best local CD rates. I included a few of the best nationally available CDs with each CD term so readers could compare their local deals with the best nationwide deals.

My bank deal recaps on Saturdays primarily focused on nationally available bank accounts. Last year I started to include a few local CD deals, but it was making the post too big and it was taking too long. So that's why I started the local CD surveys on Fridays.

Since I was listing and discussing the top nationally available CDs in the Friday CD posts, my Saturday CD lists and discussions were becoming redundant.

So I've decided that the Friday local CD survey would turn into a survey of the best CD rates for both nationally available CDs and local CDs. My Saturday reviews will focus on a recap of banking news, savings accounts and reward checking accounts.

For nationally available CDs, my Friday lists will be smaller. I plan to include one or two standard CDs. By standard I mean it doesn't have checking requirements and it doesn't depend on early withdrawals. I'll include a few others that can be good deals due to small early withdrawal penalties and other features that are not apparent in the rate tables.

For standard CDs, our CD rate tables and IRA CD rate tables provide the best way to review the top rates.

As I described in my rate table overview, you can use our CD rate tables to find the best local CD rates. The Friday blog posts are intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but many of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available for an entire state.

Nationally Available CD Rate Changes

There were a few rate cuts this week for the nationally available CDs. The small Quaint Oak Bank that allows CDs to be opened by mail reduced its 4-year and 5-year CD rates. Another bank has replaced Quaint Oak as the lead bank for these two terms. It's the new internet division of MainStreet Bank, a small Virginia bank. Its 4-year CD rate of 2.50% APY is even better than the easy-to-join credit unions.

Another nationally available bank had a rate change this week. iGObanking reduced its 7-year CD rate from 3.10% to 3.00% APY. However, its 10-year CD rate remains at 3.50% APY which is the best CD rate that's available nationwide. The main concern is the very long 10-year term. No one wants to be stuck in a long-term CD when rates rise, and surely they will rise at some point in the next 10 years. Hopefully...

One nice feature of iGObanking's long-term CD is an early withdrawal penalty of only 6 months of interest. The same strategy that we've discussed with Ally Bank can be applied to iGObanking's 10-year CD. The penalty may be 3x that of Ally's penalty, but the 10-year CD rate is over one percentage point higher than Ally's 5-year CD rate. When you do the math, this makes the iGObanking 10-year CD a better deal than Ally's 5-year CD when the CDs are closed early after 18 months and later. Of course this strategy depends on the bank honoring early withdrawals and the early withdrawal penalty through the term of the CD. I did a comparison of these CDs and discussed the risks of this strategy in my iGObanking vs Ally CD review.

Local CD Rate Changes

Most of the changes this week were additions. Some of these should have been on the lists before. One is Police & Fire Federal Credit Union in Philadelphia. Its CD rates have remained the same since my January review, and that includes a 2.50% APY 4-year CD and a 3.00% APY 5-year CD. As I described in January, anyone in Pennsylvania can join.

I also added to the list two small banks that are in major metro areas. One is Borrego Springs Bank, N.A. which has branches in Southern California with branches near San Diego. It's offering a 1.50% APY Jumbo CD for terms of 18 to 23 months. The other one is Chasewood Bank in Houston, Texas. It has long offered several competitive CD rates with terms of two years and under.

Finally, I've been searching for good CD deals in Florida, but they have been hard to find. It's not a great rate, but for those who prefer to open a CD at a local office, Third Federal has a fairly competitive 6-year CD rate of 2.50% APY. They have several branches in both Southeast and Southwest Florida. They also have branches in Ohio.

Yields Accurate as of 7/15/2011

Under 1-Year CD Rates

  • Noteworthy Local Deals

1-Year CD Rates

  • Noteworthy Local Deals

18-month CD Rates

  • Noteworthy Local Deals
  • Focus Bank - 1.61% 19-month CD (online application for MO, AR, KY, TN & parts of IL)
  • First Choice Bank - 1.60% ($50K) 1.50% ($2.5K) 18-month CD (Los Angeles & Orange County, CA)
  • Alaska USA Federal Credit Union - 1.60% ($100K) 1.40% ($10K) 18-month CD (San Bernardino County, CA; parts of WA & AK)
  • Industrial Credit Union - 1.60% 18-month CD (Boston metro area)
  • Chasewood Bank - 1.51% ($100K) 1.41% ($1K) 18-month CD (Houston)
  • Borrego Springs Bank - 1.50% ($100K) 18-month CD (San Diego)

2-Year CD Rates

  • Noteworthy Local Deals

3-Year CD Rates

  • Noteworthy Local Deals

4-Year CD Rates

  • Noteworthy Local Deals

5-Year CD Rates

  • Noteworthy Local Deals

Over 5-Year CD Rates

  • Noteworthy Local Deals
Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.
Related Pages: CD rates
Anonymous   |     |   Comment #1
Ally Bank - 1.13% 11-month No-Penalty CD, you already paid the penalty upfront by loosing close to 0.5%

in interest payments alone.
Rosedala   |     |   Comment #3
To Commenter #2, also you can get restaurant coupons here:  www.restaurant.com.  I already used their $25 coupons and am satisfied...  :)

Ken, about this:  "Ally Bank - 1.94% (2.33% 5-year CD closed after 1 year, see review & risks)"  did I understand correctly I think I didn't) that 1.94% is for one year?  Their site shows this rate for 4 years.  Thanks.  Rosedala
Anonymous   |     |   Comment #4
Instead of No-Penalty CD, it should be called: Peanlty already paid upfront.
KenBDG   |     |   Comment #5
@Rosedala, Yes, that 1.94% is the 1-year yield after the earlfy withdrawal penalty of Ally's 5-year CD.

Here's an example to understand the post-penalty yield. Let's say you close the Ally 5-year CD after 4 months from when you opened it. Due to the 2-month early withdrawal penalty, you lose half of the interest. So to calculate the new 4-month yield, you reduce the 5-year yield of 2.33% by half which is 1.165%.
Anonymous   |     |   Comment #6
You show Alma Bank one year cd at 1.35% but when I go to their website it shows 1.00%

and they don't describe early withdrawal penalty. Very little info on their website. I pass by an Alma branch

on my drive to work, but parking seems to be a problem at this branch.
KenBDG   |     |   Comment #7
Here's the Alma Bank rates page that shows the 1.35% 1-year Liquid CD, and here's my review of that CD. The ad that I reference in that post is no longer available online.