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 22, 2011


Survey of the Best CD Rates for July 22, 2011
Most of the CD rates on my list of top rates held this week. One nice change for the best nationally available CDs is the rate increase at Bank of Internet. Its 6-month CD rate increased to 1.15% APY and its 12-month CD increased to 1.33% APY. That puts BofI in the lead for both the under-1-year and 1-year categories.

Connexus Credit Union still has a big lead over Bank of Internet for the 6-month and 12-month terms but I consider Connexus' CDs a little different since these require an active checking account. Also a little different is Ally Bank's CD. Its 2.33% APY 5-year CD has a lead over Connexus' CDs when you take into account the post-penalty yields when the CDs are closed at 6 and 12 months.

For terms longer than 12 months, iGObanking's CD beats Ally on this long-term CD strategy. However, you have to be braver since this requires a 10-year iGObanking CD. This 10-year CD has a 3.50% APY and an early withdrawal penalty of only 6 months of interest. This is larger than Ally's 2-month interest EWP, but the higher rate becomes more important than the small EWP for closures after 1 year. I did a comparison of these CDs and discussed the risks of this long-term CD strategy in my iGObanking vs Ally CD review.

Local CD Rate Changes

One addition in the short-term CD list is not a CD, but you can consider it a CD when you're looking for a CD. It's a money market account from Dime Savings Bank. The reason why it's on the CD list is that Dime is having a promotion for new customers which guarantees 1.75% APY for 6 months. This gives the money market account the benefit of a CD rate lock. This used to be a nationwide deal, but it's now limited to New York State residents. I have more details about this deal in my Dime Savings money market promotion review.

Another liquid account in my short-term CD list is Capital One Bank. It has been heavily advertising its checking account special for new customers in the Austin metro area. The rate is 1.50% APY guaranteed for 12 months after the account is opened. Back in 2007 they had a similar deal but the APY was 5.00%. They must be hungry to increase their market share in Austin.

One other note on the short-term CDs, the 1.50% APY 15-month CD special at State Bank of India (California) is scheduled to end July 31st. So next week will be the last week. It's available to many residents through out California and in Washington DC.

For the longer-term CDs, the only changes were a few rate cuts. The rates on CD specials were cut at University of Iowa Community Credit Union and Vermont Federal Credit Union.

There's now only one 3.00% CD for terms under 5 years (3.00% APY 4-year CD at UniBank in MA). There continues to be a few 5-year CDs around the country with a 3.00% APY, but these are rare. I have two 5-year CDs with rates over 3.00%, but they're not available to many people.

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. The Friday blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The Friday blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but most 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.

Yields Accurate as of 7/22/2011

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) 541-day 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
probably best to go with the long term cds.  Doesnt look like Bernanke is going to do anything with rates in the next couple of years.  An interest rate spike might occur if the government defaults...
Bozo   |     |   Comment #2
To: Anon # 1

As a general rule, if your CDs are laddered, it's always best to replace long with long. If you try to time the CD market, you can wait a long, long, time waiting to see if you guessed right. General rule: if your long CD replacement rate is near that of the prevailing rate on a 7 year Treasury, go for it. These days, it seems as if CDs are besting the 7 year, by roughly 50 basis points. The 7 is at 2.26 and I can get 50 bp over that at PenFed. If you're nervous about a rate spike, go short the long Treasuries.

Just my $.02.


Bozo   |     |   Comment #3
PS: Alternatively, you could go with bond funds, but I met resistance suggesting that several days ago. Bond funds, having a built-in ladder, benefit from historically higher yields. However, that ladder works to their detriment when rates rise, and principal values fall. Candidly, I'd go with the best CD you can, at the highest rate for the longest term, and not look back. It's all about preservation of capital, with a modest return. I'm too old (and too cranky) to trust my portfolio to another 2008 meltdown. I'm worried about inflation, but I'm more worried about capital preservation. I can live with 3% shrinkage. I cannot abide 30, 40, or 50% losses. Hence my (ultra) conservative asset allocation. I managed to hold tight in 2008 - 2009, and was lucky enough to see our retirement funds snap back nicely, but I don't want to go through that again. Ever.

Anonymous   |     |   Comment #4