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 August 19, 2011


Survey of the Best CD Rates for August 19, 2011

This was another week with a large number of rate cuts. The Fed's mid-2013 pledge is definitely having an effect on bank rates, and the effect appears greater than the Fed's past quantitative easing initiatives.

Some of the nationally available banks and credit unions that cut rates this week include Ally Bank, Incredible Bank, Dime Savings Bank and Connexus Credit Union.

It seems like every other day, Ally is making some small rate cuts. Its 5-year CD APY fell this week from 2.26% to 2.20%.

Like iGObanking last week, Dime Savings Bank slashed its long-term CD rates. Dime's 7-year CD APY fell from 3.00% to 2.00%. It also ended its special 10-month CD.

Incredible Bank cut the rates of all three of its short-term CDs by 10 to 20 basis points.

Finally, Connexus Credit Union has finally stopped offering its 3.00% APY 5-year CD. It's now 2.50% APY. The two short-term CD rates also fell. The 6-month and 1-year CD APYs are now 1.25% and 1.50%. These are still competitive, but like before these require an active Connexus checking account.

The highest 5-year CD rate that's nationally available is now 2.83% APY at University Federal Credit Union. It's a web CD that must be opened online. Its early withdrawal penalty is up to 6 months of interest. Due to the lower Ally 5-year CD rate, this UFCU 5-year CD has the lead over Ally for terms of 2 to 5 years. For more info on UFCU and membership eligibility, please refer to my UFCU CD review.

Ten years is a very long time, but that's now required if you want a 3.00% APY. Discover Bank is still offering a 3.00% APY 10-year CD and IRA CD, and its early withdrawal penalty is 9 months of interest. That puts it above Ally Bank's 5-year CD when closed after 2 years.

It's important to note that there are some risks with this long-term CD strategy. If rates shoot up, you could be stuck in the low-rate CD until it matures. I have more discussion of these risks in my post on the risks and benefits of long-term CDs. Even though I've received some assurances that the early withdrawal penalties won't be increased on existing CDs, I can't guarantee it won't happen.

It's also important to remember that there's a risk that this awful interest rate environment will continue for many years. Long-term CDs have an advantage for that risk.

Local CD Rate Changes

There were also many cuts on local CD rates. Some of the banks and credit unions which cut rates this week include Industrial Credit Union, Beacon Federal Bank and San Antonio Credit Union (SACU). SACU had the only CD with over a 4.00% APY, but that ended yesterday when it reduced its 10-year CD APY for a $90K deposit from 4.09% to 3.85%.

On the plus side, several banks and credit unions held their rates steady. Some of the noteworthy ones include Signature Bank in NYC, Wings Financial Credit Union, Alaska USA FCU with branches in WA and CA in addition to AK, and Security Service FCU with branches in TX and CO.

I also added two new credit unions to the list. Texas Dow Employees Credit Union continues to offer a 3.00% APY 5-year CD (3.25% APY for a $100K deposit). Membership is open to people who live, work or worship in parts of the Houston metro area (see post). The other addition is Teachers Credit Union in Indiana. It's currently offering a special 71-month CD with a 3.05% APY (see post).

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 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 in large areas of a state.

Yields Accurate as of Aug 19, 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)
  • Signature Bank - 1.51% 18-month CD (NYC Metro)
  • Chasewood Bank - 1.51% ($100K) 1.41% ($1K) 18-month CD (Houston)
  • Industrial Credit Union - 1.50% 18-month CD (Boston metro area)

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
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