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 26, 2011


Survey of the Best CD Rates for August 26, 2011

CD rates continue to trend downward as the ramifications of the Fed's mid-2013 pledge continue.

It seems like every other day Ally Bank is making small rate cuts. The 5-year CD APY just fell from 2.20% to 2.19% and the 11-month No-Penalty CD APY fell from 1.10% to 1.08%.

A few credit unions that make it easy to join also reduced rates this week. Self-Help Credit Union slashed most of its CD rates. Its rates are no longer near the top for any of the CD terms. Apple Federal Credit Union's 10-year CD APY fell from 3.50% to 3.20%.

We may see more credit union rate cuts next week since a new month is starting. Many credit unions make most of their rate changes at the start of each month. So if you were thinking about opening a CD, it would be a good idea to apply early next week.

The highest 5-year CD rate that's nationally available continues to be 2.83% APY at University Federal Credit Union. It's a web CD that must be opened online. 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. Don't forget you can get an extra 5 basis points if you're a AAA member. This week I compared Discover's 10-year CD with Ally's 5-year CD and did another review of the risks of these CDs in my post, Long-Term CD Strategy Review.

Local CD Rate Changes

There were also several rate cuts on local CD rates. It wasn't a CD, but it was just as good. Capital One Bank in the Austin metro area had been offering a 1.50% APY guaranteed for 12 months on its High Interest Free Checking Account. Since the rate was guaranteed for 12 months, it was better than a 1.50% liquid 12-month CD. Recently, this promo rate had fallen to 1.30% APY, and just this week it has fallen to 1.01% APY. It now matches Capital One's nationwide checking accout offer.

Another noteworthy rate cut was at Police and Fire Federal Credit Union (PFFCU) in Philadelphia. Its 5-year CD rate had held steady at 3.00% APY since last year. That changed this month when the rate started to fall. It's now 2.25% APY.

If you want some insights into how banks and credit unions decide on their deposit rates, PFFCU provided a good explanation early this year. Based on their explanation and the current Treasury yields, their new lower CD rates are to be expected. Here's an important excerpt from PFFCU's explanation:

We made investments in 2008 and 2009 that are earning 4%. As these investments mature in 2010 and 2011, we must re-invest this money in the same safe investments discussed above that are only earning 0.25% to 1.0%. Our deposit rates have to reflect what PFFCU can earn on its investment portfolio so that PFFCU remains financially sound.

Since yields on safe investments like Treasuries haven't gone up any since the start of the year (they have actually fallen), I'm afraid we will likely see more rate cuts.

I just added two banks to my list this week.

One is Marathon National Bank in the New York City metro area. It's offering a special 7-month liquid CD with a very competitive 1.35% APY.

The other addition is a 3-year CD from Broward Bank of Commerce in South Florida. The rate exceeds the best 3-year nationally available CD from a bank by 2 basis points. In Florida where competitive deposit rates are rare, that's a good deal.

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 26, 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
georgia   |     |   Comment #1
bank failure list ready? what a peach
KenBDG   |     |   Comment #3
There were no bank failures this Friday.

no stock 4 me
no stock 4 me   |     |   Comment #4
yeah yeah,so who gives a f wtf this dirt bag (Bewrnak) has to say at this point.,

QE3 is already in play, he already said all I need to hear, that the rates are going to be 0 till at least 2013 or more, so now I don't care anymore what the "posted" rates are for CD's.

This puke has single handed started to wipe out the savings people had to supplement what little SS they were getting at the same time the fkn inflation on the things that the BLS doesn't consider of course are up, and now all this BS to cut those "entitlements" those "rich" old ****s are getting. unbelievable and they wonder why nobody is spending anymore, well hell paying just food, elec and water bills is about it. no cell phone or high speed ISP for us "entitled" folks.

I hope the markeeet drops another 1000 tomorrow, and see how many more stocks Cramer says to buy to his lemmings and of course he's already sold the crap he was told by his insider buddies that was going down. As usual the fkn day traders are the ones that will make it hand over fist a nickel at a time up or down, sob's.

**** Rick, give me some hope, smirks
cd hunter
cd hunter   |     |   Comment #6
In reference to your post about the highest 5yr cd being University Federal Credit Union at 2.83%,  how come it is not included in the CD drop down box section 5 years ? Thanks KM
KenBDG   |     |   Comment #7
@cd hunter, good catch. I've fixed it so it now shows up as a nationally available CD.