Update: This special CD has ended.
Institution for Savings is offering a CD special as part of a new-branch promotion. It's a very competitive CD with a 2.50% APY for a 40-month term. Minimum deposit is $500, and the maximum is $500,000. The special isn't listed on the bank's website. It was advertised in the Boston news. The ad is available online here. The special starts on 9/12/2011. There's no mention of how long it may last. A branch visit is required to open the account.
In June the bank was offering several competitive CD rates, but the rates went down quite a bit in August. The 3-year CD is the best deal with a 2.00% APY. This is listed at the bank's rates page as of 9/12/2011.
One downside to these long-term CDs is an early withdrawal penalty that's larger than average. According to the bank's CD page, the early withdrawal penalty for principal withdrawn is "Nine months interest whether earned or not on terms 25-47 months" and "Twelve months interest whether earned or not on terms longer than 48 months". At least they clearly describe the penalties on the website.
The bank still offers a reward checking account, but the rate has fallen considerably since I first reported on it in February 2008. At that time the rate was 6% APY on balances up to $50K. It fell to 1.50% APY last year, and it has just recently fallen to 1.01% APY (see account review).
Institution for Savings branches are located in the Massachusetts cities of Newburyport, Salisbury, Ipswich and Rowley.
The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 2.78% (excellent) based on June 2011 data. Please refer to our financial overview of Institution for Savings for more details. The bank was established in 1820, and it has been a FDIC member since 1985 (FDIC Certificate # 90250). Funds over the FDIC limit are insured by the Deposit Insurance Fund (DIF) which is a private insurance fund.
How the CD Rate Compares
A 40-month term is just 4 months over 3 years. The 2.50% APY is very competitive for a 3-year term. The best nationally available 3-year CD rate is 1.91% APY at Melrose Credit Union. The best 4-year CD rate is 2.45% APY ($25K minimum) at Alliant Credit Union ($25K minimum). Rates are accurate as of 9/12/2011.
Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.