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 December 10, 2011


Survey of the Best CD Rates for December 10, 2011

Most of the nationally available CD rate leaders on my list kept rates unchanged this week. The one exception was for the group of CDs with terms under one year. Virtual Bank took over the top spot for the highest 6-month bank CD rate from OneWest Bank which cut its rate from 0.85% to 0.75%. Ally Bank also made a slight cut. Its 11-month No Penalty CD rate yield fell from 0.96% to 0.95%. You can get a little higher rate with Atlantic Coast Bank's special 7-month CD which remains at 1.00% APY. However, as I described on Thursday, Ally Bank's 11-month No Penalty CD is the best deal since it gives you the flexibility to make the CD have any term you want from 7 days to 11 months. In my Thursday post, I described my experience of opening and closing this CD.

As you can see by the rates of these short-term CDs, they are very low in this awful interest rate environment. One strategy to consider is to go long with CDs from banks and credit unions that offer small early withdrawal penalties. Not only will the yields be much higher if you maintain the CDs until maturity, but the effective yields will often be higher than short-term CD yields if you redeem the long-term CDs early. This week I reviewed this strategy for four long-term CDs in my post Comparing the Best CD Rates After Early Withdrawal Penalties. As I mentioned in this post, there are some risks if you plan to close these CDs early.

Local CD Deals

There were a few local rate leaders that had rate cuts this week. Wings Financial Credit Union and HAPO Community Credit Union in Washington State reduced rates on all of their CD terms. Third Federal fell off my list this week. Its 6-year CD yield fell from 2.05% to 1.85%.

One addition to the list this week is the 5-year CD from Washington Federal. Its rate is not the best (2.30% APY for $90K and 2.25% APY for $1K). However, it has branches in several western states including Nevada, Arizona, Utah, Oregon and Washington State.

Last week El Paso Employees Federal Credit Union made some surprise rate increases, but it reversed itself this week with rate cuts. Its 5-year CD was notable due to its 3.29% APY which was the best rate in the nation. It's now down to 3.03% APY. Its local competitor, El Paso Area Teachers FCU now has the 5-year CD rate top spot with a 3.08% APY 5-year CD. Both of these credit unions are open to anyone who lives or works in El Paso County in Texas. There are a few other small credit unions in the nation with higher rates, but they didn't make my list since they're not available to enough people. You can see if you're lucky with one of these credit unions in your area by using our rate table. Make sure it shows rates from your state by using the "Filter Accounts" button at the top of the table.

The highest CD rate in the nation now goes to San Antonio Federal Credit Union (SACU) which raised its 10-year CD yield this week from 3.20% APY to 3.30% APY for a $90K minimum (3.25% APY for $10K). This is the second week in a row that SACU raised the 10-year CD rate.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest penalty, it's still a good deal when closed early even with the recent rate cuts.

Since the early withdrawal penalty of Digital Credit Union and Velocity Credit Union is only 6 months of interest, this makes their 5-year CDs a good deal for short terms. Ally Bank's 1.84% 5-year CD is still the best deal for 6 and 12 months. However, Digital's 2.61% APY 5-year CD (2.86% with relationship checking) becomes a better deal when it's closed at 18 months or later.

As we learned last month, there is some risk that the bank or credit union may increase the early withdrawal penalty on existing CDs (see my post on a credit union that was allowed to raise the EWP on existing CDs).

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. This CD survey 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 CD survey 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 in large areas of a state.

Yields Accurate as of December 10, 2011

Under 1-Year CD Rates

  • Noteworthy Local Deals
  • Alma Bank - 1.35% 12-month Liquid CD requires active chk (New York City)
  • University of Iowa Community Credit Union - 1.30% ($250K) 1.20% ($100K) 1.10% ($1K) 10-month CD (several parts of Iowa)
  • Veridian Credit Union - 1.20% ($100K) 1.00% ($1K) 7-month CD (several parts of Iowa)
  • First Choice Bank - 1.05% ($50K) 1.00% ($2.5K) 288-day CD (Los Angeles & Orange County, CA)
  • Industrial Credit Union - 1.00% 6-month CD (Boston metro area)
  • 1st Commonwealth Bank of Virginia - 1.00% 3-month CD special (Washington DC metro)

1-Year CD Rates

  • Noteworthy Local Deals

18-month CD Rates

  • Noteworthy Local Deals

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.

Edit 12/11/11: Corrected SACU 10yr CD rates.

Related Pages: CD rates
Anonymous   |     |   Comment #1
Typo -- The highest CD rate in the nation now goes to San Antonio Federal Credit Union (SACU) which raised its 10-year CD yield this week from 2.20% APY to 2.30% APY for a $90K minimum (2.25% APY for $10K).

Should be 3.30%
Anonymous   |     |   Comment #2
Ken:  Where are you getting your 2.61% rate for 5 yr CD with DCU?  I just opened one this week without Relationship checking and it was 2.57% even for the Jumbo rate for 5 years.  Not complaining because that is better than others but just wondering how you come up with 2.61%.  Thanks!
Anonymous   |     |   Comment #3
Ken:  Ignore the earlier post.  I just figured out where you got the 2.61%.  That's for people who don't have to take out their dividends and can leave them to compound.  Nice if you can do it.
KenBDG   |     |   Comment #4
@anonymous #1. Thanks for catching that. It's now corrected.

@anonymous #2. Yes, it's APY with reinvesting dividends. I just subtract 0.25% from the posted 2.86%.