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 January 6, 2012


Survey of the Best CD Rates for January 6, 2012

For the first week of 2012, there were only a few banks and credit unions in my survey that reduced their CD rates. For the CDs that are nationally available, only Quaint Oak Bank had a rate cut. Its 5-year CD yield fell from 2.20% to 2.15%. Update 1/7/12: It has been reported that Quaint Oak is now restricting CDs to Pennsylvania.

I added KeySource Commercial Bank's 5-year CD to this list since it also has a 2.15% APY. However, its most competitive CDs are short-term CDs. Last week I added its 7-month and 1-year CDs to the survey. Readers may prefer this bank over Quaint Oak due to KeySource's online application.

US Bank continues to offer its special 59-month CD with a 2.25% APY. I consider this to be essentially a 5-year CD.

The best deals for the nationally available CDs continue to be at all-access credit unions. The four main ones are Melrose, Alliant, Digital and Pentagon Federal (PenFed).

There were hopes that PenFed might start offering a 3% 10-year CD, but that didn't happen. On the positive side, PenFed did raise the rate of one of its CDs. Its 1-year CD yield increased from 0.99% to 1.16%. That makes the 1-year CD rate very competitive. I would have preferred higher long-term CD rates, but with signs from the Fed that interest rates may stay low for even past 2013, PenFed may have decided against long-term CD specials. At least PenFed didn't cut its long-term CD rates. They remain competitive. Its 7-year CD rate continues to be the best long-term CD deal that's nationally available without limitations. The 5-year and 4-year CD rates also remain competitive.

Local CD Deals

There were only a few banks and credit unions that cut their CD rates this week. One disappointment was Alaska USA Federal Credit Union. It's a large credit union that offers membership not only to residents of Alaska, but also to residents in parts of Washington State and California. Its CD rates had a big drop this week. I only kept its 4-year and 5-year CDs in my list. Its Jumbo rates remain competitive with a 2.01% APY 4-year CD and a 2.35% APY 5-year CD.

Every now and then a bank or credit union comes out with a new CD special with higher rates. That happened this week at University of Iowa Community Credit Union which began offering two new CD specials with terms of 10 and 22 months. The credit union isn't limited to just the university. Residents of several Iowa counties are also eligible to join. Unfortunately, there isn't any Iowa credit union that makes it easy for anyone in the nation to join. Iowa credit unions have some of the best rates in the nation.

The small 3.00% club remains the same this week with four institutions on the list. These are banks or credit unions offering CD yields of at least 3.00%. Three are in Texas and one is in Philadelphia. [ Update: Soon after this post was first published, the Philadelphia bank, Royal Bank America, reduced its 7-year CD yield from 3.00% to 2.25%.]

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 is only 6 months of interest, this makes its 5-year CD a good deal for short terms. Ally Bank's 1.79% 5-year CD is still the best deal for 6, 12 and 18 months. However, Digital's 2.35% APY 5-year CD (2.60% with relationship checking) becomes a better deal when it's closed at 24 months or later.

As we learned in September, 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 January 6, 2012

Under 1-Year CD Rates

  • Noteworthy Local Deals

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 11:00pm 1/6/2012: Updated Royal Bank America 7-year CD rate which changed soon after the post was published.

Related Pages: CD rates
Anonymous   |     |   Comment #1
Both Royal Bank America and Liberty Savings FCU rates are slashed! Just called them  
Anonymous   |     |   Comment #2
Something bad is already happening.  I was looking for a 5 year CD today and had such a fit trying to get Digital CU to correct the error in my CD that it drove me to look again for banks!  DCU doesn't give regular CD forms with info showing amount, correct name/names etc so I decided I had to find a bank.  I was shocked to hear that all of the rates I "thought" were suitable from Ken's list were lowered this week!  I finally found a bank miles from our city and drove to it today!  It was The Cecilian Bank and has locations in several places in my state.  It was SO fantastic to be treated so professionally and actually get a paper CD with ALL the info on it I am used to seeing!  They even had "both" our names on it like we requested (unlike a certain other CU!)  I do hope my experience with DCU is not the norm!   The interest rate I got at Cecilian was about the same as I would have gotten with DCU and it was soooo good to get my paper CD to take with me so that I could check it for errors while still in the bank.  There were "no" errors on this CD!  Thanks Ken for having Cecilian on your list cause I would never have found it otherwise.  It is certainly worth the drive!
Anonymous   |     |   Comment #3
Quaint Oak restricted CDs offering to PA since Dec. 27, 2011
Paolo   |     |   Comment #4
Capital One/Costco has a 2.55% CD (long-term) that is still available.  They also give a cash gift when you open it($20 or $60) based on the type of Costco membership you have.  Why isn't this mentioned?
KenBDG   |     |   Comment #5
@anonymous #3, thanks for the comment about Quaint Oak restricting accounts to PA. I've updated the post.

@Paolo, thanks for mentioning Capital One/Costco. I've listed Discover instead since the Discover/AAA rate is the same, and Discover has a much better early withdrawal penalty (see my old Cap One CD review) Since Capital One/Costco does have an extra bonus for new accounts and since I've listed a few close CDs on other terms, I'll add it to the list next week.
Paolo   |     |   Comment #6
Gracias Ken.  Capital One/Costco has held that rate awhile and their customer svce. is generally muy bueno.  Any rate these days in the mid-2.00's is noteworthy.  Feliz Año Nuevo.
Anonymous   |     |   Comment #7
Apple CU has changed early withdrawal penalty - but done it correctly:

"The early withdrawal penalty for 84-month and 120-month certificates will change to 1,095 days of dividends, not to exceed the dividends earned, for certificates opened or renewed on or after February 1, 2012"


Anonymous   |     |   Comment #8
Anony #7  "WHO" would buy "any" Seven or Ten Year CD with a THREE year early withdrawal penalty?  They would have to be offering them one heck of a fantastic interest rate!  My local bank is only offering 2.25% for a TEN year CD!  That is definitely NOT acceptable and then you say we have others strangling people with a 3 year EWP??  They certainly must be convinced they don't need our deposits, imo.
Sebastian   |     |   Comment #9
Re: #8:  Many depositors (including myself) do not open CDs with the idea that we might break them.  I would be very very reluctant to hand that EWP to a bank.  I plan and calculate and open CDs based on the premise that it will not be broken.  And I've always done OK with them.  I do some laddering, and have been able to time things OK so that I usually wished that I'd gone out LONGER and rued that my CD was coming due.  I would like to see rates shoot up and have the dilemma of whether or not to break a CD.  But I've never had that happen. 
Anonymous   |     |   Comment #10
A possible aspect to cover or consider is CUs that will match other's rates.  E.g., you could probably get Stanford Federal Credit Union's match policy against US Bank to get a 5 year 2.35% CD. You'd end up with a higher rate and a smaller early withdrawl penalty.