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 May 25, 2012


Survey of the Best CD Rates for May 25, 2012

We had another CD rate increase at one of the new internet banks. In the previous week it was CIT Bank which increased the rates on its 1-year and 2-year Achiever CDs. This week it was Barclays which raised several of its CD rates. The new internet banks of Barclays, CIT Bank and TIAA Direct are definitely adding to the competition and are helping to provide a little upward push for internet deposit rates.

The most noteworthy rate increase at Barclays was on the 5-year term which went up 5 basis points to 1.80% APY. That is low, but in today's awful interest rate environment, that's near the top for nationally available bank CDs. In addition to a top rate, this Barclays' CDs has the advantage of a small early withdrawal penalty. It's only 3 months of interest which is just a little higher than Ally Bank's EWP of 60 days of interest. Due to this top rate and small EWP, I added Barclays 5-year CD in the shorter-term CD lists which lists yields that take into account the penalty. As you can see below, Barclays 5-year CD now has the same post-penalty yield as Ally's 5-year CD if the CDs are closed at 18 months. After 18 months, Barclays has the lead over Ally.

If you want a 5-year CD rate over 2.00%, you'll probably have to look to credit unions. They continue to offer long-term CD rates much higher than what you can find at banks. The highest 5-year CD yield continues to be 2.25% at Astera Credit Union.

There were a few disappointments this week. Ally Bank cut some of its short-term CD rates including the 11-month No-Penalty CD. The No-Penalty CD yield is now 0.91% which down by 3 basis points. If you prefer short-term CDs with terms under 12 months, it's hard to beat this No-Penalty CD.

Another disappointment was at Jacksonville Bank which cut the yield of its nationally available 5-year CD from 1.80% to 1.65%.

Local CD Deals

There were also some disappointments in the local CDs. Bank of the West 5-year Premium CD yield is now 1.65% APY. This had been 2.00% in April and 1.80% in early May. Due to the low rate, I removed it from the list.

Space City Credit Union in Houston made a big rate cut to its 5-year CD. The yield fell from 2.53% to 2.02%.

Randolph-Brooks Federal Credit Union had more rate cuts this week. Its 7-year CD yields fell 5 basis points. The top yield for a $75K minimum is now 2.53% APY.

I added two institutions to the local lists this week. The first addition is Union Bank which is a large bank with branches in CA, WA and OR. It's offering a 2.00% APY 5-year CD at its branches in WA and OR. Unfortunately, its CA branches have lower 5-year CD rates.

If you want a 2% 5-year CD at a bank in California, BBVA Compass continues to offer 2.00% APY on its 5-year CDs. This rate had been lower for TX, AL and FL. However, I just noticed that this rate now applies in all states where BBVA Compass has branches.

The other institution that I added to the list this week is Sea Comm Federal Credit Union in Northern New York State. It has a very competitive 5-year yield of 2.49%. The only problem is that it's a small credit union with a narrow field of membership that just includes residents of two small Northern New York counties. So it's a very local deal.

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.

The risks of planning for early withdrawals of long-term CDs was recently highlighted by another credit union which raised the early withdrawal penalty on existing CDs. The credit union is CEFCU which is based in Illinois. I have more details in this blog post. CEFCU is now the second credit union which has raised the early withdrawal penalty on existing CDs. Last year Fort Knox FCU did the same thing (see my blog 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. 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 May 25, 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.

Related Pages: CD rates

efrugalliving99   |     |   Comment #2
Frugal Living is living better using less financial resources.EfrugalLiving teaches you how to create a budget, save money, reduceyour debt, earn extra cash and live simply.
Anonymous   |     |   Comment #3
You must be a "newbie" here.  We already had our lessons on "Frugal" living and too many equate it to living in poverty, imo.  (not "me" of course).
Anonymous   |     |   Comment #4
Things are only going to get worse as many old CDs are maturing.  The retirees who are living fairly well on their CDs taken out several years ago will have a rude awaking.  Maybe, they will then wish they had signed the savers petition!