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 June 15, 2012


Survey of the Best CD Rates for June 15, 2012

Ally Bank had held its 5-year CD rate steady for over a month, but that ended today. The 5-year CD yield fell 4 basis points to 1.65% APY. At least most of Ally's other CD rates held steady. Its 4-year Raise Your Rate CD is looking more appealing with its 1.45% APY. If you think rates may rise in 2 to 3 years, the Raise Your Rate feature could come in handy.

I continue to mention Ally Bank's 5-year CD since it has a small early withdrawal penalty of 60 days of interest. However, there's another internet bank that has a better deal. Barclays 5-year CD continues to have a 1.80% APY. Its early withdrawal penalty is just a little bit larger (3 months of interest). Due to this larger penalty, Ally continues to be the better deal if the CD is closed at one year or earlier. However, soon after one year, this Barclays 5-year CD becomes the better deal.

Barclays 5-year CD rate is very competitive, but it's not the highest bank rate that's nationally available. That now goes to State Bank of India New York which increased its 5-year CD yield to 1.91% this week. If I were to choose between Barclays and State Bank of India, I would choose Barclays since it has an smaller early withdrawal penalty and it offers an online application and online banking. State Bank of India doesn't provide any online banking services (see review).

Credit unions continue to provide the best long-term CD rates. There are several all-access credit unions that offer rates much higher than what banks offer. Unfortunately, we lost one rate leader this week. Credit Union of New Jersey slashed its 5-year Jumbo CD yield from 2.20% to 1.60%.

Justice Federal Credit Union is now alone on the top with a 2.20% APY Jumbo 5-year CD. Melrose Credit Union is close behind with a 2.17% APY.

If you want to hedge against this awful interest rate environment lasting far past 2014, you may want to consider 7-year or 10-year CDs. Patelco Credit Union continues to offer a 7-year CD with a 2.50% APY. This exceeds PenFed's 7-year CD yield by 10 basis points. Like PenFed's 7-year CD, this Patelco CD has an early withdrawal penalty of 1-year of interest and it becomes a better deal than Barclays' 5-year CD if closed early after 3 years. For more information about comparing early-closure CD yields, please refer to this blog post.

Local CD Deals

Several credit unions reduced their CD rates this week. These included El Paso Area Teachers FCU, Endura Financial FCU, Via Credit Union, Air Force FCU, Gateway FCU and Randolph-Brooks FCU.

Several of these credit unions that reduced their rates this week had long-term CD rates in the high 2 percent range. Those rates are falling towards or below the low 2 percent range.

Air Force FCU is one example. Its long-term CD rates fell 20 basis points. Its Jumbo 7-year CD yield fell from 2.75% to 2.55% and its Jumbo 5-year CD yield fell from 2.20% to 2.00%.

El Paso Area Teachers FCU used to have a 5-year CD yield close to 3.00%, but after this week's rate cut, its Jumbo 5-year CD yield is now 2.58%.

Randolph-Brooks FCU CD rates fell 10 basis points. Its new Jumbo 7-year and 5-year CD rates are 2.43% and 1.94% APY. Randolph-Brooks is available to people in San Antonio and Austin, Texas. For those in San Antonio, you can get a 2.36% APY 5-year CD at San Antonio Credit Union (SACU). For those in Austin, you'll have to go with a bank for a 2.00% APY. BBVA Compass which has branches in Austin continues to offer a 2.00% APY 5-year CD.

In addition to Austin, BBVA Compass has branches through out Texas and in several other states. Rates can vary by state, but currently this 2.00% APY appears to be available in all of its market areas. It's the largest bank that's still offering a 2% APY 5-year CD. I'll be surprised if it lasts into July.

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 June 15, 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: Removed AAA rate bonus for Discover 10yr & 7yr CDs. Added Alliant 4-year CD.

Related Pages: CD rates
Bozo   |     |   Comment #1
Not sure why Alliant fell off the chart. I just opened a 4 year IRA CD at 1.65% today. Not great, but competitive.
Anonymous   |     |   Comment #2
Discover bank for AAA members only offers bonus rates( 0.05%) on 12,24, & 60 month CD accounts. All other CD terms and Money Market/Savings accounts now offer the standard Discover Bank rates.
KenBDG   |     |   Comment #3
Thanks, I've updated the post with the Alliant CU 4yr CD addition and with the removal of the AAA bonus rates.
Robert   |     |   Comment #4
Ally 5-year CD seems to be back up to 1.69% APY today.  And don't forget about their loyalty bonus either.
Robert   |     |   Comment #6
Ally 5-year CD is up to 1.73% today!!!  I'm not sure why they dropped, and then raised twice all within about a week's time