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 22, 2012


Survey of the Best CD Rates for June 22, 2012

This week there were two surprise rate increases at Ally Bank. Early this week, the 5-year CD yield increased from 1.65% to 1.69%. Today, there was another rate increase. It's now 1.73% APY. As DA reader cumulus noted in this forum thread, we have seen many rate oscillations at Ally. It does make you wonder about Ally's strategy. Why not just hold rates steady? Perhaps it's related to Ally's supposed agreement with the FDIC that requires Ally not to be one of the nation's top five rate payers, as measured by Bankrate.com? I looked at Bankrate.com's 5-year CD rate table, and Ally's new 1.73% CD just happens to be 6th from the top. Coincidence?

For those who just recently opened an Ally 5-year CD, don't forget you will get the benefit of Ally's Ten Day Best Rate Guarantee. According to Ally, when you fund your CD within ten days of opening (including your open date) or when your Ally CD renews, you automatically get the best rate Ally offers during those ten days. You may also be able to benefit from Ally's Loyalty Rewards Program for CD renewals.

With this latest Ally rate bump, Ally's 5-year CD now has the advantage compared to Barclays' 1.80% 5-year CD when the CDs are closed early after 1 to 2 years. Last week Barclays had a slight advantage for 18 months and 2 years. Barclays' early withdrawal penalty is just a little bit larger (3 months of interest) than Ally's penalty of 60 days of interest. I have more details and risks of this strategy in my post on Comparison of Long-Term CD Rates After Early Withdrawal Penalties.

If you don't care about the early withdrawal penalty, the highest 5-year CD rate at a bank is 1.91% APY. Two banks now have this rate. Last week State Bank of India New York increased its 5-year CD yield from 1.81% to 1.91%. This week The National Republic Bank of Chicago did the same thing. Both of these banks allow people from any state to open the CDs without a branch visit. However, I would give the advantage to The National Republic Bank of Chicago since they have an online application.

There wasn't all good news this week. The "over 5-year" rate leader cut its rate this week. Apple Federal Credit Union lowered its 10-year CD yield from 2.70% to 2.40% APY. For this category, the rate leader is now Navy Federal Credit Union with a 2.55% APY 7-year Jumbo CD. However, this isn't completely nationally available since new members must have a connection with the military. Close behind Navy Federal is Patelco which continues to offer a 2.50% APY 7-year CD or IRA CD. Unlike Navy Federal, there's an association that anyone can join to qualify for Patelco membership.

Local CD Deals

It seems like most of the rate cuts for the local deals are coming from the long-term CDs. As we have seen in the last few months, CD rates around 2.50% tend not to last long. There were a few more examples this week.

First, Crescent Bank & Trust in Louisiana cut its 5-year CD yield from 2.50% to 2.00%.

Wayne Savings Community Bank in Ohio had the same rate reduction on its 10-year CD. It's now 2.00% APY.

Finally, we had another small rate cut at Randolph-Brooks Federal Credit Union in Texas. Its CD rates fell 5 basis points this week. Its 7-year CD yields continues to fall closer to 2.00%. Its APYs now range from 2.38% APY for a $75K deposit to 2.22% APY for a $1K deposit.

One small bit of good news was the addition of The MINT National Bank which is located north of Houston. Its offering two competitive long-term CD rates: 2.10% APY for a 5-year term and 1.80% APY for a 4-year term.

Another addition to the list is BBVA Compass. I added its 15-month and 2-year CDs to the list. They're not exceptionally competitive, but they're respectable in today's awful interest rate environment. The 2-year CD has a 1.25% APY and the 15-month CD has a 1.00% APY. BBVA Compass continues to offer a 2.00% APY 5-year CD. These can vary by state, but they appear to be currently available in all of the states where BBVA Compass has branches. I often include large banks like BBVA Compass in the local deals list even if the CD rates aren't exceptional. I'm a little easier on large banks since their CDs are available to many people in several states.

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 22, 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
Anonymous   |     |   Comment #1
Be vary careful of Discover Babks 2.25 10 year CD.

1. On the website there is a footnote that says

1. Annual Percentage Yield (APY) is valid as of 06/19/2012. This offer applies to personal accounts only. Rates may change at any time without prior notice, before or after the account is opened. Minimum opening balance is $2,500. A penalty may be charged for early withdrawal. (emphasis mine)

2. I looked everywhere for the terms and conditions for the Bank's ability to change the T and Cs. I was told the only way I could get this informatioin, was to open an account, even with a zero balance. I did so.

A booklet was sent to me, and buried in it, if I understnd it, was the following.

a) They can change ANYTHING with 30 days notice (which   course I could easily miss)

b) I would have the opportunity to break the CD BUT I would have to pay the penalty.

What a bad deal