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 July 27, 2012


Survey of the Best CD Rates for July 27, 2012

There were quite a few cuts this week to the 5-year CD rate leaders. First, Melrose Credit Union slashed all of its CD rates. Its 5-year CD APY fell from 2.17% to 1.96%. Fort Knox Federal Credit Union continues to have the top spot for the 5-year CD, but its rate also fell this week. It's now 2.15% APY, down from 2.25% APY last week. This has a maturity of 59 months.

The top 5-year CD rates for banks with accounts that are nationally available have always been lower than the 5-year CD rates at all-access credit unions like Melrose. A new bank took this top spot last week with a 2.02% APY. Its name is National Bank of Kansas City. It didn't hold on to the top spot for long. Today its 5-year CD APY fell to 1.76%. The new top bank is The National Republic Bank of Chicago with a 1.91% APY. Close behind is the new internet bank CIT Bank with a 1.90% APY for a Jumbo 5-year CD (1.85% APY for a $1K minimum).

If you're looking for a 2% CD from a bank, you may have to go with a maturity over 5 years. Bank of America was actually one of those banks. Its 10-year CD had a yield up to 2.10%. That fell today to 1.85%.

I now have only 3 banks with nationally available CDs that have yields of at least 2%. These 3 banks are Discover Bank with a 2.25% APY 10-year CD and a 2.00% APY 7-year CD, Dime Savings Bank with a 2.05% APY 7-year CD and Third Federal with a 2.00% APY 6-year CD.

The 10-year Treasury yield did rise this week as investors saw less risk in Europe, but it's still very low at 1.54%. With the weak GDP data in today's report showing continued sluggish growth, I wouldn't count on higher yields becoming a trend.

Local CD Deals

Parts of Texas continue to offer the best CD rates in the nation. El Paso is one of those areas of Texas. I added the El Paso-based credit union One Source FCU to the list. Its 2.88% APY 5-year CD is now on top with the highest 5-year CD rate without an active checking requirement.

The Houston area can't match El Paso for top CD rates, but Houston residents can still get CD rates higher than what's available nationwide thanks to Shell Federal Credit Union. I added it to the list with 3 competitive CDs including a 2.20% APY 5-year CD.

It wasn't good news for all of Texas. Randolph-Brooks Federal Credit Union which is based in San Antonio cut rates again this week. Its 7-year CD yield fell from 2.22% to 2.02%.

Texas isn't the only state with top CD rates. I added the Massachusetts-based credit union, Merrimack Valley, to the list with a 2.30% APY 5-year CD. Membership is open to residents in parts of Massachusetts and New Hampshire.

There is still one large bank that is offering a 2% 5-year CD. It's BBVA Compass, and it has been offering this CD for the last several months. I'll be surprised if it lasts too much longer. The CD is not nationally available. You have to live near a branch, but Compass has hundreds of branches in AZ, CA, CO, NM, AL, FL and TX.

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 July 27, 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
Bozo   |     |   Comment #1
Nice to see National Bank of Kansas City kept the 2-year rate the same, despite the drop in rates on higher maturies. The rate on the 2-yr (while not stellar, at 1.11%) is certainly better than what they were quoting back in June, when I was there visiting my Mom (0.35%). I wonder if they were "flooded" with "hot money" on the five-year CD. Given the short period of time the 2% rate was available on the 5, I suspect so.
Anonymous   |     |   Comment #2
10-year brokered CDs offer 2.65%.  If you want to lock in that well you'd probably do better off with a high dividend mutual fund or ETF that pays more than 3%.  The value can go down but you only lose money when you sell so don't sell (having said that, now is probably a poor time to buy since their price of these funds has gone up by 3% over the last few days alone).
Anonymous   |     |   Comment #3
FWIW, the 10 yr brokered CD's at Fidelity are 2.60%, as of now. Anyone know of any 10 yr CD's, brokered or otherwise, yielding more than 2.60% or 2.65%?  (And yes, the brokered CD's may have an element of risk that the direct CD's don't have but thats another subject altogether.)
Bozo   |     |   Comment #4
Vanguard's brokered CDs plop the interest into your account (i.e., the interest does not compound).
Anonymous   |     |   Comment #5
Bozo:  I don't think it matters that Vanguard and Fidelity don't compound interest in their Cash Reserves when it goes into it since as soon as one has enough to purchase another CD, it goes back out.  Why keep it in their Cash Reserves at the paltry interest they pay on the accounts?  I think one does better getting even a 1% CD than letting the money just sit at practically nothing in interest.
Bozo   |     |   Comment #6
Anon #5, the catch is that many brokered CDs have a "minimum" purchase amount. If your $100,000 CD is throwing off $2600/yr in interest, and the "minimum" for a new CD is $3000, you have to wait 14 months (14 X $216.66/mo = $3033.33) before you can re-invest in another CD. Meanwhile, the interest sits in a sweep or money-market account, earning almost nothing. If one is still accumulating, that results in a drag on yield.