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 6, 2012


Survey of the Best CD Rates for July 6, 2012

With every new month I'm always a little worried about rate cuts, but the start of July wasn't too bad. Most of the rate cuts on my list came from credit unions. Navy Federal Credit Union cut its 7-year and 6-year CD rates by 20 basis points. That knocked Navy Federal off the top of the over-5-year CD list. Patelco Credit Union's 2.50% APY 7-year CD is now on top for nationally available CDs with terms over 5 years.

Based on today's news of another weaker-than-expected job report, we may see further cuts to long-term CD rates. According to this WSJ article, the benchmark 10-year Treasury note's yield hit a one-month low today of 1.54%. That's just a little higher than the record low on June 1st of 1.44%.

Not all CD rate changes was bad news. Fort Knox Federal Credit Union has a new 59-month CD with a 2.25% APY. This now takes the top spot for nationally available 5-year CD rates. This CD rate change actually happened in late June but I had missed it in my last rate survey. The downside to this CD is that Fort Knox FCU has increased the early withdrawal penalty on existing CDs (see review).

CIT Bank added a new 5-year CD with competitive rates. The Jumbo 5-year CD has a 1.90% APY which is slightly under the top nationally available 5-year bank CD yield (1.91% APY). CIT Bank's regular 5-year CD has a 1.85% APY. This requires a $1,000 minimum deposit. Unfortunately, these are not CIT Bank's Achiever CDs which allow for rate a bump-up and an add-on deposit.

Local CD Deals

There were also a few rate cuts for the local CD deals. Two institutions that had big rate cuts this week are Crescent Bank & Trust in Louisiana and Schools Federal Credit Union in Los Angeles. Due to the size of the rate cuts, I removed them from my list.

On the plus side, I added two new local deals. One is a new 3% CD, but there's a catch. Members Cooperative Credit Union in Minnesota is offering a 5-year Jumbo CD with a 3.20% APY and 4-year Jumbo CD with a 2.30% APY. The catch is that the credit union requires an active checking account with at least 5 debits a month. This is similar to the special 3% 5-year CD at Belmont Savings Bank. One advantage of the credit union's CD is that there's no balance cap. So if you have a large balance, the extra work of the checking account may be worth it. Unfortunately, it's a very local deal with membership primarily limited to the Duluth area of Minnesota (see review).

The other addition is HAPO Community Credit Union in Washington State. It's offering two very competitive yields of 2.20% for a 5-year term and 2.10% for a 4-year term. Anyone in Washington State can qualify for membership (see review).

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 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.

Related Pages: CD rates
Bozo   |     |   Comment #1
For those with 401Ks (either those still working, or who have not rolled-over their 401K into an IRA), you might want to look at "stable value funds", if offered by your 401K. While a bit opaque, they do offer yields quite a bit north of 2%.
Anonymous   |     |   Comment #2
Bozo  Your right! 

I have 2 different 401K stable value accounts.  Each one yields a little over 3%.  I probably will never do a IRA rollover on these, since 401Ks have more legal protection than IRAs.
Bozo   |     |   Comment #3
Stable value funds are a bit like tasty sausage. Nice flavor, but nobody can really explain (or wants to know) "why".

It all has to do with contracts, derivatives, wraps, and other arcane ingredients. I suspect they have outsized counter-party risk, but your garden-variety 401K administrator (at least my wife's garden-variety 401K administrator) could not explain the risk/reward. That said, they are quite popular.