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For Top Rates, Can Credit Unions Compete?Top 7-Year CD Rate at Dime Savings Bank - Available Nationwide
Yesterday I reviewed one of the few banks that still offers a 2% CD that's available nationwide. A reader reminded me of another bank. It's Dime Savings Bank which is based in New York. The bank is offering a 2.05% APY 7-year CD. Minimum deposit is $500. The shorter terms are not quite as competitive. The 5-year CD has a 1.60% APY. These rates are listed in the bank's rates page as of 7/12/2012.
The big downside to Dime's long-term CDs is a harsh early withdrawal penalty. Here's what is stated in the disclosure:
Early Withdrawal Penalty – Principal may not be withdrawn from your Certificate before the account maturity date, unless the Bank consents to the withdrawal. If a withdrawal of principal is permitted, you may incur one of the following Bank penalties: [...] 5. Accounts with terms of 3 years or more will lose 24 month’s simple interest.
Interest is compounded daily and credited to the account monthly and at maturity. The grace period is 10 calendar days after maturity.
CD Application and Closing Procedures
Dime's CDs are available nationwide, but you'll probably find it much easier to open or close a CD if you can visit a branch. I called Dime Savings today to confirm some details of the application and closing process. Accounts can be opened online or by phone. If you don't open in a branch, they do require you to mail or fax copies of your driver's license and utility bill. They will mail you a new account package. I was told that the rate won't lock until they receive the copies of your IDs. The CD can be funded by check or with an ACH transfer. They only accept a check for funding an IRA.
If you don't want to renew the CD when it matures, I was told they require written instructions to be mailed or faxed. The only option to receive the funds is by check. ACH isn't an option, and wire transfers require a branch visit.
Bank Overview
Dime Savings Bank branches are located throughout the Greater New York metro area.
Dime Savings Bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 5.10% (excellent) based on March 2012 data. Please refer to our financial overview of Dime Savings Bank for more details. The bank has been a FDIC member since 1943 (FDIC Certificate # 16012).
How This CD Rate Compares
This Dime Savings 7-year CD rate is currently the best nationally available 7-year CD rate that's available from a bank. The next best is 2.00% APY at Discover Bank. You can get much higher rates at an all-access credit union. The highest 7-year CD rate is 2.50% APY at Patelco Credit Union.
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.
They also accepted a form from me (confirming in a phone call it had been received and was sufficient) initiating a Trustee to Trustee transfer in advance of the transfer and then told me on the maturity date the form had to come from the other institution, delaying the transfer a week.
Something else that bothers me about Dime is they charge a $25 fee for a Trustee to Trustee IRA transfer from the bank. None of the other dozen or so banks or credit unions I have made such transfers from charged a fee.
Weird.