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 August 10, 2012


Survey of the Best CD Rates for August 10, 2012

After a bunch of rate cuts at the start of the month, rate cuts slowed down this week. For the CDs available nationwide, the bank that had the highest 5-year CD rate cut its rate. The National Republic Bank of Chicago reduced its 5-year CD yield from 1.91% to 1.76%. CIT Bank now has the highest nationally available 5-year CD rate from a bank (1.90% APY for a $100K minimum, 1.85% APY for a $1K minimum).

For terms over 5 years, Bank of America had another rate cut on its 10-year CD. This yield had been over 2.00% for a while which was a rare deal for a megabank. A few weeks ago it fell to 1.85%, and this week it fell to 1.60%.

The best long-term CD deal continues to be the special 7-year CD at Patelco Credit Union which has a 2.50% APY. For a bank the highest rate is at Discover Bank with a 2.10% APY 10-year CD. Its 7-year CD has a 2.00% APY.

Both Patelco Credit Union and Discover Bank have reasonable early withdrawal penalties which can make these good deals even if they're closed early. I did another comparison of long-term CDs closed early in this post. As I described in the post, it's important to understand the risks with this strategy.

One addition this week is Wilshire State Bank. Thanks to the reader who mentioned this bank last week. Wilshire State Bank has a good deal with its Rainbow Savings account. This is an installment savings account, but it's closer to a CD than a savings account. Like a CD the rate is fixed for the entire term. However, instead of one initial deposit, you have to make regular monthly deposits.

I included Wilshire State Bank's 3-year Rainbow Savings account which has a 2.28% APY when the customer sets up automatic transfers from a Wilshire State Bank savings or checking account. Maximum contract amount is $100,000 per customer. The contract is the total value of the account at maturity. For the 3-year account, this would require monthly installments of $2,672. Please refer to my last Rainbow Savings review for more details.

Local CD Deals

Just like the nationally available CDs, the local CDs didn't have many rate changes this week.

I removed the Flushing Bank's special BestRate Checking. Flushing Bank is no longer listing its BestRate Checking special which guaranteed a 1.20% APY through 2012. This wasn't a CD, but the rate guarantee made it similar to a 6-month CD.

I added two new 5-year CDs. Cecil Bank in northeast Maryland is offering 2.15% APY and Mid American Credit Union in Kansas is offering 2.10% APY.

It's getting more and more difficult finding 2% CDs. There remains one large bank that still has a 2% 5-year CD. It's BBVA Compass Bank. Unfortunately, the bank requires new customers to be in their market areas. So it's not nationally available. However, its market areas do include quite a few people in the states of 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 August 10, 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

Paoli do you ever read before you post
Paoli do you ever read before you post   |     |   Comment #2
Try reading the third paragraph.
Anonymous/Paoli   |     |   Comment #3
#2  No!  I play the accordian and dance!  I realized my error the second I posted and tried to get it deleted but it's still there.  We need some type of way to edit or delete posts we make errors on.  Have you never made an error in any post?  At least I don't concentrate on looking for other poster's errors or I wouldn't have time to post my own.  (Something that would make a lot of you very happy, I presume).  Thanks for at least giving me the info even if I had already seen it by the time yours appeared.
Anonymous   |     |   Comment #4
Ok, now I did read Ken's article but still don't understand what he means by the Patelco listing for a 7 yr CD closed after 5 years.  I am referring to the 7 yr 2.50% CD which he says "see review and risk".  I have never heard of a CD which has a 1 yr penalty and if you close it after a certain term you don't have to pay the penalty.  This must be some new type of CD.  I called Patelco and they said you owe the 1 yr penalty on interest earned or unearned no matter when you close it.  So where is the info that Ken has posted coming from?  I am interested in this particular CD so any helpful info will be appreciated.  Thanks!
Anonymous   |     |   Comment #5
The raise your rate type of CD's, step-up rate CD's, boost rate CD's, etc. would seem to be well worth considering, since the other options presently available are quite slim.  
Anonymous   |     |   Comment #6
Regards #1, #3 and #4, sad to say, but it looks like he/she is trolling again for yet another long, drawn-out argument again. Otherwise, there is absolutely no one, and I mean no rational one, who could misread and/or misunderstand, Ken's post that badly. Same ol same ol.
Anonymous   |     |   Comment #7
just ignore the poster of 1 3 and 4
Plbankpl   |     |   Comment #8
Thanks for the Certificate of Deposit Rates comparison.