Barclays has recently made a change to its CDs that should be appreciated by some savers. You can now receive an interest disbursement from your CD on a monthly basis. Before this change, CD customers could only have their interest accumulate in the CD. For those who depend on CD interest for their income, this is an important feature. When I first reported on Barclays, a reader noted that the FAQs stated that interest on CDs isn’t disbursed, and he said “that’s a non-starter for me.” The new Barclays CD FAQs now state the following:
Can I receive interest disbursements from my CD?
Yes, you can receive an interest disbursement from your CD account on a monthly basis. You have the option to keep interest in your CD account or transfer it to your Barclays Online Savings account or a verified external account.
It’s nice to see Barclays is making improvements like this. It helps a little to offset the negative change that we saw in March when Barclays announced a larger early withdrawal penalty for new CDs with terms over 2 years. The EWP for these CDs increased from 90 days to 180 days of interest.
Barclays 5-year CD remains as one of the best deals for internet banks. As of 5/14/2013, it has a 1.75% APY with no minimum deposit requirement. Some of the other internet banks that offer this rate require a $100K minimum deposit. I’ve also found that Barclays’ CDs are very easy to open and fund using the bank’s online application.
Barclays savings account is also one of the best deals for internet banks. As of 5/14/2013, it has a 1.00% APY with no minimum balance requirement. The main issues that readers have reported are a slow ACH transfer service (5 days have been reported) and a 5-day hold when using Barclays ACH service. I looked into the history of Barclays and what we can expect in the future in this blog post.
The Barclays internet bank is part of Barclays Bank Delaware which is a FDIC member (FDIC Certificate # 57203). The bank is best known in the U.S. for partnering with companies in offering co-branded credit cards. It's part of the U.S. division of Barclays, a British multinational megabank.
Barclays Bank Delaware has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 5.37% (excellent) based on December 2012 data. Please refer to our financial overview of Barclays Bank Delaware for more details. The bank has been a FDIC member since 2001.