State Farm Bank increased its 5-year CD and IRA CD rates. The 5-year CD rate increased from 1.90% to 2.05% APY. The 5-year IRA CD had an even larger rate increase. That when up from 1.90% to 2.10% APY. In addition to the 5-year CD, State Farm Bank increased the rate of its IRA money market savings account. It now has a 1.00% APY for balances of at least $25,000. That rate used to be 0.75%. Minimum deposit for the CDs is $500, and the minimum initial deposit for the IRA money market savings is $1,000. These rates are listed in the bank’s rates page as of 1/16/2014. Note, you may have to enter your zip code to view the rates. These CD rates appear available for all zip codes.
|1.75*%||-||-||State Farm Bank||60 Month CD|
|1.75*%||-||-||State Farm Bank||60 Month IRA (Traditional, Roth, CESA)|
|0.45*%||$10k||-||State Farm Bank||IRA Money Market (Traditional, Roth)|
I have more details about the CD features in my previous State Farm Bank CD review. According to the Truth in Savings Disclosure for the fixed-rate CDs, the early withdrawal penalty is equal to 180 days’ interest (earned or not) on the principal withdrawn for certificates with terms longer than 12 months. The CD can be opened online, by phone or at a participating State Farm agent.
State Farm Bank’s IRA CDs have a nice feature for those who have reached age 59½. Here’s what is stated in the Truth in Savings Disclosure for IRAs:
Normal distributions will be allowed on IRAs without incurring an early withdrawal penalty for customers who have reached age 59½. Transfers or rollovers to another IRA are not considered normal distributions.
Many banks don’t waive early withdrawal penalties for this type of distributions.
If you don’t like internet banks, State Farm Bank has the advantage of having a connection with State Farm insurance agents who can help you open an account. However, it’s important to understand those insurance agent offices are not bank branches. Once your account is opened, you’ll need to manage your State Farm Bank accounts online or by phone.
State Farm Bank used to offer competitive rates on its interest checking account, but its rate is now only 0.25% for balances of at least $2,500 as of 1/16/2014.
I just noticed at this State Farm page, that their TurboTax offer is coming on January 19, 2014. It appears that it’ll be the same as previous years. State Farm Bank and State Farm Mutual Funds customers should get free access to TurboTax. I’ll have more on this next week.
The bank has an overall health grade at DepositAccounts.com of an A with a Texas ratio of 9.26% (excellent) based on September 2013 data. Please refer to our financial overview of State Farm Bank for more details. The bank has been a FDIC member since 1999 (FDIC Certificate # 34617).
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