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Higher CD Rates at Barclays


Barclays increased the rates on its 5-year, 3-year and 2-year CDs. Most noteworthy is the new 5-year CD rate increase. The yield went up by 15 basis points to 2.15% APY. The 3-year and 2-year CD rates went up by 10 basis points to 1.35% APY and 1.15% APY. These rates are accurate as of 1/16/2014. The last rate bump at Barclays was in October. The new 5-year CD rate is still way below what PenFed is offering. Nevertheless, it does show a trend of higher long-term CD rates.

Barclays’ long-term CDs used to be great deals due to a small early withdrawal penalty (EWP). That changed in March when the EWP went up from 90 days of interest to 180 days for terms over 24 months. However, the 180-day EWP for long-term CDs is still reasonable. Also, it should be noted that this new EWP was NOT retroactive. It did not affect existing CDs.

3.75%--Barclays60 Month Online CD
Rates as of April 16, 2024.

Not all CD changes have been negative. One is a policy change regarding interest disbursement. When Barclays first started offering online CDs, it did not allow interest disbursement. Now you can receive an interest disbursement from your CD on a monthly basis. You have the option to keep interest in your CD account or transfer it to another account (either the Barclays savings account or a verified external account).

One downside with Barclays is that they do not offer IRA CDs.

When I opened a Barclays CD, the application process was simple and smooth. One of the nice features of the application is the ability to designate beneficiaries which will make an account a Payable on Death (POD) account. No social security number was required for the beneficiaries. Another nice feature of the application process was the funding. I chose an ACH transfer to fund the CD, and it went smoothly. They use a trial deposit system to verify the external account. Two small deposits will be made to the external account. No withdrawals are done. External account can be a checking or savings account. You also have the option to mail in a check to fund the CD.

Barclays Online Savings Account

Barclays also has a good deal on its online savings account. It has a competitive rate of 0.90%. Since the savings account was launched in March 2012, there has been only one rate cut. That happened on May 16, 2013 when the yield went down from 1.00% to 0.90%. The online savings account has several nice features such as no minimum balance requirement and no monthly fees. Barclays also has a nice ACH transfer system. I have more details on its ACH system in this blog post.

Bank Overview

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 grade at DepositAccounts.com of A+ with a Texas ratio of 4.22% (excellent) based on September 2013 data. Please refer to our financial overview of Barclays Bank Delaware for more details. The bank has been a FDIC member since 2001.

How the Barclays 5-Year CD Rate Compares

Barclays’ new 5-year CD rate is still quite a bit below PenFed’s 3.04% APY. Nevertheless, Barclays’ 2.15% APY is very competitive when compared to other internet banks. The highest 5-year CD yield from a bank is currently 2.16% APY at EverBank. One downside with EverBank is a very harsh early withdrawal penalty. The above rates are accurate as of 1/16/2014.

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.

Related Pages: Barclays, CD rates

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