CD Rates Summary - July 7, 2021

Most of the CD rate changes in the last two weeks were at credit unions. The good news is that most of the changes were rate increases. Most increases were small, and the new rates are still very low by historical standards. Nevertheless, it’s a positive sign that we may be past the rate bottom for CDs.

Out of 15 noteworthy credit union CD rate changes, ten were rate increases, three were rate reductions, and two were a mix of rate hikes and cuts.

PenFed was one of the nine credit unions that increased its Certificate rates. The new rates are nothing to get excited about, but it’s nice to finally see rate hikes at PenFed. Most of PenFed Certificate rates had a modest 10-bp rate increase. However, its 5-year rate increased 30 bps to 1.00% APY, and its 15-month rate increased 30 bps to 0.75% APY.

Only three major online banks had CD rate changes in the last two weeks. The changes only impacted a few of the banks’ CDs.

Synchrony was the only one to hike rates. Its 15-month CD rate increased 5 bps to 0.55%, and its 9-month CD rate increased 20 bps to 0.55%.

Ally Bank just did one small rate cut. Its 3-month CD rate fell 5 bps to 0.15%. Ally has rarely offered competitive rates on its High Yield CDs with terms under one year. For the vast majority of the time, Ally’s Online Savings Account has offered higher rates. The only reason to open the 3-month CD has been to keep a tiny amount in these CDs so you can renew one of these into a competitive longer-term Ally CD with a renewal bonus.

The third major online bank to make rate changes was USAA Bank. This year USAA Bank has been cutting all of its CD rates to uncompetitive levels, and its latest cuts have lowered the short-term rates to almost zero. All of its short-term CD rates (with terms under one year) are now only 0.01%.

Noteworthy CD rate changes from two weeks ago are included below (All percentages are APYs).

I’ve separated them into three groups: 1) the popular banks, 2) the less well-known banks that have been rate leaders, and 3) the credit unions with easy membership requirements.

Popular Online Banks:

• Synchrony Bank (15m 0.50% → 0.55%, 9m 0.35% → 0.55%)
• Ally Bank (3mo 0.20% → 0.15%)
• USAA Bank (9m 0.03% → 0.01%, 6m 0.03% → 0.01%)

Less well-known banks that have been rate leaders in the past:

• Quontic Bank (5yr 1.10% → 1.11%)
• Merrick Bank (1yr 0.65% → 0.70%)
• MainStreet Bank (2yr 0.40% → 0.30%, 1yr 0.30% → 0.20%)
• IncredibleBank (2yr 0.30% → 0.25%, 1yr 0.20% → 0.15%)

Credit unions that have easy membership requirements:

• Advancial CU (5yr Jbo 1.84% → 1.97%, 1yr Jbo 0.93% → 0.98%)
• Abound CU (47m Spc 1.30% → 1.45%)
• NASA FCU (49m Spc 1.40% → 1.35%, 15m Spc 0.70% → 0.65%, 9m Spc 0.65% → 0.60%)
• Michigan State University FCU (5yr Jbo 1.30% → 1.35%, 2yr Jbo 0.65% → 0.70%)
• Connexus CU (5yr 1.00% → 1.06%, 1yr 0.55% → 0.61%)
• Teachers FCU (5yr 0.85% → 1.05%)
• PenFed CU (5yr 0.70% → 1.00%, 15m 0.45% → 0.75%)
• CommunityWide FCU (3yr 0.85% → 0.90%, 1yr 0.75% → 0.85%, 6m 0.70% → 0.85%)
• Veridian CU (9m Spc Jbo 0.40% → 0.85%, 7m Spc Jbo 0.85% → 0.40%)
• USALLIANCE Financial CU (35m Spc 1.00% → 0.85%, 18m Spc 0.65% → 0.80%, 9m Spc 0.50% → 0.25%)
• AgFed CU (5yr 0.80% → 0.85%, 1yr 0.25% → 0.28%)
• Parda FCU (5yr 1.00% → 0.80%, 1yr Jbo 0.55% → 0.45%)
• Alliant CU (18m 0.50% → 0.55%, 12m 0.50% → 0.55%)
• Sun East FCU (18m 0.25% → 0.45%)
• Credit Union of the Rockies (5yr 0.60% → 0.10%, 18m 0.20% → 0.05%)

Brokered CD Rates

This year there have been substantial rate gains on long-term brokered CDs. The gains have slowed since the middle of March. The short-term brokered CD rates have remained near zero.

Brokered CD rates often follow Treasury yields of similar maturities. However, long-term brokered CD rates haven’t dropped like 5-, 7- and 10-year Treasury yields have in the last couple of months. With Treasury yields continuing to drop (10-year fell to 1.33% today), we’ll see if there'll be similar drops on brokered CD rates.

The top non-callable long-term CDs have been primarily driven by one issuer. State Bank of India has been offering rates well above other issuers. That’s the case again for the 10-year term. Both Fidelity and Vanguard listed a 10-year non-callable CD from State Bank of India with a 1.80% rate (same as two weeks ago).

State Bank of India wasn’t on top for the 7-year and 5-year terms. It’s interesting to note that Sallie Mae Bank was offering the highest 5-year non-callable CD rate at both Fidelity and Vanguard (1.00%). It also was offering the highest 3-year CD rate (0.55%). Sallie Mae Bank must be in need of deposits. Even its internet bank division has raised a few of its direct CD rates in the past month.

For mid-term CDs, Sallie Mae Bank’s 3-year CD (0.55%) had the highest rate at both Fidelity and Vanguard. The top 2-year CD rate was 0.25% at both Fidelity and Vanguard. Several different banks were offering this rate, and it’s the same top 2-year rate that was available two weeks ago.

For short-term brokered CDs with terms of 18 months and under, rates remain very low. The top rate is only 0.15% (18-month term at Fidelity). For terms of one year and under, the top rates are between 0.05% and 0.10%.

The callable feature gives the bank the right to redeem a CD early. That can save the bank money when interest rates fall. However, the CD holder loses out if rates fall and the CD is called early. When banks offer more callable long-term CDs, it’s a sign that they think rates are heading down. When the number of callable long-term CDs decline, banks may think rates have reached a bottom and will eventually be rising.

Brokered CD rates often follow Treasury yields. Direct CD rates will often follow brokered CD rates with some lag.

Falling brokered CD rates was a trend that began in November 2018 when the top 5-year rates reached as high as 3.60%. However, that trend may be over. In the last six months, long-term brokered CD rates have been on the rise.

Direct CD Rates and Deals

Advancial Credit Union began the month by raising the rates on all its Certificates, with the 18-month, 2-year, 3-year, and 4-year Jumbo Certificates adding 10, 14, 16, and 9 bps, respectively. The rate increase for the 6-month, 1-year, and 5-year Jumbo Certificates was a more modest 3 bps. Advancial’s Jumbo Certificates continue to have the top rates for most terms. Even though the 5-year rate increase was modest, it moved the 5-year Jumbo yield to 1.97%, just 3 bps shy of 2%. Hope we see 2%+ in August. Unfortunately, readers have been reporting that Advancial is once again not allowing membership through the Connex or other associations. Last November, Advancial officials had been allowing people in any state to become members via the Connex association. If you try to join, please leave a comment about how it went.

For terms under one year, Veridian Credit Union and CommunityWide FCU are just below Advancial with a rate of 0.85%. Veridian replaced its 7-month CD Jumbo Special with a 9-month Jumbo Special. CommunityWide increased the rate of its 6-month CD by 15 bps. I have more details in this Veridian post and this CommunityWide post.

For 1-year CDs, CommunityWide FCU is now on top (excluding Advancial). In addition to increasing its 6-month CD rate to 0.85%, CommunityWide also raised its 1-year CD rate to 0.85%. Quontic Bank’s 1-year CD remains on top for banks with a 0.75% rate.

For 18-month CDs, Consumers Credit Union’s Super Jumbo 20-month CD ($250k minimum) with a 1.00% APY remains the best deal for large balances without any membership limitations. For a $100k minimum, the rate drops to 0.90%, and for a $250 minimum, the rate drops to 0.80%. I have more details in this blog post.

Wings FCU introduced an 18-month CD Special with a 0.85% APY with only a $500 minimum deposit. I’ll have more details soon on this Special.

For 2-year CDs, Lafayette Federal Credit Union’s 2-year CD now shares the top spot with both Veridian Credit Union’s 21-month Jumbo CD Special and CommunityWide’s 2-year CD. All three have a 0.90% rate.

For banks, Quontic Bank continues to have the top 2-year CD rate. Quontic Bank increased its 2-year CD rate from 0.70% to 0.85% in early June.

For 3-year CDs, Lafayette Federal Credit Union’s 3-year CD continues to hold the top spot with a 1.01% APY. Just a little behind is Quontic Bank’s 3-year CD (1.00% APY).

For 4-year CDs, Abound Credit Union has taken the top spot with today’s rate hike of its 47-month CD Special (1.30% → 1.45% APY).

NASA Federal Credit Union lowered its 49-month CD Special yield by 5 bps to 1.35% at the start of July. This is now in second place, just behind Abound’s 47-month CD Special. NASA FCU’s other two CD Specials also had 5-bp rate cuts (15-month Special 0.70% → 0.65% and 9-month Special 0.65% → 0.60%). For more details, please refer to the review of NASA FCU and these CDs.

For 5-year CDs, Michigan State University FCU’s 5-year Jumbo CD yield increased 5 bps in late June to 1.35%, and it’s now tied with Abound’s 59-month CD.

For banks, the top 5-year CD yield is 1.11%. Two banks now offer this rate. State Bank of India (IL) has been offering 1.11% APY on its 5-year Senior Citizens CD since early May. Quontic Bank came out with a 5-year CD with a 1.10% APY in late June. Today, it bumped up this yield to 1.11%.

Savings and Money Market Accounts

Only three institutions continue to offer liquid accounts with yields of at least 1.00% without any small maximum balance, activity/checking requirements or unusual withdrawal limitations. There was a short period when a new online bank (ZYNLO Bank) was offering 1.25% APY on a new online money market account. The promo ended in March, and now only the standard rate is available (0.80% APY).

The first is the fintech M1 Finance. This is a brokerage firm and robo-advisor which also offers a checking account called M1 Spend. M1 Finance has partnered with Lincoln Savings Bank which holds the deposits and allows deposits to be FDIC insured. The Spend account has two options: basic and plus. The basic account offers no interest. The plus account offers 1% APY on all balances. The downside with M1 Plus is a $125-per-year maintenance fee that can’t be waived.

The second one is the fintech T-Mobile Money. It has partnered with a bank (Customers Bank) to hold the deposits in an FDIC-insured account. Its checking account offers 1.00% APY on all balances without any activity requirements.

The third institution with a 1% account is Advancial Credit Union. Its Premium Money Market account continues to have a 1.01% APY for a minimum balance of $100k. For those interested in Advancial CDs, this is another reason to join if you’re eligible.

For more details about these three accounts, please refer to my latest liquid account summary.

Federal Reserve and Interest Rate Summary

The Fed and economy review is now split off on a separate blog post. My weekly summaries will now be focused entirely on deposit rates and deals. Please keep all discussion about the Fed, the economy and politics to my Fed/Economy review blog post.

Here's the link to last week's savings/checking account summary. You can always get the latest rates for savings/checking accounts and CDs by using our rate tables, available via the navigational menu on top.

Yields Accurate as of July 7, 2021

Under 1-Year CD Rates

Noteworthy Local Deals - Under 1-Year CDs

1-Year CD Rates

Noteworthy Local Deals - 1-Year CDs

18-month CD Rates

Noteworthy Local Deals - 18-Month CDs

2-Year CD Rates

Noteworthy Local Deals - 2-Year CDs

3-Year CD Rates

Noteworthy Local Deals - 3-Year CDs

4-Year CD Rates

Noteworthy Local Deals - 4-Year CDs

5-Year CD Rates

Noteworthy Local Deals - 5-Year CDs

Over 5-Year CD Rates

Noteworthy Local Deals - Over 5-year CDs

*1stFB (1st Financial Bank USA), BBUSA (Beal Bank USA), BHAP (Bank Hapoalim), CMBR (Cambridge Savings Bank), ENER (Enerbank USA), FLAG (Flagstar Bank), FSB (First Savings Bank), ICBC (Industrial & Commercial Bank of China), MCBMN (MidCountry Bank MN), MZTB (Mizrahi Tefahot Bank), SAFB (Safra Bank), SBoI (State Bank of India), SMB (Sallie Mae Bank), TAB (Transportation Alliance Bank), UBS (UBS Bank USA),

**New To Summary, as of July 7, 2021

CDs Removed Due To Low Rates Or Expired Specials

CDs Removed, No Longer Available

CDs Removed, Rate Too Low