CD Rates Summary July 2, 2020

As expected, many credit unions lowered their CD rates at the start of July. Two well-known credit unions cut rates to all-time lows. These are PenFed and Alliant. PenFed’s 5-year CD yield fell to 1.00%. PenFed’s previous all-time 5-year low was in mid-2013 when the 5-year CD yield fell to 1.15%.

Credit unions that had been offering 2% CDs a couple of months ago made additional rate cuts. Even with these rate cuts, their 5-year CDs remain rate leaders that exceed the top 5-year CDs at online banks. These include Georgia’s Own (1.70%), Pen Air (1.60%) and Financial Partners (1.60% Jumbo).

A couple of credit unions that had decent CD specials in June slashed rates in July. NASA Federal Credit Union is one. The yield of its 9-month Special CD plummeted from 1.50% to 0.65%. The other one is USALLIANCE Financial. The yield of its 3-year Special fell from 1.50% to 1.15%, and the yield of its 18-month Special fell from 1.45% to 1.10%.

At online banks, CD rates continue to fall. However, the pace of cuts may be slowing a bit. Nevertheless, we’re seeing more all-time lows. These include Ally Bank’s 5-year CD (1.15%), Discover Bank’s 5-year CD (1.15%), and First Internet Bank’s 5-year CD (1.31%).

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. All of the changes this week were rate cuts, except for one. Communitywide Federal Credit Union actually increased its 5-year and 4-year CD rates by a small amount. The 5-year yield increased 10 bps to 1.35%, and the 4-year yield increased 5 bps to 1.30%.

Popular Online Banks:

• TIAA Bank (5yr YP 1.60% → 1.50%, 1yr YP, 2.5yr YP 1.10% → 1.01%)
• Ally Bank (5yr 1.25% → 1.15%, 1yr 1.10% → 1.00%)
• Discover Bank (5yr 1.20% → 1.15%, 1yr 1.01% → 0.90%)
• CIT Bank (5yr 1.30% → 1.05%, 1yr 1.25% → 0.75%, 11m NP 1.10% → 0.75%)
• Live Oak Bank (5yr 1.20% → 1.00%, 1yr 1.25% → 1.00%)

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

• First Internet Bank (5yr 1.41% → 1.31%, 1yr 1.14% → 1.01%)
• State Bank of India (5yr Senior 1.41% → 1.31%, 1yr Senior 1.31% → 1.21%)
• Colorado Federal Savings Bank (5yr 1.25% → 1.15%, 18m 0.90% → 0.80%)
• WauBank (61m → 1.45% → 1.15%, 13m 1.35% → 1.05%)
• Limelight Bank (3yr 1.20% → 1.15%, 1yr 1.15% → 1.10%)
• CFG Bank (5yr 1.30% → 1.15%, 13m PF 1.15% → 1.00%, 1yr 1.20% → 1.05%)
• TotalDirectBank (5yr 1.30% → 1.15%, 1yr 1.30% → 1.15%)
• Rising Bank (3yr Rising 1.20% → 1.10%, 1yr 1.20% → 1.05%)
• Comenity Direct (5yr 1.35% → 1.10%, 1yr 1.25% → 1.00%)
• Citizens Access (5yr 1.15% → 1.00%, 1yr 1.00% → 0.85%, 11m LCD 0.85% → 0.75%)

Credit unions that have easy membership requirements:

• Georgia’s Own CU (5yr 1.90% → 1.70%, 1yr 1.30% → 1.15%)
• Pen Air FCU (5yr 1.70% → 1.60%, 1yr → 1.35% → 1.25%)
• Financial Partners CU (5yr Jumbo 1.75% → 1.60%, 1yr Jumbo 1.25% → 1.15%)
• State Department FCU (5yr 1.66% → 1.51%, 2yr 1.26% → 1.21%)
• TruStone Financial CU (5yr 1.70% → 1.50%, 1yr 1.00% → 0.90%)
• Hiway FCU (5yr 1.60% → 1.40%, 2yr 1.20% → 1.15%)
• Communitywide FCU (5yr 1.25% → 1.35%, 1yr 1.25% → 1.20%)
• Interior FCU (5yr Jumbo 1.46% → 1.31%, 1yr Jumbo 1.16% → 1.06%)
• Navy FCU (5yr 1.35% → 1.30%, 1yr 1.30% → 1.10%)
• Signature FCU (5yr Jumbo 1.50% → 1.30%, 1yr Jumbo 1.40% → 1.20%)
• Lafayette FCU (5yr 1.76% → 1.26%, 1yr 1.31% → 0.80%)
• USALLIANCE Financial CU (3yr Spc 1.50% → 1.15%, 18m Spc 1.45% → 1.10%)
• PenFed CU (5yr 1.20% → 1.00%, 1yr 0.95% → 0.70%)
• NASA FCU (49m Spc 1.35% → 0.90%, 15m Spc 1.10% → 0.70%, 9m Spc 1.50% → 0.65%)
• Alliant CU (5yr 0.90% → 0.75%, 1yr 0.80% → 0.65%)

Brokered CD Rates

Brokered CDs rates were on a rollercoaster in March. Soon after the first emergency Fed rate cut in early March, brokered CD rates plummeted. Then the liquidity issues and deposit concerns started to affect the banks, and brokered CD rates had large increases in late March. Those concerns appear to be gone now. Brokered CD rates have generally been falling since the start of April.

For the non-callable brokered CDs, the top 1-year rate this morning was 0.15% at both Fidelity and Vanguard. Two weeks ago, the top 1-year rate was 0.20%.

For 5-year CDs, the top rate this morning was 0.80% at both Fidelity and Vanguard. This is down 15 bps from two weeks ago. The top rate for 4-year terms this morning was 0.50% at both Fidelity and Vanguard. This is the same top rate from two weeks ago.

The top 10-year non-callable CD rate was 0.95% at both Fidelity and Vanguard. This is down from 1.00% two weeks ago.

One interesting change is that there are more non-callable CD offerings for the 7- and 10-year terms. In the last year, there have often been only callable CDs for these long terms. The fact that more banks are offering non-callable long-term CDs suggests that they may be thinking rates are reaching a bottom.

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.

Brokered CD rates tend to lead direct CD rates. Since brokered CD rates are quite a bit lower than the top direct CD rates, that would suggest that direct CD rates will continue to fall.

Falling brokered CD rates was a trend that began in November 2018 when the top 5-year rates reached as high as 3.60%.

Direct CD Rates and Deals

We continue to have no nationally-available CDs with yields of at least 2%. The only 2% CD that’s listed in this summary is the 5-year CD at Generations Credit Union (2.12% APY for a $50k minimum). Even though the credit union allows people in any state to become members (via an association), they require members to visit their branch to open CDs. So I’m considering this a local deal.

I took a look back at the CD summary history over the last ten years. I’m afraid the current state of CD rates is worse than it has ever been in the last ten years. I couldn’t find any CD summaries in which there weren’t any nationally available 2% CDs. We came close in June 2013. Only two credit unions were offering 2% 5-year CDs, but both required an active checking account. USALLIANCE Financial was offering a 2% 2-year CD, and Apple Federal Credit Union was offering a 2% 10-year CD.

June 2013 was also the time when PenFed’s CD rates were at all-time lows (before this month). PenFed’s 5-year CD yield was 1.15%, and it remained at this level until September 2013. Rates improved in 2013, and by December 2013, PenFed was offering 3.04% APY on its 5-year and 7-year CDs, which lasted for two months. Let’s hope rates turn around in 2020 like they did in 2013.

The highest CD rate that’s nationally available continues to be the 5-year CD at Georgia’s Own Credit Union (1.70% APY, $500 minimum). This is down 20 bps from June. Even with this rate drop, it maintains its rate leading status. Unfortunately, this CD has a harsh early withdrawal penalty (450 days’ interest). Membership is open to people in any state via membership in either the Georgia’s Own Foundation or the Getting Ahead Association.

The highest CD rate that’s nationally available from a bank is only 1.50% APY. This is the yield of TIAA Bank’s 5-year Yield Pledge CD. In late June the yield fell from 1.60% to 1.50%. I wouldn’t be surprised if this falls again since it has a sizable lead over its competitors (1.40% APY at First National Bank of America and 1.31% APY at First Internet Bank). Like Georgia’s Own Credit Union, TIAA Bank also has harsh early withdrawal penalties. For the 5-year CD, TIAA Bank’s early withdrawal penalty is equal to 456 days’ interest.

Keesler Federal Credit Union lowered its Certificate rates, but its Step Certificates remain very competitive when you compare their blended APYs with the APYs of similar term CDs. Its 30-month Step Certificate has a 1.78% blended APY for a $1k minimum and a 1.88% blended APY for a $100k minimum. Keesler also offers a 5-year Jumbo Certificate with an APY close to 2% (1.95%). Keesler used to be an easy membership credit union through the American Cancer Society Cancer Action Network, but now membership in this society only provides eligibility to join Keesler for residents of Alabama, Louisiana, and Mississippi.

The best short-term CD deal is currently being offered by Pen Air Federal Credit Union. In addition to a competitive 18-month CD (1.35%), it’s also offering a special 15-month add-on CD (1.25%). I had reviewed this add-on CD when the yield was 1.50%, but even with the current yield of 1.25%, this is still a very good deal.

The best short-term CD deal at banks is currently the 18-month CD (1.25%) at Pacific National Bank. Minimum deposit is $1,000.

Savings and Money Market Accounts

There is one money market account with a 2%+ yield, but there are caveats. It’s the Superior Money Market Account at Affinity Plus Federal Credit Union. One caveat is that the 2.02% APY only applies to balances up to $25k. Balances over $25k earn only 0.75%. The other caveat is that it requires a minimum monthly direct deposit of at least $500. If this requirement isn’t met, the rate falls to 0.10% for all balances.

The highest rate for a savings account or money market account that doesn’t have limitations or activity requirements is 1.40% APY. This is available on Patriot Bank’s Money Market Account. Minimum opening deposit is only $100, and there’s no minimum balance. This is a promotional rate, but this rate is currently guaranteed until 8/31/2020. Patriot Bank has a special landing page for this promotion.

Only Nationally-Available CDs Are Now Included

With CD rate cuts being so numerous, I decided to exclude the local CD rates from the CD summary. I’ll still include a couple noteworthy local CD deals that have exceptional rates and/or are available in large regions. For those cases, I’ll include a note about the availability in the comment field.

Safety of the Banking System and Your Deposits

Even though the banking industry is in a much better position now than it was in 2008, the crisis is stressing the financial system. Weak banks and credit unions will have a higher chance of failing over the next year. Thus, this is the time to be extra careful that your deposits are within the FDIC and NCUA limits.

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 2, 2020

Under 1-Year CD Rates

1-Year CD Rates

18-month CD Rates

2-Year CD Rates

3-Year CD Rates

4-Year CD Rates

5-Year CD Rates

Over 5-Year CD Rates

* BBUSA (Beal Bank USA), BHBT (Bar Harbor Bank & Trust), BWB (Bankwell Bank), ENER (Enerbank USA), FRB (First Republic Bank), FVCB (FVCBank), HBNE (Horizon Bank NE), HSTB (Homestreet Bank), JBSB (Jonesboro State Bank), MBPA (Meridian Bank PA), MFB (MidFirst Bank OK), MPSB (Mediapolis Savings Bank), MRB (Merchants Bank), MTCB (Morton Community Bank), MZTB (Mizrahi Tefahot Bank), SMB (SallieMae Bank), SNWB (Sunwest Bank)

**New To Summary, as of July 2, 2020

CDs Removed Due To Low Rates Or Expired Specials

CDs Removed, No Longer Available

None

CDs Removed, Rate Too Low