CD Rates Summary - February 16, 2021

When February started, the CD summary listed no rate cuts from the major online banks. I’m afraid that wasn’t repeated. In the last two weeks, CD rate cuts occurred at Synchrony Bank and at Sallie Mae Bank. Synchrony Bank’s cuts were small, with no rate cut on its 5-year term. Sallie Mae Bank’s cuts were larger with its 5-year CD rate falling 15 bps to 0.45%.

Not all of the rate changes were cuts at the major online banks. TIAA Bank increased its CD rates in the last two weeks. The rates moved from below average to just above average. The 5-year rate is now 0.80% and the 1-year rate is now 0.50%.

Also noteworthy is a new limited-time 15-month Select CD at Ally Bank (0.65%). This rate is 5 bps higher than Ally’s 12-month and 18-month rate (0.60%).

Surprisingly, there were quite a few credit unions that did mid-month CD rate cuts. I listed more rate cuts today than I did two weeks ago when February started. Five of the credit unions that had been offering long-term CD rates above 1% had cuts that lowered their rates closer to 1%. One of the credit unions, Quorum, cut its 5-year rate far below 1% to 0.65%. It’s the first time Quorum’s 5-year CD rate has fallen below 1.00% since we began tracking Quorum in 2010. PenFed lowered its CD rates by 5 bps. Its 5-year CD rate is now 0.70%, which is 45 bps lower than the pre-2020 low of 1.15% in 2013.

We gained one 1% CD at a credit union. USALLIANCE Financial launched five new Certificate Specials with terms of 2-year (1.00%), 18-month (0.95%), 1-year (0.85%), 11-month no-penalty (0.55%) and 9-month (0.50%). These rates are much higher than USALLIANCE Financial’s standard CDs with the same terms.

It’s not quite 1%, but GreenState Credit Union’s 17-month and 8-month CD Special rates are close. Early in February, GreenState raised these rates to 0.85% and 0.80%, respectively.

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:

• TIAA Bank (5yr 0.65% → 0.80%, 1yr 0.35% → 0.50%)
• Ally Bank (15m Select 0.65% - new)
• Synchrony Bank (4yr 0.70% → 0.65%, 1yr 0.60% → 0.55%)
• Sallie Mae Bank (5yr 0.60% → 0.45%, 1yr 0.50% → 0.45%)

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

• MutualOne FCU (61m 0.90% → 0.70%, 18m 0.75% → 0.50%, 1yr 0.65% → 0.60%)
• Comenity Direct (1yr 0.60% → 0.63%)
• Banesco USA (2yr 0.60% → 0.50%, 1yr 0.70% → 0.40%)
• Popular Direct (1yr 0.30% → 0.25%)

Credit unions that have easy membership requirements:

• Hiway FCU (5yr 1.35% → 1.25%, 1yr 0.80% → 0.75%)
• Financial Partners CU (5yr Jbo 1.30% → 1.25%, 1yr Jbo 0.65% → 0.60%)
• Evansville Teachers FCU (6yr 1.20% → 1.15%, 5yr 1.15% → 1.04%, 1yr 0.70% → 0.60%)
• Greenwood CU (5yr 1.10% → 1.00%, 1yr 0.75% → 0.60%)
• AFFCU (7yr 1.15% → 1.00%, 5yr 0.95% → 0.80%, 1yr 0.75% → 0.60%)
• GreenState CU (17m Spc 0.70% → 0.85%, 8m Spc 0.65% → 0.80%)
• USALLIANCE Financial CU (5yr 0.90% → 0.85%, 18m 0.70% → 0.95%, 1yr 0.70% → 0.85%)
• PenFed CU (7yr 0.80% → 0.75%, 5yr 0.75% → 0.70%, 1yr 0.50% → 0.45%)
• Spectrum CU (5yr 0.85% → 0.75%, 1yr 0.75% → 0.65%)
• Latino CU (5yr 0.95% → 0.65%, 1yr 0.75% → 0.50%)
• Quorum FCU (5yr 1.01% → 0.65%, 1yr 0.50% → 0.40%)

Brokered CD Rates

Early in January, there were substantial rate gains on long-term brokered CDs. Gains didn’t continue at the start of February, but there were a few today. The top 5-year non-callable CD rates at Fidelity and Vanguard were 0.65% and 0.60%, respectively. Both had a rate of 0.45% two weeks ago. There were also modest rate gains on the top 4-year CDs. The top 10-year non-callable CD rate continues to be 1.35% at both Fidelity and Vanguard.

For the last year, all of the top non-callable brokered CD rates were well below the top direct CD rates for their respective maturities. That has now changed. A 10-year brokered CDs listed at Vanguard and Fidelity (1.35% APY) now top the list of nationally-available CDs with terms of six years and longer.

For short-term brokered CDs with terms of 1-year and under, rates remain very low. At both Fidelity and Vanguard, the top rates were either 0.05% or 0.02%.

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.

Long-dated Treasury yields had big gains in January as the odds increased for more and larger fiscal stimulus. 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 month, long-term brokered CD rates have been on the rise.

Direct CD Rates and Deals

For the 5-year CD category, Affinity Plus Federal Credit Union’s 5-year CD continues to be on top with a 1.50% APY. Barksdale FCU’s 5-year CD (1.45% APY) remains in second place and Advancial Credit Union’s 5-year Jumbo CD (1.41% APY) remains in third place. All three held rates unchanged into February.

The top nationally available 5-year CD rate from a bank is only 1.00% APY. This is available at the following three small banks: First National Bank of America, Hyperion Bank, and State Bank of India in New York.

For shorter-term CDs, Advancial Credit Union’s Jumbo CDs primarily hold the top spots. Advancial hasn’t always made it easy to join and open CDs. Based on info received from Advancial in November, people in any state can still join the association Connex to qualify for Advancial membership. Also, new CDs are available to new members. I have more details in this Advancial CD review.

Close behind Advancial Jumbo CDs are the new CD Specials from USALLIANCE Financial. These include a 1-year CD (0.85%), an 18-month CD (0.95%) and a 2-year CD (1.00%). Minimum deposit is only $500. I’ll have more on these CDs soon. Thanks to DA reader cumulus for posting on these specials in the DA Forum.

Another good credit union CD special is available at Pennsylvania-based Freedom Credit Union. It’s offering a 3-year CD with a 1.50% APY. Unfortunately, this isn’t nationally available. However, residents of DE, MD, NJ, PA, VA, WV, and DC can join via an association membership. More details on this CD Special and on the credit union are available in this blog post. Thanks to DA reader alan1 for posting on this deal in the DA Forum.

Savings and Money Market Accounts

There are currently only three institutions with liquid accounts that offer yields of at least 1.00% without any small maximum balance, activity/checking requirements or unusual withdrawal limitations.

Two of these three are the same two accounts that I reported two weeks ago. The other one I just reported on last week. It’s 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.

Another of the three is a fintech. This fintech is T-Mobile Money, and 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.

Early in December, two other fintechs had been in the 1% group, but both had large rate cuts. Chime’s savings account rate was slashed from 1.00% to 0.50%, and Affirm’s savings account was slashed from 1.00% to 0.65%.

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.

There’s also one easy-membership credit union that is offering an IRA savings account with a 1% APY. It’s U.S. Postal Federal Credit Union, and its IRA savings account rate has never fallen below 1% since we began tracking the account in 2011.

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

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 February 16, 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

* BBSSB (Beal Bank SSB), BBUSA (Beal Bank USA), BMW (BMW Bank), BRGW (Bridgewater Bank), DMB (DMB Community Bank), FFOH (FIrst Financial Bank OH), FLAG (Flagstar Bank FSB), FNB (First National Bank), HSTB (Homestreet Bank), ISDB (Israel Discount Bank), LOB (Live Oak Banking Company), LUASB (Luana Savings Bank), MBC (Merrick Bank Corp), MFB (MidFirst Bank OK), PCB (Pacific City Bank), SAFB (Safra Bank), SBoI (State Bank of India), SBoIIL (State Bank of India IL)

**New To Summary, as of February 16, 2021

CDs Removed Due To Low Rates Or Expired Specials

CDs Removed, No Longer Available

CDs Removed, Rate Too Low