CD Rates Summary March 24, 2020

We continue to see widespread CD rate cuts as the coronavirus pandemic has forced the government to shut down large parts of the economy. More CD rate cuts should be expected as banks and credit unions continue to respond to the Fed’s emergency rate cuts that have pulled the federal funds rate back down to the zero bound. The increasing odds of a recession are also putting downward pressure on CD rates.

Not all CD rates have fallen. When there is a financial crisis, CD rates can sometimes rise as banks worry about liquidity issues and maintaining adequate deposits. We have seen a little of this, but it hasn’t been as significant as what we saw in 2008.

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. The vast majority of the changes were rate cuts with several being large cuts. However, each group had at least one modest rate hike which I included on top of each list.

Popular Online Banks:

• American Express National Bank (5yr 2.15% → 2.00%, 1yr 0.55% → 1.85%)
• Ally Bank (5yr 1.75% → 1.60%, 1yr 1.75% → 1.50%, 11m NP 1.90% → 1.55%)
• PurePoint Financial (5yr 1.25% → 0.75%, 1yr 1.45% → 1.10%, 11m NP 1.30% → 1.01%)
• Synchrony Bank (5yr 2.15% → 1.65%, 1yr 2.00% → 1.50%)
• Capital One (5yr 1.40% → 0.85%, 1yr 1.70% → 1.00%)
• Discover Bank (5yr 2.10% → 1.80%, 1yr 2.00% → 1.75%)
• Goldman Sachs Bank (5yr 2.15% → 1.90%, 1yr → 2.05% → 1.85%)

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

• Merrick Bank (2yr 1.60% → 1.95%, 1yr 1.56% → 1.86%)
• The Federal Savings Bank (5yr promo 2.00% → 2.05%)
• Bank5 Connect (24m Inv CD 1.90% → 1.25%, 12m 1.80% → 1.30%)
• Live Oak Bank (5yr 1.90% → 1.50%, 1yr 2.05% → 1.90%)
• Rising Bank (3yr Rising 1.85% → 1.20%, 18m Rising 1.85% → 1.40%)
• Banesco USA (1yr 2.15% → 1.75%, 6mo 1.75% → 1.50%)
• First National Bank of America (5yr 1.95% → 1.90%, 1yr 1.75% → 1.55%)
• Home Loan Investment Bank (5yr e-CD 2.50% → 2.00%, 30m e-CD 2.10% → 1.30%)

Credit unions that have easy membership requirements:

• Financial Partners CU (5yr Jumbo 2.55% → 2.15%, 1yr Jumbo 1.65% → 1.75%)
• Connexus CU (5yr 2.41% → 1.01%, 1yr 2.01% → 0.51%)
• Andrews FCU (7yr 2.35% → 1.60%, 5yr Jumbo 2.35% → 1.55%, 2yr Jumbo 2.15% → 1.35%)
• Hiway FCU (5yr 2.30% → 2.10%, 1yr 1.80% → 1.60%)
• TruStone Financial CU (5yr 2.25% → 2.00%, 1yr 1.50% → 1.25%)
• American 1 CU (5yr IRA 2.78% → 2.27%)
• Digital FCU (5yr Jumbo 2.38% → 1.61%)
• Keesler FCU (30m Step Jumbo 2.67% → 2.14%)
• Interior FCU (5yr Jumbo 2.52% → 1.81%)
• Veridian CU (12mo Jumbo Spc 2.20% → 1.70%)

Brokered CD Rates

Brokered CDs experienced large rate increases in the last two weeks. This is likely the result of liquidity issues and deposit concerns at the banks. However, even with these rate increases, direct CD rates at online banks and credit unions continue to have a substantial advantage.

For the non-callable brokered CDs, the top 1-year rates this morning were 1.30% at Fidelity and 1.20% at Vanguard. From two weeks ago, Fidelity is up 45 bps and Vanguard is up 55 bps.

For 5-year CDs, the top 5-year rate was 1.55% at both Fidelity and Vanguard. From two weeks ago, both are up 45 bps.

There were actually a few non-callable 10- and 7-year CDs at Fidelity and Vanguard. Rates were lower than the 5-year CD rates. The top 7-year rate was 1.30%, up 5 bps from two weeks ago at both Fidelity and Vanguard. There weren’t any non-callable 10-year CDs at Vanguard, but at Fidelity there was one with a 1.50% rate, a 45 bps increase from two weeks ago. Banks tend to offer fewer non-callable long-term brokered CDs when they think rates will fall more. Perhaps the availability of these non-callable long-term CDs is a sign that CD rates are near 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

For the top nationally available CDs, the top rates continue to fall. For 5-year CDs, the top yields are now just under 2.50%. For 1-year CDs, the top yields are right around 2.00%.

A rare new CD special was offered at the California-based Spectrum Credit Union. This special includes a 13-month Certificate (2.10% APY) and a 2-year Certificate (2.20% APY). These specials are scheduled to last until at least to the end of the month, but in today’s environment, there’s no guarantee. People from any state can join by joining a non-profit association. Please see this review of these specials for more details.

For CDs with terms close to 12 months, only two institutions with nationally available CDs are offering yields of at least 2%. In addition to Spectrum, the New Jersey-based Affinity Federal Credit Union is one. It’s offering a 14-month promotional Certificate with yields that range from 1.80% to 2.00% based on the minimum deposit. The 2.00% APY requires a minimum deposit of $100k. People from any state can join Affinity by joining an association.

The bank with the highest nationally-available 1-year CD rate is currently Live Oak Bank. Its 1-year CD earns 1.90% APY with a minimum deposit of $2,500.

For CDs with terms of 5 years, the highest nationally-available rates are now just under 2.50%. The highest yield is 2.45% at the Florida-based Achieva Credit Union. This requires a minimum deposit of $75k. People from any state can join by joining the Achieva Foundation.

Second place for 5-year CDs goes to another Florida-based credit union. Pen Air Federal Credit Union’s 5-year CD yield is currently 2.40%. It had been 2.95% for most of 2019. It fell in December to 2.60%, and it fell again earlier this month to its current yield of 2.40%. Minimum deposit is only $500. People from any state can join by joining the Friends of the Navy-Marine Corps Relief Society, Inc. Please see this review of this CD for more details.

The highest nationally-available 5-year CD yield at a bank is now 2.05%. This is available from the Chicago-based The Federal Savings Bank. Minimum deposit is $10k. For the last four months, this bank had kept the 5-year yield at 2.00%. The yield went up to 2.05% last week.

The second highest 5-year CD yield at a bank is now 2.00%. Two banks are offering this yield, Home Loan Investment Bank and American Express National Bank. Out of these two, American Express is by far the largest bank. The minimum deposit for American Express CDs is only $1, but there is a downside. The early withdrawal penalty is harsh: 540 days of interest. If you don’t want such a long term, American Express did a substantial rate hike on its 1-year CD. It now earns 1.85% APY, which places this CD just below Live Oak Bank’s top 1-year CD yield. Please see this review of the 5-year CD for more details.

Navy Federal Credit Union continues to offer a Special 17-month add-on Certificate with a 2.25% APY. Minimum deposit is $50, and the maximum balance is $75k. Additional deposits are allowed at any time, subject to the maximum balance. It’s not available inside an IRA. Navy Federal continues to offer a 37-month IRA CD special with a 3.00% APY. This only applies to IRA and ESA CDs. There’s a $50 minimum balance and a $150k maximum balance. Like the 17-month Special, additional deposits are allowed at any time, subject to the maximum balance.

Savings and Money Market Accounts

We are now down to just two savings or money market accounts with a yield of at least 2%. However, both have caveats.

The first is FitnessBank’s Fitness Savings account which continues on top as the rate leader for savings and money market account even after its 10 bp rate cut at the start of March. Its top tier APY is 2.10% for March. The issue with this account is that it requires that the customer average 12,500 steps per day for the month as measured by a step tracker app. The rate falls to 2.00% APY when the step average is between 10,000 and 12,500. The rate falls significantly for lower step averages.

The second account with a yield of at least 2% is the Superior Money Market Account from Affinity Plus Federal Credit Union. The issue with this account is that the 2.02% APY is limited to balances up to $25k. Balances over $25k earn only 1.00%. There’s also the requirement of direct deposit of at least $500 per month.

SFGI Direct holds the top spot for a low-minimum savings account with normal savings account features and requirements. Its savings account earns 1.86% APY on balances of at least $1. Minimum opening deposit is $500. The account has a long history with competitive rates that go back to 2010.

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 March 24, 2020

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

*AMEX NB (American Express National Bank), BMW (BMW Bank), CBRI (Citizens Bank RI), COBNA (Capital One Bank NA), COBUSA (Capital One Bank USA), HBNE (Horizon Bank NE), LOB (Live Oak Banking Company), MBC (Merrick Bank Corp), MBD (Medallion Bank), MRB (Merchants Bank), MRBI (Merchants Bank of Indiana), TCF (TCF National Bank), TFSB (The Federal Savings Bank), UNB (United National Bank)

**New To Summary

CDs Removed Due To Low Rates Or Expired Specials

CDs Removed, No Longer Available - Nationwide

CDs Removed, No Longer Available - Local

CDs Removed, Rate Too Low - National

CDs Removed, Rate Too Low - Local

Post Publication Edits

3/25/2020: Removed an old Westbury Bank CD rate.