1. The bank refuses to allow an early withdrawal
2. The bank increases the early withdrawal penalty on your existing CD

I reviewed the issue of banks refusing an early withdrawal in November. About the risk of banks increasing the early withdrawal penalties on existing CDs, there have been two cases of this at credit unions. The last one was in January. Don't forget there's also a risk that rates continue to fall and stay low for many years.

My last comparison was done in January of four nationally available long-term CDs. Three of the four CDs remain the same except for slight rate changes. These include Discover Bank's 10-year CD (w/o AAA bonus), PenFed's 7-year CD and Ally Bank's 5-year CD (w/o renewal bonus). I removed the 5-year CD at Digital Credit Union (DCU) due to a large rate cut. I replaced that with the 6-year CD at INOVA Federal Credit Union. Like PenFed and DCU, INOVA FCU makes it easy for anyone to join (see my review).

All of these four institutions have reasonable early withdrawal penalties.

According to Discover Bank's FAQs, the penalty for terms over 5 years is "9 months simple interest on the amount withdrawn".

PenFed's disclosure states that certificates with a term of 5 years or greater that are redeemed after 365 days will have an early redemption penalty of "dividends for the most recent 365 days." If closed before 365 days, all dividends will be forfeited which means that the penalty won't eat into the principal.

Ally Bank continues to have the smallest early withdrawal penalty for 5-year CDs. The penalty is equal to just 60 days of interest. Details are listed in the deposit agreement which is available at Ally's legal information page.

The early withdrawal penalty of the 6-year CD at INOVA Federal Credit Union is 180 days of interest. This is based on what I've been told by the credit union service representative. A reader also reported that he confirmed this in the disclosure. Unfortunately, the disclosure isn't available online.

Below is a comparison of the four CDs. The table shows the yields for each year after the CD is opened. These yields take into account the loss from the early withdrawal penalty. As you can see, Ally continues to be the best deal if you close the CDs within one year. For the case of PenFed, you will lose all interest if you close the CD within one year.

If you close the CD at or after 2 years, INOVA FCU takes the top spot until year 7 when the PenFed CD matures.

The early-withdrawal yields listed below are based on the spreadsheet developed by Bogleheads forum members. It's available from the Bogleheads Wiki: Comparing CDs. It should be noted that the following simple formula comes very close to this spreadsheet:

Post Penalty APY = (Full APY) x (D - P) / D

D = days into term when the CD was closed.
P = days of the early withdrawal penalty

These CD rates are based on the rates listed at the institutions' websites as of 2/27/2012:

Approximate Yields After Early Withdrawal Penalties

Searching for Top CD Rates

To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.

The credit union's Clearly Better Savings Certificate is a CD with some nice features. First, it gives members the opportunity to "bump up" to the latest rate once per term. According to the credit union's disclosure, the early withdrawal penalties for an accounts with terms of one year or more is "equal 90 days dividends or $10 which ever is greater on the amount withdrawn subject to penalty." Also, the disclosure clearly states that early withdrawals are allowed: "You may make withdrawals of principal from your account before maturity. Principal withdrawn before maturity is included in the amount subject to early withdrawal penalty." Some institutions state that early withdrawals are only allowed if they consent.

Based on the credit union's membership page, it appears eligibility had been limited primarily to employees of Ralphs or Food 4 Less grocery stores plus a few other companies. However, they now include a way for anyone in Southern California to qualify. Members of Clear Giving Charitable Association are eligible to join the credit union. According to the Clear Giving Charitable Association page, any individual living in Southern California is eligible to join the association. Annual membership dues is $5.

The credit union has an online application that allows people to join and to open accounts including the CDs.

Clearpath Credit Union branches are located in the Southern California cities of Glendale, Compton, Moreno Valley and Fontana. Clearpath is also part of the CU Service Centers shared branch network.

The credit union has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 3.59% based on September 2011 data. Please refer to our financial overview of Clearpath Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 9556).

How This CD Rate Compares

The best 5-year CD rate that's nationally available is 2.30% APY at Andrews Federal Credit Union. This has an early withdrawal penalty of 6 months of interest, but the credit union also gives itself the right to refuse an early withdrawal (see review). Pentagon Federal Credit Union is close behind with a 2.25% APY. PenFed's 5-year CD has an early withdrawal penalty of up to 12 months of interest. These rates are accurate as of 2/27/2012.

Searching for the Best CD Rates

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.

Last year it had good deal on its Fast Start savings account, but its special rate now is only 0.55%.

It appears that a branch visit is required to open accounts at Start Community Bank. Branches are located in New Haven, Connecticut at 299 Whalley Ave. and at 258 Grand Avenue. Before driving a long distance, it's always best to call and confirm you can qualify.

It's a new bank that was established in December 2010. The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) based on September 2011 data. Please refer to our financial overview of Start Community Bank for more details. The bank has been a FDIC member since 2010 (FDIC Certificate # 58952).

How These CD Rates Compare

For nationally available CDs with terms around 18 months, the best rate is 1.20% APY at KeySource Commercial Bank and Incredible Bank (19 months).

For CDs with terms between 2 and 3 years, the best rates are 1.81% APY for a 25-month CD special at Farmers State Bank and 1.86% APY for a 3-year CD at Melrose Credit Union.

These rates are accurate as of 2/27/2012.

Searching for the Best CD Rates

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.

So far, however, the effects of the recent run-up seem to be muted. Consumer confidence is building, new claims for unemployment benefits are at a nearly four-year low and the moribund housing market is showing tentative signs of improvement.

Of course if another Middle East crisis causes prices to reach new record levels, an economic slowdown will be more likely.

Treasury yield changes were mixed this week. Short-term yields went up a little while long-term yields fell slightly. The summary of the yields is shown below (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)

Treasury Yields:

• 6-month: 0.12% up from 0.10% last week
• 2--year: 0.30% up from 0.29% last week
• 5--year: 0.87% up from 0.86% last week
• 10-year: 1.97% down from 2.00% last week
• 30-year: 3.10% down from 3.14% last week

Fed funds futures' implied probability for a higher rate by:

• Dec 2013: 47.2% down from 49.0% last week
• Sep 2014: 81.9% up from 79.4% last week

After skipping last Friday, the FDIC was back in action this Friday with two bank failures. One of the banks that closed, Home Savings of America with branches in Minnesota and California, was the first bank since January 2011 that did not have a buyer to assume all deposits. Thus, the FDIC will be mailing checks for the insured deposits. Deposits over the FDIC limits may be lost.

The total number of bank failures for the year is now at 11. This time last year there were 23.

Savings & Checking Account Rates

The big news for savings accounts this week was TIAA-CREF's new internet bank, TIAA Direct. It's offering an online savings and money market account that currently pays 1.25% APY on all balances. That puts it in the lead for the highest rate of a liquid account without balance caps and monthly usage requirements.

Unfortunately, readers have reported various issues. First, several readers have reported that their applications have be rejected. From my latest conversation with a TIAA Direct CSR, I was told that they recently opened up account openings to the general public. Previously, it had been limited to TIAA-CREF employees. This might be why readers have reported being told of the employee limitation. The CSR claimed application rejections may have been due to new applicants failing their automatic ID verification. Readers have speculated it may be due to low credit scores or too many ChexSystems inquiries.

For more information on TIAA Direct, please refer to my TIAA Direct blog post which includes my updates and readers comments.

Another worry about TIAA Direct is how the rates will hold up. As is typical, the rates are subject to change at anytime. It's possible that even if TIAA Direct doesn't intend to be long-term rate leader, it could be planning to keep the 1.25% APY in effect for several months. If that's their plan, this could be a good short-term deal. That's what happened at UFB Direct. When Bank of Internet USA launched UFB Direct last summer, it offered a savings account with a very competitive 1.30% APY which held for over 5 months. However, the rate has been plummeting over the last five weeks. It fell again this week, and now the rate is only 0.85%.

Reward Checking Accounts

Don't forget that there's another internet bank that offers 1.25% APY without a balance cap. It's Bank of Internet's Rewards Checking account. Unlike TIAA Direct, Bank of Internet has a long history. So there should be fewer surprises in the application or in the account management. The 1.25% APY has held since July 2011, so that also has some history. The downside with BofI's Rewards Checking account is that it has monthly usage requirements. If you don't meet those requirements, the rate will be much lower. On the plus side, those usage requirements may help BofI to be able to maintain this 1.25% APY.

If 1.25% APY isn't high enough, you'll have to live with balance caps. For a $50K balance cap, you can get 1.50% APY at North Country Savings Bank. For a $25K balance cap, you can get 2.52% APY at ABCO Federal Credit Union. For a $20K balance cap, you can get 3.00% APY at INOVA Federal Credit Union, and for a $10K balance cap, you can get 4.09% APY at Consumers Credit Union (guaranteed to June 30, 2012). You can see the full list of nationally available reward checking accounts below. Please note that banks have often reduced availability of these accounts. Please check with the institution for the latest application restrictions.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can be used to find accounts available nationwide and accounts with higher rates in your state. If you're new to these tables, my new rate table guide should be useful, and if you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should also be useful.

Additions:

1. TIAA Direct Savings/MMA - 1.25% (YMMV)

Rate Hikes:

1. Nationwide Bank MMA - 0.86% [was 0.85%]

Rate Cuts:

1. UFB Direct Savings - 0.85% [was 0.90%]
2. American Express Savings - 0.75% [was 0.90%]

Certificate of Deposit Rates

My recap of CD rate changes and the list of CD deals will now be in my survey of the best CD rates. This recap will now focus on banking news of the week and liquid accounts.

Recap for the Week - Links to This Week's Posts

• What the New 401(k) Rules Mean for You
• Two Banks Closed by Regulators, FDIC Unable to Find Buyer for One
• FDIC's Consumer News: Tips for Small Businesses & Consumers Denied Checking Accounts
• ING Direct Reveals More News on Its Acquisition by Capital One
• Ally Bank Offers Free Anti-Malware Software

• Another Rate Cut at UFB Direct - Lessons for Rate Chasers?
• TIAA-CREF Launches New Internet Bank with Top Savings Account Rate

• Survey of the Best CD Rates for February 24, 2012

• $120 Checking Account Bonus at Bank Mutual - Wisconsin Only
• Kindle Fire Checking Bonus at Fulton Financial Family of Banks in VA, MD, DE, PA & NJ - Local Only

• No new posts this week

• Top 1-Year IRA CD Rate in Florida at City County Credit Union
• Special Savings & CD Rates at Lyon National Bank in New York - Local Only
• Bank Deals Continue at Morrill & Janes Bank - MO & KS Only

• Archive of 2012 Posts

Rates as of February 25, 2012

Checking/Savings/Money Market Accounts:

• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• TIAA Direct - 1.25% MMA/Savings (YMMV) account review
• Flagstar Bank - 1.15% savings (4-month promo) promo review
• MyBankingDirect - 1.15% (min $5K) promo rate
• AmTrustDirect - 1.15% (min $5K) promo rate
• Incredible Bank - 1.05% MMA ($2.5K min) account review
• Incredible Bank - 1.01% Checking ($1K min) account review
• Alliant Credit Union - 1.00% (min $100) Savings account review
• Salem Five Direct - 1.00% savings (guaranteed thru Aug statement cycle)
• Alliant Credit Union - 0.95% Checking (req's elec. dep & e-stmts) account review
• One United Bank - 0.95% ($100K) 0.85% ($1K) E-Money Market
• Clear Sky Accounts - 0.95% (max $250K) account review
• SFGI Direct - 0.91% account review
• Capital One/Costco - 0.90% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.82% (w/o bonus) account review
• Sallie Mae Bank - 0.90% MMA account review
• ING Direct - 0.90% ($100K) 0.85% ($50K) Electric Orange Checking
• Discover Bank - 0.90% Savings (min $500) account review
• Nationwide Bank - 0.86% MMA (min $1K)
• Sallie Mae Bank - 0.85% Savings account review
• Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
• UFB Direct (Bank of Internet) - 0.85% Savings account review
• Ally Bank - 0.84% MMA/savings account review
• CNB Bank Direct - 0.80% account review
• ING Direct - 0.80% Orange Savings
• HSBC Advance - 0.80% Savings
• American Express Bank - 0.75%, account review
• Capital One - 0.71% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.65% (w/o bonus) account review
• Capital One - 0.60% Checking (rate guaranteed for 1 yr) account review

Reward Checking Accounts:

• Best Reward Checking Account Rates for a $10,000 Balance - Nationally Available
• Best Reward Checking Account Rates for a $25,000 Balance - Nationally Available

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• Consumers Credit Union - 4.09% (up to $10K) 0.56% ($10K-$25K) 0.35% ($25K+)
• Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
• INOVA Federal Credit Union - 3.00% (up to $20K) 0.30% ($20K+)
• ABCO Federal Credit Union - 2.52% (up to $25K) 0.50% ($25K+)
• First Security Bank & Trust - 2.30% (up to $15K) 0.60% ($15K+)
• Pacific Resource Credit Union - 2.27% (up to $15K) 0.50% ($15K+)
• Provident Credit Union - 2.26% (up to $25K) 0.31% ($25K+)
• Community Bank of Pleasant Hill - 2.01% (up to $25K) 0.50% ($25K+)
• Community Bank of Raymore - 2.01% (up to $25K) 0.50% ($25K+)
• Bank of Blue Valley - 2.00% (up to $25K) 0.35% ($25K+), $1K/month debit card req (account review)
• Connexus Credit Union - 2.00% (up to $25K) 0.50% ($25K+)
• Heritage Bank - 1.71% (up to $25K) 0.10% ($25K+)
• Avidia Bank - 1.66% (up to $25K) 0.10% ($25K+)
• First New England Federal Credit Union - 1.52% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
• Atlantic Coast Bank - 1.50% (up to $15K) 0.50% ($15K+)
• North Country Savings Bank - 1.50% (up to $50K) 0.75% ($50K+)
• State Bank of Toledo - 1.31% (up to $25K) 0.20% ($25K+)
• West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
• Bank of Internet USA - 1.25% (all balances)

Certificates of Deposit:

• Best CD Rates (Nationwide & by State)
• Best IRA CD Rates (Nationwide & by State)

• How to View Rates for Your State

• Survey of the Best CD Rates for February 24, 2012 (Nationwide & Local)

Various Deposit Account Deals

• Bank Promotions
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

Bank Account Alternatives

• Ford Interest Advantage - 1.25% rate for $50k+, Ford Interest Advantage review
• GE Interest Plus - 1.10% rate for $50k+
• Vanguard Tax-Exempt Money Market Fund - 0.05% 7-day yield
• Vanguard Prime Money Market Fund - 0.04% 7-day yield
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• PayPal Money Market Fund has ended effective 7/29/11
• FW Thread on Treasury Bills
• Series I Savings Bonds for November 2011, I Bond Article, I Bonds as CD Alternatives

For one thing, there are higher contribution limits for 2012. You can sock away $17,000, up from $16,500 in 2011, in your 401(k), 403(b) and the federal government's Thrift Savings Plan. However, catch-up contribution limits for those 50 and over stand still at $5,500.

Every dollar you contribute to your 401(k) or other employer-sponsored plan is tax-deductible. The more you contribute, the smaller your tax bill.

Another change that's all the chatter, is the rules requiring increased transparency around fees. "Better fee and conflict of interest disclosure will finally put buried costs and hidden relationships on the table for all to see and compare," says Jeff Acheson, a partner with Schneider Downs Wealth Management Advisors. "Daylight will be a great antiseptic and help prevent egregious fees and self-serving relationships from inhibiting the realization of satisfactory compound rates of returns within participants' account."

In the era of double digit returns, fees that were higher than industry standards were not a focal point as they were considered non-consequential and offset by high rates of return, he argues. But now, facing a period of time where investors' account performance may very well be measured by single digit results, the difference in fees may well make all the difference between achieving satisfactory outcomes or retiring with inadequate resources. "High fees that are undetected within complicated legal documents and products are a bit like undiagnosed high blood pressure, initially you don't necessarily see or feel, but the affliction over time if left untreated, it will kill you," says Acheson.

The hope is that transparency will lead to more competitive pricing, improved investment selection and lower fees, points out Mitchell Kauffman, a certified financial planner with Kauffman Wealth Services. Fees are huge in the retirement savings equation. While contributions to your account and the earnings on your investments will increase your retirement income, fees and expenses paid by your plan may substantially reduce the growth in your account. The following example from the U.S. Department of Labor demonstrates how fees and expenses can impact your account. Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.

There are a lot of unknowns regarding the new disclosure rules, but what is clear is that service providers for plans will now be more exposed than ever in terms of what they are charging. The results of this 'exposure' are yet to be seen, says Holly Danzinger, a pension consultant with Karel-Gordon & Associates.

However, plan participants will not see a full comparison of plan and investment fees until November.

Remember too, that while fees are important, there are other considerations. "The fee should not be your biggest concern. The returns should be. A poorly performing return with a low fee, is worse than a higher fee on a screaming return," says Grant Cardone, author of The 10X Rule: The Only Difference Between Success and Failure.

There is also a proposal that would allow workers to convert a portion of their 401(k) savings into an annuity, and also allows for the creation of a "longevity annuity" for retirement savings. With a "longevity annuity," also know as "deferred fixed annuity," retirees can take part of a lump sum distribution at age 65 and defer it for 20 years. That could save them an enormous amount of money, says Ty J. Young, president of financial advisory firm Ty J. Young. Converting a portion of a 401(k) to an annuity, could go a long way in dealing with the very real prospect of outliving your money.

So what can you do now? Employers will still have control over these decisions, but you can make your voice heard about fees and ask more questions. You can also do a little homework on your own. Brightscope is an independent provider of retirement plan ratings and analysis, you can get a report now to see how your plan stacks up. Take advantage of any financial education offered by your employer or push them to provide such services. Mostly though, max out your investment, especially if you're over 50.

There's much change on the horizon. Be ready to capitalize on them.

For the first time since January 2011, the FDIC wasn't able to find a buyer of a failed bank. Home Savings of America which was based in Minnesota with branches in California has been shut down by the FDIC. When the FDIC can't find a buyer, those with deposits over the FDIC limit may lose their uninsured deposits. According to the FDIC:

The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers.

For insured deposits, the FDIC will be mailing checks to the depositors. Those checks should include both the principal and accrued interest up to the day of closure.

The other bank failure was typical of the closures over the last year. Central Bank of Georgia was closed, and all of its deposits were assumed by Ameris Bank. The only concern of Central Bank depositors is if their CD rates will be lowered. The FDIC included its typical note regarding future interest rates:

Interest on deposits accrued through close of business on February 24, 2012 will be paid at your same rate. Central Bank of Georgia's rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with the new bank.

Credit Union Liquidations

On February 19th, The NCUA issued a rare Sunday press release on the liquidation of People for People Community Development Credit Union (CDCU) of Philadelphia. This was the second credit union liquidation of the year. The NCUA had placed this tiny credit union in conservatorship on January 6th. This gave depositors over a month to ensure all of their deposits were under the NCUA limits. So hopefully, no members had any uninsured deposits at the time of liquidation.

The NCUA placed A M Community Credit Union of Wisconsin into conservatorship last Friday. This is a larger credit union with 16,000 members and $125 million in assets. So it's likely that some members may have uninsured deposits. Those members would be wise to adjust their accounts so all of their deposits are insured. It's common for credit unions placed into conservatorship to be eventually liquidated, as was the case with that Philly credit union. When a credit union is liquidated, uninsured deposits may be lost if the credit union isn't acquired by another credit union.

This conservatorship process is unique to credit unions. Going into conservatorship has no effect on deposits. Members continue to have full access to all of their deposits, even those over the NCUA limit. This gives members a chance to adjust their uninsured deposits so that all of their deposits are insured. In fact, the credit union is likely to contact members with uninsured deposits to warn them. However, there's no guarantee of the notification. There was an interesting case reported by the Credit Union Times on this issue.

Below is the summary of Friday's bank failures and the recent credit union liquidation.

• Closed Bank: Central Bank of Georgia, Ellaville, GA
• FDIC Press Release
• Size: 5 branches, $278.9 million in assets and $266.6 million in deposits
• Acquiring Bank: Ameris Bank, Moultrie, GA
• Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Ameris Bank
• Rate Changes: Central Bank of Georgia's rates will be reviewed by the new bank and may be lowered (FDIC's Q&A)
• Estimated Cost to Deposit Insurance Fund: $67.5 million
• Enforcement Action: FDIC 12/3/09 Consent Order
• Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 234.76% at DepositAccounts.com (see financial rating note)

• Closed Bank: Home Savings of America, Little Falls, MN
• FDIC Press Release
• Size: 4 branches, $434.1 million in assets and $432.2 million in deposits
• Acquiring Bank: None
• Possible Uninsured Deposits: The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers
• Rate Changes: The FDIC will mail directly to depositors of Home Savings of America, checks for the amount of their insured money
• Estimated Cost to Deposit Insurance Fund: $38.8 million
• Enforcement Action: OTS 6/2/10 C&D Order, OCC 12/16/11 PCA Order
• Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 348.04% at DepositAccounts.com (see financial rating note)

2nd Credit Union Liquidation of 2012 (Feb 19)

• Liquidated CU: People for People Community Development Credit Union (CDCU) of Philadelphia
• NCUA Press Release
• Conservatorship Date: January 6, 2012
• Size: 1,600 members and had assets of approximately $635,000
• Acquiring CU: TruMark Financial Credit Union, Trevose, PA

2nd Credit Union Placed into Conservatorship in 2012 (Feb 17)

• Conserved CU: A M Community Credit Union, Kenosha, WI
• NCUA Press Release
• Size: 16,000 members and $125 million in assets

References:

• FDIC list of failed banks
• Texas Ratios for banks and credit unions
• Latest FDIC info on deposit insurance
• My bank failure review posts
• Review of the 2011 bank and credit union failures
• Review of the 2010 bank and credit union failures
• 10 Lessons from the 2008 bank failures

Local CD Deals

One of the credit union rate leaders actually raised its CD rates this week. San Antonio Credit Union (SACU) raised its 10-year CD yield from 3.35% to 3.55%. Its 7-year CD yield increased from 2.85% to 3.05%. These require a $90K minimum deposit. Rates are about 5 basis points lower for a $10K minimum.

I added two institutions to my 1-year CD list this week. Both are offering special 1-year CDs with very competitive rates. Lyons National Bank in New York is offering a special 2.00% APY 1-year CD. Similar to Farmers State Bank above, this requires a checking account with direct deposit. The other institution is City County Credit Union in Florida. It's offering a 1-year IRA CD with a 1.51% APY. Unfortunately, this special rate only applies to the IRA CD.

With the Fed's commitment to keep rates near zero until at least late 2014, banks and credit unions may be more willing to offer short-term CD deals than long-term CD deals. When those CDs mature, I'm sure the institutions are hoping the customers will let their CD rates roll over into new CDs with regular rates.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest penalty, it's still a good deal when closed early even with the recent rate cuts.

The risks of planning for early withdrawals of long-term CDs was recently highlighted by another credit union which raised the early withdrawal penalty on existing CDs. The credit union is CEFCU which is based in Illinois. I have more details in this blog post. CEFCU is now the second credit union which has raised the early withdrawal penalty on existing CDs. Last year Fort Knox FCU did the same thing (see my blog post).

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. This CD survey blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The CD survey blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but most of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available in large areas of a state.

Yields Accurate as of February 24, 2012

Under 1-Year CD Rates

• Ally Bank - 1.16% (1.74% 5-year CD closed after 6 months, see review & risks)
• KeySource Commercial Bank - 1.00% 7-month CD special, see account review
Ally Bank - 0.91% 11-month No-Penalty CD, see account review
• AloStar Bank of Commerce - 0.85% 6-month CD

• Noteworthy Local Deals

• University of Iowa Community Credit Union - 1.45% ($250K) 1.35% ($100K) 1.25% ($1K) 10-month CD (several parts of Iowa)
• Miami Postal Service Credit Union - 1.26% ($25K) 9-month CD (Southeast FL)
• Veridian Credit Union - 1.11% ($100K) 0.90% ($1K) 7-month CD (several parts of Iowa)
• First Choice Bank - 1.05% ($50K) 1.00% ($2.5K) 288-day CD (Los Angeles & Orange County, CA)
• American Plus Bank - 0.95% 6-month CD (Los Angeles metro)
• CapitalSource Bank - 0.95% 8-month CD (California)
• Industrial Credit Union - 0.90% 6-month CD (Boston metro area)

1-Year CD Rates

• Ally Bank - 1.45% (1.74% 5-year CD closed after 1 year, see review & risks)
• Pentagon Federal Credit Union - 1.16% 1-year CD
• KeySource Commercial Bank - 1.15% 1-year CD, see account review
• Doral Bank Direct - 1.15% 1-year CD
• CIT Bank - 1.08% ($25K min) add-on & bump-up 1-year CD

• Noteworthy Local Deals

• Lyons National Bank - 2.00% 1-year CD (with checking and DD) (between Rochester & Syracuse, NY)
• Community Trust Bank - 1.65% (w/dd) 1.40% (w/chk) 1.15% 13-month CD, review (parts of TX, LA & MS)
• City County Credit Union - 1.51% 1-year IRA CD (many FL counties)
• Gulf Coast Credit Union - 1.50% 12-month CD (Corpus Christi, TX metro)
• General Electric Credit Union - 1.42% ($100K) 1-year CD (Cincinnati OH metro)
• University of Iowa Community Credit Union - 1.35% ($250K) 1.25% ($100K) 1.15% ($1K) 13-month CD (several parts of Iowa)
• El Paso Area Teachers FCU - 1.31% ($50K) 1.21% ($500) 1-year CD (El Paso, TX)
• Dupaco Community Credit Union - 1.30% 15-mo CD (parts of IA, IL & WI)
• First American Credit Union - 1.26% ($50K) 1-year CD (south of Phoenix, AZ)
• LOMTO Federal Credit Union - 1.20% 1-year CD (parts of New York City)
• Our Community Credit Union - 1.20% 1-year CD (Washington State)
• Harris County Credit Union - 1.16% ($95K) 1-year CD (Houston)
• American Plus Bank - 1.16% 1-year CD (Los Angeles metro)
• First Choice Bank - 1.15% ($50K) 1.10% ($2.5K) 366-day CD (Los Angeles & Orange County, CA)

18-month CD Rates

• Ally Bank - 1.55% (1.74% 5-year CD closed after 18 months, see review & risks)
• KeySource Commercial Bank - 1.20% 18-month CD, see account review
• Incredible Bank - 1.20% 19-month CD
• Alliant Credit Union - 1.15% ($1K min) 18-month CD

• Noteworthy Local Deals

• Gulf Coast Credit Union - 1.65% 18-month CD (Corpus Christi, TX metro)
• El Paso Area Teachers FCU - 1.46% ($50K) 1.36% ($500) 18-month CD (El Paso, TX)
• Veridian Credit Union - 1.45% ($100K) 1.25% ($1K) 15-month CD (several parts of Iowa)
• Department of Commerce FCU - 1.45% 18-month CD (Washington DC)
• First Choice Bank - 1.30% ($50K) 1.25% ($2.5K) 541-day CD (Los Angeles & Orange County, CA)
• Cross River Bank - 1.25% 18-month CD (NJ in NYC metro area)

2-Year CD Rates

• Farmers State Bank - 1.81% 25-month CD (checking required) Update 2/27/12: Now local to parts of Indiana only
• Ally Bank - 1.59% (1.74% 5-year CD closed after 2 years, see review & risks)
• Pentagon Federal Credit Union - 1.37% (2.76% 7-year CD closed after 2 years, see review & risks)
• Melrose Credit Union - 1.36% 2-year CD
• Alliant Credit Union - 1.30% ($1K min) 2-year CD
• CIT Bank - 1.26% ($25K min) add-on & bump-up 2-year CD
• KeySource Commercial Bank - 1.25% 2-year CD, see account review

• Noteworthy Local Deals

• Gulf Coast Credit Union - 1.85% 2-year CD (Corpus Christi, TX metro)
• University of Iowa Community Credit Union - 1.85% ($250K) 1.75% ($100K) 1.65% ($1K) 22-month CD special (several parts of Iowa)
• Veridian Credit Union - 1.80% ($100K) 1.60% ($1K) 25-month CD (several parts of Iowa)
• Department of Commerce FCU - 1.65% 2-year CD (Washington DC)
• Harris County Credit Union - 1.51% ($95K) 1.21% ($2.5K) 2-year CD (Houston)
• Our Community Credit Union - 1.50% 2-year CD (Washington State)
• Cross River Bank - 1.50% 2-year CD (NJ in NYC metro area)
• LOMTO Federal Credit Union - 1.50% 2-year CD (parts of New York City)
• First American Credit Union - 1.41% ($50K) 2-year CD (south of Phoenix, AZ)
• Wings Financial Credit Union - 1.41% 2-year CD (Seattle & Minneapolis Metro areas)
• mBank - 1.40% 2-year CD (parts of Michigan)

3-Year CD Rates

• Melrose Credit Union - 1.86% 3-year CD
• Pentagon Federal Credit Union - 1.83% (2.76% 7-year CD closed after 3 years, see review & risks)
• Ally Bank - 1.64% (1.74% 5-year CD closed after 3 years, see review & risks)
• AmTrustDirect - 1.55% 3-year CD
• KeySource Commercial Bank - 1.50% 3-year CD, see account review

• Noteworthy Local Deals

• El Paso Area Teachers FCU - 2.37% ($50K) 2.27% ($500) 36 & 30-month CD (El Paso, TX)
• NavyArmy Federal Credit Union - 2.25% 30-month CD (Corpus Christi, TX metro)
• University of Iowa Community Credit Union - 2.20% ($250K) 2.10% ($100K) 2.00% ($1K) 37-month CD (several parts of Iowa)
• Veridian Credit Union - 2.10% ($100K) 1.90% ($1K) 39-month CD (several parts of Iowa)
• Department of Commerce FCU - 2.05% 3-year CD (Washington DC)
• Leominster Credit Union - 2.00% 3-year CD (parts of MA)
• Our Community Credit Union - 2.00% 3-year CD (Washington State)
• Cross River Bank - 2.00% 3-year CD (NJ in NYC metro area)
• Institution for Savings - 2.00% 3-year CD (northeast MA)
• SPCO Credit Union - 1.97% ($50K) 1.76% ($1K) 3-year CD (Houston, TX)
• Dupaco Community Credit Union - 1.91% 35-mo CD (parts of IA, IL & WI)
• Wings Financial Credit Union - 1.86% 3-year CD (Seattle & Minneapolis Metro areas)
• LOMTO Federal Credit Union - 1.85% 3-year CD (parts of New York City)
• EBSB Direct - 1.80% 3-year internet CD (New England & New York State)
• First American Credit Union - 1.76% ($50K) 3-year CD (south of Phoenix, AZ)
• mBank - 1.75% 3-year CD (parts of Michigan)
• Florida Credit Union - 1.61% 3-year CD special (North Central FL)
• First Choice Bank - 1.60% ($50K) 1.55% ($2.5K) 3-year CD (Los Angeles & Orange County, CA)

4-Year CD Rates

• Melrose Credit Union - 2.07% 4-year CD
• Pentagon Federal Credit Union - 2.06% (2.76% 7-year CD closed after 4 years, see review & risks)
• Andrews Federal Credit Union - 2.05% 4-year CD
• KeySource Commercial Bank - 1.75% 4-year CD, see account review
• Nationwide Bank - 1.70% ($100K) 1.65% ($500) 4-year CD

• Noteworthy Local Deals

• Department of Commerce FCU - 2.50% 4-year CD (Washington DC)
• University of Iowa Community Credit Union - 2.35% ($250K) 2.25% ($100K) 2.15% ($1K) 49-month CD (several parts of Iowa)
• SPCO Credit Union - 2.32% ($50K) 2.02% ($1K) 4-year CD (Houston, TX)
• First General Credit Union - 2.25% 4-year CD (Grand Rapids, MI metro)
• Cross River Bank - 2.25% 4-year CD (NJ in NYC metro area)
• mBank - 2.25% 4-year CD (parts of Michigan)
• Our Community Credit Union - 2.15% 4-year CD (Washington State)
• LOMTO Federal Credit Union - 2.15% 4-year CD (parts of New York City)
• Schools Federal Credit Union - 2.08% ($90K w/relationship) 1.98% (w/o relationship) 4-year CD (Los Angeles Metro area)
• Wings Financial Credit Union - 2.02% 4-year CD (Seattle & Minneapolis Metro areas)
• Alaska USA Federal Credit Union - 2.01% ($100K) 1.91% ($10K) 4-year CD (San Bernardino County, CA; parts of WA & AK)

5-Year CD Rates

• Andrews Federal Credit Union - 2.30% 5-year CD
• Navy Federal Credit Union - 2.30% ($100K) 2.20% ($20K) 5-year CD (membership restrictions)
• Melrose Credit Union - 2.27% 5-year CD
• Pentagon Federal Credit Union - 2.25% 5-year CD
• Pentagon Federal Credit Union - 2.20% (2.76% 7-year CD closed after 5 years, see review & risks)
• US Bank - 2.00% 59-month CD (may vary by state)
• State Bank of India (New York) - 1.96% 5-year CD
• KeySource Commercial Bank - 1.95% 5-year CD, see account review

• Noteworthy Local Deals

• Belmont Savings Bank - 3.00% (active checking required) 5-year CD (Massachusetts)
• El Paso Area Teachers FCU - 2.98% ($50K) 2.88% ($500) 5-year CD (El Paso, TX)
• Department of Commerce FCU - 2.80% 5-year CD (Washington DC)
• SPCO Credit Union - 2.77% ($50K) 2.48% ($1K) 5-year CD (Houston, TX)
• General Electric Credit Union - 2.63% 5-year CD (Cincinnati OH metro)
• LOMTO Federal Credit Union - 2.55% 5-year CD (parts of New York City)
• First American Credit Union - 2.52% ($50K) 5-year CD (south of Phoenix, AZ)
• Institution for Savings - 2.50% 5-year CD (northeast MA)
• First General Credit Union - 2.50% 5-year CD (Grand Rapids, MI metro)
• Alaska USA Federal Credit Union - 2.35% ($100K) 2.25% ($10K) 5-year CD (San Bernardino County, CA; parts of WA & AK)
• Schools Federal Credit Union - 2.33% ($90K w/relationship) 2.23% (w/o relationship) 5-year CD (Los Angeles Metro area)
• Wings Financial Credit Union - 2.32% 5-year CD (Seattle & Minneapolis Metro areas)
• Washington Federal - 2.30% ($90K) 2.25% ($1K) 5-year CD (WA, AZ, ID, NV, OR, TX, UT & NM)
• Randolph-Brooks Federal Credit Union - 2.27% ($75K) 2.22% ($20K) 5-year CD (San Antonio & Austin, TX)
• Freedom Credit Union - 2.25% add-on 5-year CD (Philadelphia)
• Peoples Alliance Credit Union - 2.11% 5-year CD (South Florida)
• First Choice Bank - 2.05% ($50K) 2.00% ($2.5K) 5-year CD (Los Angeles & Orange County, CA)
• BBVA Compass - 2.00% 5-year CD (parts of AL, AZ, CA, CO, FL, NM & TX)

Over 5-Year CD Rates

• Navy Federal Credit Union - 2.80% ($20K) 7-year CD (membership restrictions)
• Pentagon Federal Credit Union - 2.76% 7-year CD
• Apple Federal Credit Union - 2.70% 10-year CD
• INOVA Federal Credit Union - 2.50% 6-year CD (2.40% step-up)
• Discover Bank - 2.45% 10-year CD (2.50% AAA members)

• Noteworthy Local Deals

• SACU - 3.55% ($90K) 3.51% ($10K) 10-year CD (San Antonio, TX)
• Tecumseh Federal Bank - 3.03% 6-year & 8-year CD (Nebraska)
• Security Service Federal Credit Union - 2.85% ($100K) 2.70% ($500) 7-year CD (parts of Texas, lower rates in CO)
• SACU - 3.05% ($100K) 3.00% ($10K) 7-year (San Antonio, TX)
• Department of Commerce FCU - 2.80% 7-year CD (Washington DC)
• Randolph-Brooks Federal Credit Union - 2.78% ($75K) 2.73% ($20K) 7-year CD (San Antonio & Austin, TX)
• Air Force FCU - 2.75% ($100K) 2.70% ($2.5K) 7-year CD (limited membership)
• 1st Commonwealth Bank of Virginia - 2.60% 7-year CD (DC Metro)
• Teachers Credit Union - 2.50% 71-month CD (parts of Indiana)
• Gateway Metro Federal Credit Union - 2.45% 6-year CD (St. Louis metro)
• 1st Commonwealth Bank of Virginia - 2.40% 6-year CD (DC Metro)
• Randolph-Brooks Federal Credit Union - 2.38% ($75K) 2.32% ($20K) 6-year CD (San Antonio & Austin, TX)
• Royal Bank America - 2.25% 10-year CD (Philadelphia)

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

Tips for Small Businesses

This consumer news issue had several tips for small businesses. It's important for small business owners to understand that business bank and credit card accounts have fewer liability protections than consumer accounts. This FDIC article reviews the protections for business credit cards:

Consumer credit cards carry protections for the cardholder under the federal Truth in Lending Act (TILA) that are not required for business cards. Those include new limits on issuer-imposed penalty fees on consumers (including late payment fees and over-the-limit fees) and certain changes in account terms.
[...]
Also understand that your liability for unauthorized use by a thief can be greater for business credit cards than for consumer credit cards. Under federal regulations implementing the TILA, there are strict limits on a consumer’s liability for unauthorized transactions: generally, no more than $50. By contrast, if a card issuer provides 10 or more credit cards to a company for employee use, it may require the business to assume unlimited liability for unauthorized transactions. And if fewer than 10 credit cards are issued to the company, the $50 limit will apply for unauthorized use by someone other than an employee. However, if an employee is the culprit, the rules set no restriction on the potential liability for the employee or the corporation.

For bank accounts, there's a risk of a thief stealing money from your account by fraudulent electronic funds transfers. Here's what the FDIC says about this:

Because businesses are generally not covered by federal consumer protections against unauthorized electronic fund transfers, a bank likely will not be responsible for reimbursing losses associated with the theft from the account if it says that negligence on the part of the business, such as falling for a common scam, was a factor.

In addition to fraud protection tips, the FDIC included reminders of recent regulation changes. One was the change in business checking accounts. I had reported on this in July 2011 when the change took effect. The FDIC summarized the change:

Earn interest on checking accounts. As of July 21, 2011, a federal prohibition against the payment of interest on business checking accounts was repealed. As a result, corporations and partnerships can now have interest-bearing checking accounts

There was also a reminder in the article about the temporary unlimited deposit insurance that can be useful for businesses:

it can open a “noninterest-bearing transaction account” (a checking account that cannot pay interest) and have unlimited insurance protection on that account through December 31, 2012.

As I mentioned when I reviewed this law in 2010, the unlimited deposit insurance doesn't affect most of us who want to earn interest on their deposits.

Denied a Checking Account

The vast majority of us are responsible with our bank accounts. We don't write bad checks or overdraw our accounts. Those who aren't responsible have to worry about the bank reporting them to ChexSystems, and once you're on ChexSystems with negative information, it can be difficult to open a new checking account at any bank.

Responsible bank account owners also have to worry about ChexSystems if they often open new accounts. Each time you open an account, the bank's inquiry to ChexSystems will be recorded. If a bank sees too many past inquiries, it may decide to reject your application. Many readers have reported this over the years.

The FDIC article didn't discuss how ChexSystem can hurt responsible bank customers, but it did describe what consumers can do if they feel there is a problem with their ChexSystems record:

What steps can you take to fix an existing problem with your record? First, you can order a free copy of a report on you, if there is one. (To request a copy of a ChexSystems report and learn more from that company, go to www.consumerdebit.com or call 1-800-428-9623.)

“You should review the report and dispute any incorrect information,” advised Luke W. Reynolds, the FDIC’s Chief of Program Development and Outreach.

I'm not sure how common it is for ChexSystems to show excessive inquiries. One possibility is having multiple inquiries for an account application when there should have been only one. For these reasons, it may be wise to regularly review your ChexSystems report even if you have always been responsible with your bank accounts.

Other rules and restrictions may apply. Special is available to new checking customers only, now through March 31, 2012 at any Bank Mutual location. Offer not available for accounts opened with money currently on deposit at Bank Mutual. Personal accounts only. Promotion cannot be combined with any other offer. Minimum opening deposit is $100 per account. To qualify for $120 bonus, customer must open an ULTIMATE Checking, Money Management Package, Premier Preference Checking, or Silver Spirit Checking, add a CheckCard, and within 30 days, add direct deposit and register for Online Banking and e-Statements. Bonus is paid out after 90 days of customer qualifying.
[...]
$120 will be considered earned after the account has been open for six months, otherwise there will be a $120 charge when the account is closed. $120 will be reported as interest on IRS form 1099-INT. Limit of one $120 bonus per household.

It appears that a branch visit is required for this promotion. Bank Mutual branches are located throughout Wisconsin. Some of the cities with branches include Brookfield, Chippewa Falls, De Pere, Eau Claire, Green Bay, Madison, Marinette, Menomonie and Milwaukee.

The bank has an overall health score at DepositAccounts.com of 3 stars (out of 5) with a Texas Ratio of 40.89% (below average) based on September 2011 data. Please refer to our financial overview of Bank Mutual for more details. The bank has been a FDIC member since 1940 (FDIC Certificate # 30125).

Other Bank Bonuses

We have a bank promotions page with a table of all of the active bank and credit union promotions. You can filter the table based on the type of promotion and based on your state. I have more details about how to use this page in this blog post.

• 8/04/11 - 1.30% APY
• 1/18/12 - 1.10% APY
• 2/01/12 - 1.05% APY
• 2/07/12 - 0.95% APY
• 2/13/12 - 0.90% APY
• 2/22/12 - 0.85% APY

I was always worried UFB Direct would disappoint us. UFB Direct is a division of BofI Federal Bank (used to be Bank of Internet USA). BofI's savings and money market accounts don't have a history of being long-term rate leaders. One example was BofI's Advantage Savings Account which it first introduced in July 2009 with a 2.50% APY. As a comparison, ING Direct's Orange Savings account was paying 1.40% APY and Alliant Credit Union's savings account was paying 2.00% APY. In July 2010, BofI's Advantage Savings Account rate had fallen to 0.81%. As a comparison, ING Direct's Orange savings account rate had fallen to 1.10% APY and Alliant's savings account rate had fallen to 1.50% APY.

Bank of Internet and its rate cuts aren't unique. We've seen many other internet banks that start out as rate leaders but after a year or two, their rates become average or below average.

Here are some examples of rate leaders that didn't stay on top. There are many others. Feel free to list those in the comments.

• DollarSavings/Emigrant Direct
• FNBO Direct
• E-LOAN
• OnBank
• WTDirect
• SmartyPig
• Hudson City Savings Bank
• airbanking

There have been a few internet banks that have kept close to the rate leaders for at least two years. Here are three that are still near the rate leaders:

• Incredible Bank
• Alliant Credit Union
• Clear Sky Accounts

Sometimes internet banks have made comebacks with their rates. They started out several years ago as a rate leader. After a year or two, they fell to average or below average. Then after a couple of years, they come out with new competitive rates. These are often just promo rates in an attempt to get back some of the deposits they have lost. Three recent examples include:

• MyBankingDirect
• Flagstar Bank
• Salem Five Direct

Other internet banks have remained fairly competitive for several years. They rarely have been near the top, but they also have rarely been near the bottom of internet banks. Some examples include:

• SFGI Direct
• Discover Bank
• American Express Bank
• Ally Bank
• ING Direct

Lessons for Rate Chasers?

If you want a savings account rate leader, you should probably expect to switch banks at least twice a year.

New internet banks or savings accounts often remain near the top for several months. Those who got in early at UFB Direct were rewarded with 5 months of a top rate. The same has been true with MyBankingDirect. I'm sure that was the reason many jumped on TIAA Direct's new savings account. Unfortunately, many readers have not been able to open accounts (see review).

The easiest solution would be to just go with a near-rate-leader like Incredible Bank and Alliant Credit Union. However, it should be noted that they have been slowly moving down the rate leader list. Alliant Credit Union has a longer history, so I think it has a better chance of remaining a long-term winner.

Another strategy is to use reward checking accounts. You can get higher rates with reward checking accounts, but there are typically balance caps and monthly debit card usage requirements. Bank of Internet's Rewards Checking account is one exception. There are no balance caps. However, its rate isn't much better than savings accounts. The rate remains 1.25% APY (as of 2/23/2012). This rate hasn't changed since it was launched in July 2011 (see my review).

If you plan to hold a significant amount of money in liquid accounts because you don't want to be locked into long-term CDs, you might want to consider CIT Bank's 2-year Achiever CD with a minimum deposit. If rates keep falling, you can fall back to this CD by making one unlimited add-on deposit. I have more details in my CIT Bank Achiever CD review.

What's your strategy of earning the best rates with internet savings accounts?

Searching for the Best Rates on Liquid Accounts

• Savings Account Rates
• Money Market Rates
• Regular Checking Rates
• Reward Checking Rates

When I reviewed the credit union's eligibility page, I was surprised to find all of the Florida counties listed. Anyone who lives or works in one of the following counties is eligible:

Broward, Palm Beach, Miami-Dade, Brevard, Charlotte, Collier, DeSoto, Glades, Hardee, Hendry, Highlands, Indian River, Lake, Lee, Manatee, Marion, Martin, Monroe, Okeechobee, Orange, Osceola, Polk, Sarasota, Seminole, St. Lucie or Volusia County

Unfortunately, City County Credit Union branches are only located in Broward County. However, I was told by a credit union member service representative, that you can join on their website. A link to the online application is in their eligibility page. A minimum $5 balance in the savings account is required for membership. Once you join, you can open the IRA by mail. Refer to the credit union's contact page to get in touch with the credit union.

The credit union has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 18.16% (average) based on September 2011 data. Please refer to our financial overview of City County Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 61525).

Searching for other Top CD & IRA CD Rates

Please refer to our IRA tables for the best IRA savings accounts and CD rates. Most of these are also available as regular CDs. You can compare these in our CD rate tables.

The Fulton Financial family has 6 banks that cover much of Virginia, Maryland, Delaware, Pennsylvania and New Jersey. You can select the bank that's near where you live from this Fulton Financial map. I checked a few of these, and all mention the promo on their home page. Here's a direct link to the Fulton Bank's promotions page. A new checking account must be opened by March 31, 2012. Below is the offer's small print:

Offer valid when opening a new retail checking account by March 31, 2012, establishing direct deposit of $250 or more within 60 days of account opening and enrolling in Online Banking with Bill Pay and making three bill payments within 90 days of account opening. The direct deposit requirement, such as Social Security, pension or payroll must be completed within 60 days of account opening. Qualifying payments are defined as any payments made using our online bill payment service. Payments to yourself do not qualify. FFC employees and immediate family members sharing a household are not eligible. Gift will be sent 6-8 weeks after the conditions above have been met. We reserve the right to substitute an item of equal value. Customers are responsible for possible tax implications. May not be combined with any other offer. Terms and conditions subject to change. Offer may be withdrawn without notice. Accounts are subject to account related fees, including non-sufficient funds or standard overdraft fees.

The banks do offer a free checking account with no monthly fees or minimum balance requirements.

The downside with any gift bonus is that the bank will likely report the gift value to the IRS. At least with a gift like Amazon Kindle Fire, the price is fairly standard. So you shouldn't be surprised by the gift value the bank reports.

Credit for this find goes to this FW thread. It was mentioned on this thread that only residents of VA, MD, DE, PA and NJ are eligible to open an account.

Here's the list of all the bank's that make up the Fulton Financial family: FNB Bank, N.A., Fulton Bank, N.A., Fulton Bank of New Jersey, Lafayette Ambassador Bank, Swineford National Bank and The Columbia Bank.

Other Bank Bonuses

We have a bank promotions page with a table of all of the active bank and credit union promotions. You can filter the table based on the type of promotion and based on your state. I have more details about how to use this page in this blog post.

• Your accounts will continue to be FDIC-insured at both places separately. That means your deposits will be FDIC-insured up to $250,000 at ING DIRECT and an additional $250,000 at each of Capital One's two other banks (Capital One Bank (USA), N.A., and Capital One, N.A.).
• ING Group will allow a one-year transitional use of "ING DIRECT" from February 17, 2012. So, yes, our name will gradually change over time
• Electric Orange and MONEY Customers will now have access to the over 2,000 Capital One ATMs (cash withdrawal only) in addition to the 35,000 free ATMs already available through the Allpoint network.
• coming this spring you'll have access to CheckMate, our new remote deposit service. You can deposit checks directly into your ING DIRECT accounts anywhere from your computer or mobile device.

It's interesting to see ING Direct mentioning its new remote deposit service as part of the Capital One transition. I wonder if the acquisition had slowed them down in rolling this out. It was almost a year ago when I was first told by ING Direct representatives that the service was in the works.

As I mentioned last week, there's a question about future deposit rates at ING Direct and Capital One Direct Banking. Will they remain competitive? As I described last week, recent rate cuts at Capital One Direct Banking have been disappointing. Also, the CD rates at both ING Direct and Capital One Direct Banking are dismal. Now that Capital One is the sixth largest bank in the country, I hope it doesn't start acting like a megabank with uncompetitive deposit rates.

Branch Locations

It appears a branch visit is required to open an account. LNB branches are located between Rochester and Syracuse, New York.

The bank has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 11.25% (above average) based on September 2011 data. Please refer to our financial overview of Lyons National Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 7151).

Hat tip to the reader who emailed me news of these specials.

Searching for the Best Savings & CD Rates

To find the best rates for savings accounts and CDs, please refer to our savings account and CD rates tables.

Short for malicious software, malware is designed to install on your computer without your consent. It's most commonly used to steal you information and login credentials, which can lead to ID Theft and financial crime.

Ally Bank is offering Ally Bank customers Prevx 3.0 for free. This is an anti-malware software that detects and removes malicious software from your computer. According to Ally: "As long as you have an account with Ally Bank there's: No cost to you - we'll never ask you to pay the $34.95 retail price. No strings attached - you won't be charged an annual renewal fee." To review the details of Prevx, log into your Ally account and go to the security center (security link at the top right of the page). When you're logged in, the security center will include a box on the left side that says "We're taking online security to the next level". Click on this, and you'll see Ally's Prevx page. Some important features mentioned on this page include:

• Works along with your existing anti-virus software
• Adds an extra layer of protection to your existing security software
• Runs automatic updates to help protect you against emerging threats
• Detects and removes malware on your PC such as spyware and trojans

I decided to give this a try. Two days ago I downloaded and installed Prevx via Ally's website. The download and installation was quick and easy. The only thing that wasn't obvious was to activate the license key. When you open the Prevx software, make sure you go to the license page to enter the key. This will ensure you are using all of the protection features of Prevx. Ally provides the key on the page that has the download link.

I haven't noticed any slow down in my system or any other effects from the software. It's hard to know how well security software is operating. PCMag.com has a Prevx 3.0 review where you can read some pros and cons. It mentioned two cons: "Cannot function without Internet connection. Cleanup left behind many file and Registry traces." Some of the user reviews reported "false positives" in which it flags benign programs.

Online Banking Security Guarantee

It should be noted that Ally customers receive an Online Banking Security Guarantee regardless if they download this extra security. According to Ally:

If you ever have an unauthorized transaction in Ally Bank’s Online Services, report it to us within 60 days from when we make your statement available to you – we guarantee you won’t be liable for the transaction.

This actually isn't unique to Ally. All banks are required by the Federal Electronic Funds Transfer Act to correct unauthorized transactions if you notify the bank within 60 days of the account statement on which the transaction appears (see FDIC article).

What Other Banks Offer

Ally Bank isn't the only bank offering security software. ING Direct has been offering Trusteer Rapport since 2008. Like Prevx, Rapport is designed to go beyond the protection offered by anti-virus programs, anti-spyware and firewalls. When I reported on Rapport in 2008, a few readers felt it was too much like spyware. Also, there was concern that the software was just "marketing fluff."

Bank of America has long offered its online banking customers McAfee Internet Security software for free for 12 months. However, I always considered this to be a marketing strategy by McAfee since there will be an automatic renewal at the end of the 12-month free period.

My Take

I can't judge the usefulness or the intrusiveness of Prevx, but it appears to have advantages over the security software that ING Direct offers. Also, unlike what Bank of America offers, this Ally offer isn't just a discount on security software. According to Ally, there's "no strings attached".

Ally Bank may have made some recent mistakes, but they keep improving. I just hope they can keep their rates competitive and avoid being sold off to a megabank.

The bank's Elite Checking has a 1.06% APY on daily balance of $1,500.00 and above. For balances under $1,500, there's a $6 monthly fee and the rate falls to 0.75% APY. The rates are listed in the bank's Elite Checking page as of 2/21/2012. A reader who opened an account when it was available nationwide had this to say: "all my banking is done online or by mail and I have to say I have no trouble with them whatsoever."

The bank also offers a money market account called Treasury Index which has a current yield of 1.11% APY for balances of at least $25,000 (0.50% for under). This is listed in the bank's savings account rate sheet as of 2/12/2012. There are no monthly maintenance fees.

Another good deal is the bank's Option Plus IRA. It's an 18-month IRA CD with a very competitive 2.02% APY. This IRA special and rate are listed in the bank's IRA page as of 2/21/2012. According to this page, APY applies to new accounts opened between 12/27/2011 and 04/16/2012. The "option" feature is an option to increase the rate at least once during the term of the certificate.

The bank's main office is in Merriam, Kansas with 7 branches in Kansas and Missouri. Its overall health score is 5 stars (out of 5) with a Texas Ratio of 5.24% (excellent) based on September 2011 data. Please refer to our financial overview of Morrill & Janes Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 1143).

Searching for other Top Checking and IRA Rates

If you're looking for the best rates on liquid accounts, please refer to our checking, reward checking, savings account and money market account tables.

Refer to our IRA tables for the best IRA savings accounts and CD rates.

Update 2/22/2012: Some readers have reported being told by TIAA-CREF officials that accounts are currently only available to TIAA-CREF employees. However, other readers have reported being able to open accounts online even though they were not employees. I again called TIAA Direct at (855) 842-2372, and I was again told anyone can apply. I was also told that you can apply by phone. It appears they have not done a good job at planning the TIAA Direct rollout. So right now, opening an account may be a "Your Miles May Vary" (YMMV) situation.

TIAA-CREF has entered the internet banking market last week with its launch of TIAA Direct. It was a quiet launch with no apparent press release. I learned about it from a reader's email (Thanks!). The new internet bank offers CDs, checking, savings and money market accounts. The savings and money market accounts are the most noteworthy due to the very competitive rate. It's 1.25% APY on all balances as of 2/20/2012. I was told by the customer service representative (CSR) that this is a promotional rate. It is subject to change at anytime.

Both the money market and savings accounts require only a $25 minimum initial deposit. There is no minimum balance requirement and no monthly fee. The money market account appears to have all the features of the savings account with the additional benefit of limited check writing (up to 6 checks are allowed per month). Below is a short summary of the checking, savings and money market account features:

Account Opening:

• Accounts can be opened online or by phone
• Accounts can be funded by ACH transfer or by check
• $25 minimum initial deposit
• up to 4 POD beneficiaries allowed (per CSR) Update 2/25/12: I was told by a CSR that the beneficiary option is currently not working. They are supposedly in the process of fixing it.
• Update 2/25/12: Readers have reported they do a hard pull via Equifax. CSR claims they only do a soft pull for ID verification purposes (Note, CSRs are often wrong on this issue)

Noteworthy Features:

• No monthly fees or minimum balance requirement
• Remote Deposits from your iPhone
• Free ATM card
• No ATM fees when used at an ATM in its nationwide ATM network
• Free first set of checks (MMA & checking only)
• Debit card & online bill pay (checking only)

ACH Fund Transfer Features:

• Links to external accounts verified via trial deposits
• No limit on the number of links (per CSR)
• No limit on the size of transfers (per CSR)
• Transfer speed and hold times depend on deposit size (per CSR)

They have a decent FAQs section, but it didn't have many details about the ACH bank-to-bank transfer service. These details were also absent in the disclosures so I had to call their customer service for more information. I was able to connect with a customer service rep without any problem.

TIAA-CREF Bank Overview

TIAA Direct is a division of TIAA-CREF Trust Co, FSB. Deposits at TIAA-CREF Trust Company, FSB are insured by the FDIC to at least $250,000 per depositor. You can verify the FDIC membership at this FDIC page. It has been a FDIC member since 1998.

The bank has an overall health score at DepositAccounts.com of 5 stars (out of 5) based on September 2011 data. Please refer to our financial overview of TIAA-CREF Trust Company, FSB for more details.

TIAA-CREF is short for Teachers Insurance and Annuity Association – College Retirement Equities Fund. It's the leading retirement provider for people who work in the academic, research, medical and cultural fields. More details about the company are in TIAA-CREF Company Stats and Facts page.

Is a New Internet Savings Account Worthwhile?

TIAA Direct's savings account rate is currently the best savings account rate available nationwide. It's currently 10 basis points over the previous leaders. You can see how it compares to other accounts in my last weekly summary.

Is the rate high enough to interest you? Is rate chasing on savings accounts worthwhile these days? I've been asking this question since 2010. With interest rates so low, there's not much difference between this and the rate of an average internet savings account like ING Direct Orange Savings (0.80% as of 2/20/2012). Even if that spread is large enough to be worthwhile, there's the question about how long the competitive rate will last.

We have seen many new internet savings accounts over the years that started out as competitive. Most become average or uncompetitive after one to two years. The latest example is UFB Direct which started out with a very competitive rate in August 2011. After 5 months, the rate has plummeted to average status (and may still be falling).

Since a large institution like TIAA-CREF is behind this new internet bank, my guess is that they will keep the rate competitive for several months. So if you get in early, it could be a worthwhile deal. It will very likely be better than any 3-month and 6-month CDs that are available today.

For those only interested in a savings account for the long term, it's hard to say if it will remain competitive. One thing that makes me a little skeptical is its current CD rates. They are below average as compared to other internet banks.

One thing nice about these accounts is that they don't have a minimum balance requirement. You should be able to easily move your money if the rates fall too low.

A few members observed that, in their judgment, current and prospective economic conditions--including elevated unemployment and inflation at or below the Committee's objective--could warrant the initiation of additional securities purchases before long.

Let's hope the economy continues to improve and the few inflation hawks on the Fed are willing to fight against QE3 and other efforts to further drive down interest rates.

The strong economic reports did appear to have an effect on Treasury yields and the Fed fund futures. Most yields did go up. The summary of the yields is shown below (Numbers are based on Yahoo bond rate data and the CME Group FedWatch.)

Treasury Yields:

• 6-month: 0.10% down from 0.11% last week
• 2--year: 0.29% up from 0.27% last week
• 5--year: 0.86% up from 0.82% last week
• 10-year: 2.00% up from 1.98% last week
• 30-year: 3.14% unchanged from last week

Fed funds futures' implied probability for a higher rate by:

• Dec 2013: 49.0% up from 39.1% last week
• Sep 2014: 79.4% down from 80.5% last week

The big internet banking news this was the Fed's approval of Capital One's acquisition of ING Direct. Just three days after the approval, Capital One completed the acquisition. The transition of ING Direct into Capital One will likely take some time. According to Capital One, ING Direct customers will "experience no changes to account services and functionality." One small and immediate benefit for ING Direct customers is that they can now use Capital One ATMs in addition to Allpoint ATMs to make free cash withdrawals.

This was another week without any bank failures. The total number of bank failures for the year remains at 9.

Savings & Checking Account Rates

There were more savings and checking account rate cuts than usual this week. On my list of top savings and money market accounts, four banks cut their rates.

UFB Direct had yet another rate cut. With several rate cuts in the last month, the UFB Direct savings account yield has fallen from 1.30% to 0.90%.

Another disappointment occurred on Friday. Incredible Bank reduced its money market yield from 1.10% to 1.05% for balances up to $250K. It's starting to look like a 1.00%+ savings or money market account yield is becoming an endangered species.

The current rate leaders continue to be Flagstar Bank and the two internet banks of New York Community Bank (AmTrustDirect and MyBankingDirect). All three continue to offer 1.15% APY on their savings and money market accounts. However, Flagstar Bank's 1.15% APY is only an intro rate that will fall after four months. So if you want a chance at a rate that will stay competitive, AmTrustDirect and MyBankingDirect would be a better choice. I reviewed AmTrustDirect's Premium e-Money Market Account earlier this month.

Reward Checking Accounts

Three banks on my short list of nationally available reward checking accounts reduced their rates this week. Bank of Blue Valley was one. The top rate of its Ultimate Checking Account fell from 3.00% to 2.00% APY for balances up to $25K. To qualify for this top rate, customers must make a total of at least $1,000 in debit card purchases. That tough requirement was hard to justify even before this rate cut.

On the plus side, I added a new reward checking account to the nationwide list. First Security Bank & Trust has opened up its reward checking account to people in all states. Applications can be done online. Its top rate is 2.30% APY for balances up to $15K.

The two remaining members of the 4-percent club, Coppermark Bank and Southwest Airlines FCU, held steady this week. These are the only reward checking accounts in the nation that pay 4.00% APY on balances of $25K. Neither are available nationwide. Coppermark Bank is local to parts of Oklahoma and Texas. Southwest Airlines FCU is primarily limited to Southwest Airlines employees and a few other employee groups.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can be used to find accounts available nationwide and accounts with higher rates in your state. If you're new to these tables, my new rate table guide should be useful, and if you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should also be useful.

Additions:

1. First Security Bank & Trust reward checking - 2.30% up to $15K

Rate Hikes:

1. None

Rate Cuts:

1. Bank of Blue Valley reward checking - 2.00% up to $25K [was 3.00%]
2. Atlantic Coast Bank reward checking - 1.50% up to $15K [was 2.01%]
3. State Bank of Toledo reward checking - 1.31% up to $25K [was 1.51%]
4. Incredible Bank MMA - 1.05% up to $250K [was 1.10%]
5. UFB Direct Savings - 0.90% [was 0.95%]
6. Nationwide Bank MMA - 0.85% [was 0.90%]
7. CNB Bank Direct Savings - 0.80% [was 0.85%]

Certificate of Deposit Rates

My recap of CD rate changes and the list of CD deals will now be in my survey of the best CD rates. This recap will now focus on banking news of the week and liquid accounts.

Recap for the Week - Links to This Week's Posts

• Fed Approves Capital One's Acquisition Of ING Direct
• More Publicity on CEFCU's CD Early Withdrawal Penalty Change

• No new posts this week

• Survey of the Best CD Rates for February 17, 2012
• Top CD & IRA CD Rates at Northwest Federal Credit Union - Easy Membership

• Top Checking Bonus & CD Rates at American Heritage FCU in Philly

• Another Nationally Available Reward Checking Account
• Can Reward Checking Remain a Good Alternative to Internet Banks?

• Competitive CD Rates at Texas Brand Bank in Dallas Metro - Local Only
• Competitive 5-Year CD & IRA CD Rates at Actors FCU - Limited Membership
• Top CD Rates at Charleston Area Credit Union - Local Only
• Top 2-Year IRA CD Rate in New York City at Atlas Bank - Local Only
• Competitive CD Rates at Clinton Savings Bank - MA Only
• Top CD Rates at Afena Federal Credit Union in Indiana - Local Only
• Presidents' Day CD Special at Capitol Federal Savings Bank - KS Only
• CD & Money Market Specials at American Bank of Missouri - Local Only
• Special 5-Year CD with a Top Rate But with a Catch at Belmont Savings Bank - MA Only

• Archive of 2012 Posts

Rates as of February 18, 2012

Checking/Savings/Money Market Accounts:

• Best Savings Account Rates (Nationwide & by State)
• Best Money Market Rates (Nationwide & by State)
• Best Checking Account Rates (Nationwide & by State)

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• AmTrustDirect - 1.15% (min $5K) promo rate
• MyBankingDirect - 1.15% (min $5K) promo rate
• Flagstar Bank - 1.15% savings (4-month promo) promo review
• Incredible Bank - 1.05% MMA ($2.5K min) account review
• Incredible Bank - 1.01% Checking ($1K min) account review
• Salem Five Direct - 1.00% savings (guaranteed thru Aug statement cycle for new customers)
• Alliant Credit Union - 1.00% (min $100) Savings account review
• Clear Sky Accounts - 0.95% (max $250K) account review
• One United Bank - 0.95% ($100K) 0.85% ($1K) E-Money Market
• Alliant Credit Union - 0.95% Checking (req's elec. dep & e-stmts) account review
• SFGI Direct - 0.91% account review
• Discover Bank - 0.90% Savings (min $500) account review
• American Express Bank - 0.90%, account review
• ING Direct - 0.90% ($100K) 0.85% ($50K) Electric Orange Checking
• Sallie Mae Bank - 0.90% MMA account review
• Capital One/Costco - 0.90% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.82% (w/o bonus) account review
• UFB Direct (Bank of Internet) - 0.90% Savings account review
• Colorado Federal Savings Bank - 0.85% ($2.5K min) account review
• Sallie Mae Bank - 0.85% Savings account review
• Nationwide Bank - 0.85% MMA (min $1K)
• Ally Bank - 0.84% MMA/savings account review
• HSBC Advance - 0.80% Savings
• ING Direct - 0.80% Orange Savings
• CNB Bank Direct - 0.80% account review
• Capital One - 0.71% InterestPlus Savings ($10K min, includes 10% quarterly bonus) 0.65% (w/o bonus) account review
• Capital One - 0.60% Checking (rate guaranteed for 1 yr) account review

Reward Checking Accounts:

• Best Reward Checking Account Rates for a $10,000 Balance - Nationally Available
• Best Reward Checking Account Rates for a $25,000 Balance - Nationally Available

• How to View Rates for Your State

• Noteworthy Accounts Available Nationwide:

• Consumers Credit Union - 4.09% (up to $10K) 0.56% ($10K-$25K) 0.35% ($25K+)
• INOVA Federal Credit Union - 3.00% (up to $20K) 0.30% ($20K+)
• Lake Michigan Credit Union - 3.00% (up to $15K) 0.00% ($15K+)
• ABCO Federal Credit Union - 2.52% (up to $25K) 0.50% ($25K+)
• First Security Bank & Trust - 2.30% (up to $15K) 0.60% ($15K+)
• Pacific Resource Credit Union - 2.27% (up to $15K) 0.50% ($15K+)
• Provident Credit Union - 2.26% (up to $25K) 0.31% ($25K+)
• Community Bank of Raymore - 2.01% (up to $25K) 0.50% ($25K+)
• Community Bank of Pleasant Hill - 2.01% (up to $25K) 0.50% ($25K+)
• Connexus Credit Union - 2.00% (up to $25K) 0.50% ($25K+)
• Bank of Blue Valley - 2.00% (up to $25K) 0.35% ($25K+), $1K/month debit card req (account review)
• Heritage Bank - 1.71% (up to $25K) 0.10% ($25K+)
• Avidia Bank - 1.66% (up to $25K) 0.10% ($25K+)
• First New England Federal Credit Union - 1.52% (up to $15K) 0.10% ($15K+) (extra 1% w/relationship)
• North Country Savings Bank - 1.50% (up to $50K) 0.75% ($50K+)
• Atlantic Coast Bank - 1.50% (up to $15K) 0.50% ($15K+)
• State Bank of Toledo - 1.31% (up to $25K) 0.20% ($25K+)
• West Texas National Bank - 1.26% (up to $25K) 0.25% ($25K+)
• Bank of Internet USA - 1.25% (all balances)

Certificates of Deposit:

• Best CD Rates (Nationwide & by State)
• Best IRA CD Rates (Nationwide & by State)

• How to View Rates for Your State

• Survey of the Best CD Rates for February 17, 2012 (Nationwide & Local)

Various Deposit Account Deals

• Bank Promotions
• Best IRA CD rates, local and nationwide deals
• Latest CD and Savings Account Deals with No Major Deposit Limitiations

Bank Account Alternatives

• Ford Interest Advantage - 1.25% rate for $50k+, Ford Interest Advantage review
• GE Interest Plus - 1.20% rate for $50k+
• Vanguard Prime Money Market Fund - 0.04% 7-day yield
• Vanguard Tax-Exempt Money Market Fund - 0.04% 7-day yield
• Fidelity Money Market Fund - 0.01% 7-day yield (reviews on Fatwallet)
• Fidelity Municipal Money Market Fund - 0.01% 7-day yield
• TIAA-CREF Money Market Fund - 0.00% 7-day yield
• PayPal Money Market Fund has ended effective 7/29/11
• FW Thread on Treasury Bills
• Series I Savings Bonds for November 2011, I Bond Article, I Bonds as CD Alternatives

Local CD Deals

I added a new 3-percent CD this week, but there's a catch. Belmont Savings Bank in Massachusetts is offering a special 5-year CD with a blended APY of 3.00%. The catch is that it requires the customer maintain an active checking account, and it takes some work each month to keep it active (see my review). Another downside is a maximum deposit of $100K.

I was planning to add another 3-percent CD this week. I reviewed Afena Credit Union (a small credit union in Indiana) on Tuesday and its 3.03% APY 5-year CD. That rate didn't last long. The rate fell to 2.52% APY on Thursday.

If we include Belmont Savings Bank's special 5-year CD, we now have a total of three institutions in the 3-percent club. The other two continue to be the 3.35% APY 10-year CD at San Antonio Credit Union (SACU) and the 3.03% APY 6-year CD at Tecumseh Federal Bank in Nebraska. You can find a few more institutions with 3.00%+ CDs in our CD rate tables, but these are small banks in low populated areas or small credit unions with very narrow fields of membership.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest penalty, it's still a good deal when closed early even with the recent rate cuts.

The risks of planning for early withdrawals of long-term CDs was recently highlighted by another credit union which raised the early withdrawal penalty on existing CDs. The credit union is CEFCU which is based in Illinois. I have more details in this blog post. CEFCU is now the second credit union which has raised the early withdrawal penalty on existing CDs. Last year Fort Knox FCU did the same thing (see my blog post).

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. This CD survey blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The CD survey blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but most of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available in large areas of a state.

Yields Accurate as of February 17, 2012

Under 1-Year CD Rates

• Ally Bank - 1.16% (1.74% 5-year CD closed after 6 months, see review & risks)
• KeySource Commercial Bank - 1.00% 7-month CD special, see account review
Ally Bank - 0.91% 11-month No-Penalty CD, see account review
• AloStar Bank of Commerce - 0.85% 6-month CD

• Noteworthy Local Deals

• University of Iowa Community Credit Union - 1.45% ($250K) 1.35% ($100K) 1.25% ($1K) 10-month CD (several parts of Iowa)
• Miami Postal Service Credit Union - 1.26% ($25K) 9-month CD (Southeast FL)
• Veridian Credit Union - 1.11% ($100K) 0.90% ($1K) 7-month CD (several parts of Iowa)
• First Choice Bank - 1.05% ($50K) 1.00% ($2.5K) 288-day CD (Los Angeles & Orange County, CA)
• American Plus Bank - 0.95% 6-month CD (Los Angeles metro)
• CapitalSource Bank - 0.95% 8-month CD (California)
• Industrial Credit Union - 0.90% 6-month CD (Boston metro area)

1-Year CD Rates

• Ally Bank - 1.45% (1.74% 5-year CD closed after 1 year, see review & risks)
• Pentagon Federal Credit Union - 1.16% 1-year CD
• KeySource Commercial Bank - 1.15% 1-year CD, see account review
• Doral Bank Direct - 1.15% 1-year CD
• CIT Bank - 1.08% ($25K min) add-on & bump-up 1-year CD

• Noteworthy Local Deals

• Community Trust Bank - 1.65% (w/dd) 1.40% (w/chk) 1.15% 13-month CD, review (parts of TX, LA & MS)
• Gulf Coast Credit Union - 1.50% 12-month CD (Corpus Christi, TX metro)
• General Electric Credit Union - 1.42% ($100K) 1-year CD (Cincinnati OH metro)
• University of Iowa Community Credit Union - 1.35% ($250K) 1.25% ($100K) 1.15% ($1K) 13-month CD (several parts of Iowa)
• El Paso Area Teachers FCU - 1.31% ($50K) 1.21% ($500) 1-year CD (El Paso, TX)
• Dupaco Community Credit Union - 1.30% 15-mo CD (parts of IA, IL & WI)
• First American Credit Union - 1.26% ($50K) 1-year CD (south of Phoenix, AZ)
• LOMTO Federal Credit Union - 1.20% 1-year CD (parts of New York City)
• Our Community Credit Union - 1.20% 1-year CD (Washington State)
• Harris County Credit Union - 1.16% ($95K) 1-year CD (Houston)
• American Plus Bank - 1.16% 1-year CD (Los Angeles metro)
• First Choice Bank - 1.15% ($50K) 1.10% ($2.5K) 366-day CD (Los Angeles & Orange County, CA)

18-month CD Rates

• Ally Bank - 1.55% (1.74% 5-year CD closed after 18 months, see review & risks)
• KeySource Commercial Bank - 1.20% 18-month CD, see account review
• Incredible Bank - 1.20% 19-month CD
• Alliant Credit Union - 1.15% ($1K min) 18-month CD

• Noteworthy Local Deals

• Gulf Coast Credit Union - 1.65% 18-month CD (Corpus Christi, TX metro)
• Cross River Bank - 1.50% 18-month CD (NJ in NYC metro area)
• El Paso Area Teachers FCU - 1.46% ($50K) 1.36% ($500) 18-month CD (El Paso, TX)
• Veridian Credit Union - 1.45% ($100K) 1.25% ($1K) 15-month CD (several parts of Iowa)
• Department of Commerce FCU - 1.45% 18-month CD (Washington DC)
• First Choice Bank - 1.30% ($50K) 1.25% ($2.5K) 541-day CD (Los Angeles & Orange County, CA)

2-Year CD Rates

• Ally Bank - 1.59% (1.74% 5-year CD closed after 2 years, see review & risks)
• Pentagon Federal Credit Union - 1.37% (2.76% 7-year CD closed after 2 years, see review & risks)
• Melrose Credit Union - 1.36% 2-year CD
• Alliant Credit Union - 1.30% ($1K min) 2-year CD
• CIT Bank - 1.26% ($25K min) add-on & bump-up 2-year CD

• Noteworthy Local Deals

• Gulf Coast Credit Union - 1.85% 2-year CD (Corpus Christi, TX metro)
• University of Iowa Community Credit Union - 1.85% ($250K) 1.75% ($100K) 1.65% ($1K) 22-month CD special (several parts of Iowa)
• Veridian Credit Union - 1.80% ($100K) 1.60% ($1K) 25-month CD (several parts of Iowa)
• Department of Commerce FCU - 1.65% 2-year CD (Washington DC)
• Harris County Credit Union - 1.51% ($95K) 1.21% ($2.5K) 2-year CD (Houston)
• Our Community Credit Union - 1.50% 2-year CD (Washington State)
• Cross River Bank - 1.50% 2-year CD (NJ in NYC metro area)
• LOMTO Federal Credit Union - 1.50% 2-year CD (parts of New York City)
• Wings Financial Credit Union - 1.41% 2-year CD (Seattle & Minneapolis Metro areas)
• mBank - 1.40% 2-year CD (parts of Michigan)

3-Year CD Rates

• Melrose Credit Union - 1.86% 3-year CD
• Pentagon Federal Credit Union - 1.83% (2.76% 7-year CD closed after 3 years, see review & risks)
• Ally Bank - 1.64% (1.74% 5-year CD closed after 3 years, see review & risks)
• Fort Knox Federal Credit Union - 1.60% 3-year CD
• AmTrustDirect - 1.55% 3-year CD

• Noteworthy Local Deals

• El Paso Area Teachers FCU - 2.37% ($50K) 2.27% ($500) 36 & 30-month CD (El Paso, TX)
• NavyArmy Federal Credit Union - 2.25% 30-month CD (Corpus Christi, TX metro)
• University of Iowa Community Credit Union - 2.20% ($250K) 2.10% ($100K) 2.00% ($1K) 37-month CD (several parts of Iowa)
• Veridian Credit Union - 2.10% ($100K) 1.90% ($1K) 39-month CD (several parts of Iowa)
• Department of Commerce FCU - 2.05% 3-year CD (Washington DC)
• Leominster Credit Union - 2.00% 3-year CD (parts of MA)
• Our Community Credit Union - 2.00% 3-year CD (Washington State)
• Cross River Bank - 2.00% 3-year CD (NJ in NYC metro area)
• Institution for Savings - 2.00% 3-year CD (northeast MA)
• SPCO Credit Union - 1.97% ($50K) 1.76% ($1K) 3-year CD (Houston, TX)
• Dupaco Community Credit Union - 1.91% 35-mo CD (parts of IA, IL & WI)
• Wings Financial Credit Union - 1.86% 3-year CD (Seattle & Minneapolis Metro areas)
• LOMTO Federal Credit Union - 1.85% 3-year CD (parts of New York City)
• EBSB Direct - 1.80% 3-year internet CD (New England & New York State)
• First American Credit Union - 1.76% ($50K) 3-year CD (south of Phoenix, AZ)
• mBank - 1.75% 3-year CD (parts of Michigan)
• Florida Credit Union - 1.61% 3-year CD special (North Central FL)
• First Choice Bank - 1.60% ($50K) 1.55% ($2.5K) 3-year CD (Los Angeles & Orange County, CA)

4-Year CD Rates

• Melrose Credit Union - 2.07% 4-year CD
• Pentagon Federal Credit Union - 2.06% (2.76% 7-year CD closed after 4 years, see review & risks)
• Andrews Federal Credit Union - 2.05% 4-year CD
• Nationwide Bank - 1.70% ($100K) 1.65% ($500) 4-year CD

• Noteworthy Local Deals

• Department of Commerce FCU - 2.50% 4-year CD (Washington DC)
• University of Iowa Community Credit Union - 2.35% ($250K) 2.25% ($100K) 2.15% ($1K) 49-month CD (several parts of Iowa)
• SPCO Credit Union - 2.32% ($50K) 2.02% ($1K) 4-year CD (Houston, TX)
• First General Credit Union - 2.25% 4-year CD (Grand Rapids, MI metro)
• Cross River Bank - 2.25% 4-year CD (NJ in NYC metro area)
• mBank - 2.25% 4-year CD (parts of Michigan)
• Our Community Credit Union - 2.15% 4-year CD (Washington State)
• LOMTO Federal Credit Union - 2.15% 4-year CD (parts of New York City)
• Schools Federal Credit Union - 2.08% ($90K w/relationship) 1.98% (w/o relationship) 4-year CD (Los Angeles Metro area)
• Wings Financial Credit Union - 2.02% 4-year CD (Seattle & Minneapolis Metro areas)
• Alaska USA Federal Credit Union - 2.01% ($100K) 1.91% ($10K) 4-year CD (San Bernardino County, CA; parts of WA & AK)

5-Year CD Rates

• Andrews Federal Credit Union - 2.30% 5-year CD
• Navy Federal Credit Union - 2.30% ($100K) 2.20% ($20K) 5-year CD (membership restrictions)
• Pentagon Federal Credit Union - 2.25% 5-year CD
• Pentagon Federal Credit Union - 2.20% (2.76% 7-year CD closed after 5 years, see review & risks)
• State Bank of India (New York) - 2.02% 5-year CD
• US Bank - 2.00% 59-month CD (may vary by state)

• Noteworthy Local Deals

• Belmont Savings Bank - 3.00% (active checking required) 5-year CD (Massachusetts)
• El Paso Area Teachers FCU - 2.98% ($50K) 2.88% ($500) 5-year CD (El Paso, TX)
• Department of Commerce FCU - 2.80% 5-year CD (Washington DC)
• SPCO Credit Union - 2.77% ($50K) 2.48% ($1K) 5-year CD (Houston, TX)
• General Electric Credit Union - 2.63% 5-year CD (Cincinnati OH metro)
• LOMTO Federal Credit Union - 2.55% 5-year CD (parts of New York City)
• First American Credit Union - 2.52% ($50K) 5-year CD (south of Phoenix, AZ)
• Institution for Savings - 2.50% 5-year CD (northeast MA)
• First General Credit Union - 2.50% 5-year CD (Grand Rapids, MI metro)
• Alaska USA Federal Credit Union - 2.35% ($100K) 2.25% ($10K) 5-year CD (San Bernardino County, CA; parts of WA & AK)
• Schools Federal Credit Union - 2.33% ($90K w/relationship) 2.23% (w/o relationship) 5-year CD (Los Angeles Metro area)
• Wings Financial Credit Union - 2.32% 5-year CD (Seattle & Minneapolis Metro areas)
• Washington Federal - 2.30% ($90K) 2.25% ($1K) 5-year CD (WA, AZ, ID, NV, OR, TX, UT & NM)
• Randolph-Brooks Federal Credit Union - 2.27% ($75K) 2.22% ($20K) 5-year CD (San Antonio & Austin, TX)
• Freedom Credit Union - 2.25% add-on 5-year CD (Philadelphia)
• Peoples Alliance Credit Union - 2.11% 5-year CD (South Florida)
• First Choice Bank - 2.05% ($50K) 2.00% ($2.5K) 5-year CD (Los Angeles & Orange County, CA)
• BBVA Compass - 2.00% 5-year CD (parts of AL, AZ, CA, CO, FL, NM & TX)

Over 5-Year CD Rates

• Navy Federal Credit Union - 2.80% ($20K) 7-year CD (membership restrictions)
• Pentagon Federal Credit Union - 2.76% 7-year CD
• Apple Federal Credit Union - 2.70% 10-year CD
• INOVA Federal Credit Union - 2.50% 6-year CD (2.40% step-up)
• Discover Bank - 2.45% 10-year CD (2.50% AAA members)

• Noteworthy Local Deals

• SACU - 3.35% ($90K) 3.30% ($10K) 10-year CD (San Antonio, TX)
• Tecumseh Federal Bank - 3.03% 6-year & 8-year CD (Nebraska)
• Security Service Federal Credit Union - 2.85% ($100K) 2.70% ($500) 7-year CD (parts of Texas, lower rates in CO)
• SACU - 2.85% ($100K) 2.80% ($10K) 7-year (San Antonio, TX)
• Department of Commerce FCU - 2.80% 7-year CD (Washington DC)
• Randolph-Brooks Federal Credit Union - 2.78% ($75K) 2.73% ($20K) 7-year CD (San Antonio & Austin, TX)
• Air Force FCU - 2.75% ($100K) 2.70% ($2.5K) 7-year CD (limited membership)
• 1st Commonwealth Bank of Virginia - 2.60% 7-year CD (DC Metro)
• Teachers Credit Union - 2.50% 71-month CD (parts of Indiana)
• Gateway Metro Federal Credit Union - 2.45% 6-year CD (St. Louis metro)
• 1st Commonwealth Bank of Virginia - 2.40% 6-year CD (DC Metro)
• Randolph-Brooks Federal Credit Union - 2.38% ($75K) 2.32% ($20K) 6-year CD (San Antonio & Austin, TX)
• Royal Bank America - 2.25% 10-year CD (Philadelphia)

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

• 2.30% APY up to $15,000
• 0.60% APY on portion above $15,000
• 0.05% base rate if requirements are not met
• ATM surcharge fee refunds up to $25 per month

The account has remained free without minimums and monthly service charges. Its monthly requirements are typical for reward checking:

• 10 check card POS (point of sale) transactions
• one direct deposit or ACH debit
• Online banking access
• Receive e-statements

You can access its online application at the bank's reward checking page. I confirmed with the bank that people in any state can apply and no branch visit is required. As I mentioned above, this bank has reduced the availability of this account in the past so it could do it again in the future.

First Security Bank & Trust branches are located in northern Iowa.

The bank has grown quite a bit since I first reviewed this bank in 2009. Its assets have increased from $245 million in 2009 to $432 million in 2011. Its overall health score at DepositAccounts.com is 3 stars (out of 5) with a Texas Ratio of 20.76% based on September 2011 data. The bank has been a FDIC member since 1934 (FDIC Certificate # 1852).

How This Rate Compares

For reward checking accounts available nationwide, the best rate is 4.09% APY but the balance cap is only $10K. This is available at Consumers Credit Union. Two extra perks are that the rate is guaranteed until 6/30/2012, and the credit union has a nice refer-a-friend bonus.

Another good nationwide deal is at INOVA Federal Credit Union which has a reward checking account called Ovation Checking that offers 3.00% APY for balances up to $20K.

You can often find better local deals. The best reward checking in the nation currently offers 4.00% APY on balances up to $25K.

Finding the Best Reward Checking Account

If you're new to reward checking, my post on the common reward checking traits should be useful. To compare reward checking accounts based on interest rates and balance caps, you can use our reward checking rate table. Refer to this post for details on how to use the rate tables.