Certificate of Deposit Rate Forecast

Sometimes I hate being right. I am often asked for a Certificate of Deposit rate forecast and last week I made a doozy. Unfortunately, it seems to be coming true.

I predicted that 1-year CD rates would be heading towards 0.50% and 5-year CDs down to 1.50%. When you remove the top players, we are quickly approaching those numbers. Which also means that the top players are likely to begin going down.

Institutional jumbo CD investors are especially hard hit. The top player such as Alliant Federal Credit Union still has a 1.75% APY for 1-year, but it isn’t available for institutional CD buyers. And once you have $250,000 of personal funds with them you have to move on down the list. The average for the top 10 and top 20 certificate of deposit rates is quickly decreasing.

As with any investment vehicle, those who try to time the market generally don’t fare so well. That is why I believe long-term CDs with low penalties are a good option. You get some better yield now and have a fixed cost to close if rates go up anytime soon. However, rates rising anytime soon doesn’t seem likely.

If you have jumbo investment needs, give us a jingle and we’ll let you know what we can do.

Some Rates to Consider

[Note: Updated: 8/23/10]

I haven’t posted rates for sometime. So here are a few that I’m aware of. These rates are for personal deposits. Rates are posted as the APY unless stated otherwise.

Alliant Federal Credit Union — 1-Year at 1.75%, 18-months at 2.00%, 2-year at 2.25%. They pay interest at maturity only. They also offer these rates for IRAs. Membership is open to everyone through the National PTA. There is a one-time $25 charge.

Already have Alliant, try Fort Knox Federal Credit Union. 14-months at 1.75% and 23-months at 2.30%. They can pay interest monthly if you need the income and also do IRAs. Membership is open to everyone through the American Consumer Council/Kentucky Chapter. It costs $15.00.

If you don’t like credit unions and want a bank, try Sallie Mae Bank. They have a 15-month CD at 1.55%. There is an online process to complete to open your CD.

It appears that we will have this low rate environment for quite some time. If you want to hedge against the possibility of lower rates (the longer the Fed holds Fed Funds at 0% to 0.25%, the lower rates will go) then consider a longer-term CD. We have a bank offering a 10-year CD above 2.70% APR with a 90-Day Early Withdrawal Penalty. If you take the penalty and close after 1-year, you would net above 1.73%. After 2-years, it would be above 2.21% and after 3-years above 2.37%. $50,000 minimum.

I can’t provide the bank information for free on this one, but the calculated rates are net of our fees.

Feel free to share CD rates you are finding or contact us if you want info on the 10-year.

Have a great weekend.
cd :O)

$250,000 FDIC Insurance Limit Made Permanent

Sorry that I didn’t get this out sooner. On Wednesday, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This was touted as the largest set of financial reforms since The Great Depression. Only time will tell if that is true or not.

The good news is that tucked into the bill was making the $250,000 FDIC insurance limit permanent. For those with larger amounts, you at least don’t need to worry about watching maturity dates any longer. A husband and wife can now have up to $1 Million insured at one bank. If they add beneficiaries and POD accounts it can be substantially more.

Another bit of good news for many was that the bill made the $250,000 limit retroactive to January 1, 2008. This means that many investors who found themselves over insured at ANB Financial and IndyMac when they failed will recoup much if not all of their losses. This is being handled automatically and we were told by the FDIC that people should be receiving checks within 7 to 10-Days. One problem may be for those that have moved. The FDIC will be using the address on record at the time of the failure. So if you have moved, I would contact the FDIC and see how you can recover your funds.

My family took a big summer trip. What have you been up to this summer? Leave a comment and let me know.

Have a great day,
cd :O)

House Panel Approves Making $250,000 Insurance Limit Permanent

This is pretty exciting news. A story in MarketWatch mentioned that a House Panel has voted 12 to 7 to make the $250,000 FDIC insurance limit permanent. In addition, it would make it retroactive to January 1, 2008. This would certainly help people who lost funds in the ANB Failure in May of 2008 and IndyMac failure of 2008. There were many stories of people being bit by not having POD accounts properly set-up. So this move would help them out. On the other hand, with the FDIC insurance fund already in the red, I wonder what kind of extra burden that will place on the system.

The provision is part of a larger bill to consolidate the Office of Thrift Supervision and Office of Comptroller of the Currency. Now the entire bill will go to the House. If it passes the House, the Senate will vote on it. If it passes and it doesn’t need revisions it will go for signing by President Obama. I’m not sure what else is in the bill, so it may be good to read through it before urging passage, but on the surface it would be helpful.

Even to this day, people are unaware that the current $250,000 limit is temporary and set to expire after 12/31/13. Many people don’t realize the limit is temporary and have been doing long term CDs without paying attention to the maturity dates. So passage would certainly remove confusion.

Certificate of Deposit Rates

Highest Certificate of Deposit Rates

We have seen more rates decreasing again this month. The highest Certificate of Deposit rates for one year with healthy banks are averaging below 1.25%. One Star to Two star rated banks are still popping in around 1.50%. We heard that a bank in Puerto Rico was offering a 2.25%, but only for local credit unions. It has to turn around someday. I’m a using little different format this time.

One Year CDs
Northpointe Bank has top CD rates at 2.05%. Of course there is a catch. It is actually a 2-year CD with no penalty to close after 1-year. So after 1-year it basically becomes a liquid CD. Quite a nice feature. Bank does have some weakness though. Alliant Credit Union has a 1.75%. We’ve featured them before. They have a 3 to 4 star rating depending on whom you ask.

Eighteen Month CDs
Alliant Credit Union has a 2.00%. First City Bank of Florida has a 2.00%. They have a 1-star rating. Aurora Bank FSB (FKA Lehman Brothers Bank) has a 1.78%. They have a 2-star to 3-star rating. And yes, they are trying to distance themselves from their past failures.

Two Year CDs
We have a bank with a 2.50%. They are 3 to 4 star rated. Alliant has a 2Y at 2.25%. Alliant came on the scene a few years ago and has continued to keep their rates quite competitive. And of course as I mentioned above, Northpointe has a 2.05%.

Three Year CDs
First Federal Bank of the Midwest has a 37-month at 2.75%. They have a 4-star rating. Alliant Credit Union comes in second with a 2.50%. Pentagon Federal Credit Union also has a 3-year at 2.50%. They have a 4-star rating.

Five Year CDs
Acacia Federal Savings Bank has a 3.20%. They have a 2-star rating. Nationwide Bank has a 3.10% and only a 6-month penalty to close. Ally Bank is supposed to have a 60-Day penalty and their rate is 2.99%. At least they could have made it an even 3.00%.

Please remember that although we strive for accuracy mistakes can be made. Please verify federal insurance, rates, and ratings with any institution you are looking to make deposits with.

Bank and Credit Union Reviews

Bank and Credit Union Reviews

We have added a new section to the main part of our site. I may end up moving it to the blog, but for now, the blog will host Bank and Credit Union Reviews and the static site will host the rates by state. The short-story is the blogging software we use (WordPress) does have limitations when you want to be able create posts that would only show on certain pages.

If you would like to share your experience(s) with a bank or credit union, please leave a comment here. Eventually, we hope to have a good set of information so others can make more educated decisions about where they decide to deposit their money.

Have a blessed day.
cd :O)

CD Rate Update
CA CD Rates

CD Rate Update

Have a couple of good CD rates.

14-mo at 1.93% APY. Bauer — 3-Stars. TheStreet — B-.
FDIC Insured Bank.

2-year at 2.49% APY. Bauer — 4-stars. TheStreet — D+. This is sort of an enigma. We use a third rating system that also rates them above average. I looked at the data and they did have quite a charge off and the reserves they have set aside may not cover future loan losses. So TheStreet may actually be the better rating. Of course, they are FDIC insured.

$100,000 minimum. Call and mention the blog post for a 20% discount on our fee (0.12% instead of 0.15%). Our number is 800-234-4605.

Looking for free rate information:
Acacia Federal Savings Bank — 15mo at 1.64%.

If this post was helpful and you haven’t subscribed yet, sign up for our rate alerts. Free or paid we do our best to provide value. If you are a subscriber, tell your friends.

Have a great weekend. My youngest daughter will be doing a ballet performance.

Have any good deals, share them.
cd :O)

Institutional CD Rate

We’ve got some really good specials today and they will probably last a few days at least. Problem is it is only available for other Banks and Credit Unions. The Bank is FDIC insured and has a 3-Star Bauer Rating. They don’t want to deal with the CIP info that would be necessary for corporations or individuals.

We do have a fee, but even taking that into account, the rates are well above other things we are seeing.

This would be great for Bank trust departments managing pension funds, retirement accounts, etc.

Rate is great for credit unions that have excess cash on hand.

There is a $200K minimum, but sometimes they’ll let us send $100,000.

Rates:
2Y — 2.25%
3Y — 2.75%
42M — 3.00%
4Y — 3.00%
5Y — 3.50% (only a 6-month Early Withdrawal Penalty)

So call us at 800-234-4605 or refer someone. We’ll pay $50 for a successful referral. Mention this blog post and receive a 20% discount on our fee.

cd :O)

CD Rates around the Nation

Well, I finally completed the article writing challenge. I wrote over 15,000 words in 30-days. Those that know me, probably wonder how I kept it so short. :O)

Anyway, if you are curious about my adventure, check this out, How to Make Money Writing Articles

Many of the articles I wrote featured CD rates in other states. Some of the rates aren’t available outside those states and some may have changed, but a good list of banks to check on from time to time. Here are those articles.

Top CD Rates in America
Best New Jersey CD Rates
Michigan CD Rates
Florida Bank CD Rates
Texas CD Rates
California CD Rates

I hope this has been helpful. My plan is to move much of the material to the site and try to keep rates up to date. I will keep you posted as that comes along. Have an awesome day.

My life verse: Micah 6:8.
cd :O)

2.00% CD Special (13-Mo. Term)

The 2.00% -1year CDs have almost all but disappeared, especially in a healthy bank. Well our searching high and low has found one. Okay, its a 13-month term, but what is 30-days among friends. $100,000 minimum, $250,000 is okay, too. This bank is FDIC insured. They have a 5-star rating from Bauer. The Bank isn’t a mega-bank so not sure how long the rate will last.

[Update 4/7/2010: The above rate offer has expired. I will still extend our discount offer on other purchases however.]

Send us a contact request or call and mention this blog post for a 20% discount on our fee. This rate is only good for personal funds only. Other banks and credit unions aren’t allowed, sorry.

Also as mentioned earlier, I’ve been busy completing articles for a 30-Day challenge. Here are some of those if you want some bedtime reading.

Best CD Rates – March 2010 Update Redux
Is My Bank Healthy
How Much FDIC Insurance Do I have
Credit Rating Agencies

And not to get Biblical on you, but check-out Psalms 118:8. It is reported to be the exact middle of the Bible when it comes to number of verses before and after. It is sandwiched between the shortest chapter, Psalm 117 and the longest Psalm 119.

Have a blessed day.
cd :O)