First, you check-out www.bromoney.com. They do a lot of blogging on current good CD deals. Second, try www.bankfox.com. I’ve mentioned them before. Finally, BankDeals.blogspot.com. I believe they are changing their domain soon.

Of course, as we make posts, if you have subscribed you’ll get a notice. If we don’t talk to you, have a Merry Christmas and Happy New Year. Thank you for you continued support of our site and services.

cd :O)
Faith-Family-Friends

The big player seems to be Alliant Credit Union. They actually have CD rate specials quite often. If you are an existing member the process is much faster than trying to become a member and then get a CD done. So even if you run out of time, I think it would be a good idea to complete their process. The hardest thing with them is they don’t guarantee the rate beyond the current day. So if you put the IRA process into gear and the rate drops, you’re out of luck. Anyone can become a member by first joining the National PTA. This is $25, I believe. You then can complete the Alliant member application. Be forewarned that their online process has proven difficult for many in the past. It asks a series of questions about information it pulls from the credit bureaus and I’ve known several people that claimed the information was erroneous and thus they couldn’t complete it online. You can always go the route of snail mail if necessary. Anyway, the current highest IRA CD rates are as follows:
1y — 2.30% APY
2Y — 2.55% APY
3Y — 3.00% APY
5Y — 3.25% APY.

Their NCUA# is 67955 and they are based in the windy city of Chicago, IL. They are quite large with over $6 Billion in assets. As of March 2009 data, they have a 4-star rating.
Website

Another big player is Ally Bank, but they don’t offer rates for IRA CDs. People’s Trust Federal Credit Union has an 18-month IRA for 2.12% APY. They are based in Houston, TX. They have a 2-star rating. People’s NCUA # is 177. Looks like they have been around for a while.I did have to make quite a few clicks to get to the rates. I hate that. The link below should save you some time.
Website

If you’re wanting to stick with a bank try Nationwide Bank, FDIC# 34710. Their process isn’t too difficult. They are about $2.25 Billion in assets, had a nice second quarter profit, and 4.5 stars. They are based in Ohio. Rates are:
1Y — 2.05% APY
2Y — 2.35% APY
3Y — 2.60% APY
5Y — 3.20% APY.
Website

Well there you go.

Happy Investing.
cd :O)

CD Rates California

OneWest Bank, FSB — OneWest was formerlly IndyMac Bank which the FDIC took over. The FDIC actually kept the bank open and ran it as IndyMac Bank, FSB. They finally found a group of investors to move it back to private ownership. The investors got to take the good and leave the bad so have had a nice healthy start. They are currently about $17BB in assets with a very healthy 11.8% capital ratio. They made about $377MM in the first 6-months. Their CD Rates are not limited to people in California and are currently quite competitive. They will also accept IRAs, but the rates are a little lower. The are currently pushing the 1-year CD most heavily.

Visit their site for current rates and to open a CD. They also have a nice savings/money market account for 1.75% APY. Check the site for restrictions and details.
Rated 4-stars (****).FDIC# 58978.

Imperial Capital Bank — Imperial Capital has good rates and they offer either an on-line process or CDs can be opened through the mail. CD Rates are:

FDIC# 26348. The bank has $4BB in assets, but their Capital ratio is quite low at 4.20%.
Rated 1-star (*). Site.

The California Credit Union — California CU is open to all. You have to either be a current member of the PTA or PTSA or make a $5 donation. You can also gain membership by contributing to an organization like PBS. They need an additional $5 to go into a savings account. They are large for a credit union with about $1.5BB in assets. They have a 9.53% capital ratio.

They currently have a loss, but still are rated 3-stars (***). NCUA# 60784. Site.

That’s it for our CD Rates California post.

BBT Banking online

They are a large bank based in the south east of the US. They have about $147 Billion in assets. They indicated that checking accounts and savings accounts can be opened over the phone, but CDs require a branch visit. So it seems like they are good for locals only. The BBT CD Rates were pretty awful, 0.80% APY for a 1-year CD and 1.00% for a 2-year.

However, they do have a $100 bonus on their checking account if you attach Direct Deposit or do 3 Bill pays.

Their FDIC number is 9846.
Phone: 800-BANK-BBT (800-226-5228)
Main Location: Winston-Salem, NC
Rating: 5-stars
Website

Mortgage refinance and mortgage refinance rates also seems to be a popular search for BBT.

That’s all I know about BBT Banking.

cd :O)

Boy, did I feel silly because I didn’t actually have the answer on our site. After all, we help people invest in federally insured banks and credit unions. Of all places, the answer should be able to be found here. And now it is.

And the answer is, there is really no difference as far as federal protection. Both cover your bank accounts (CDs, Savings, Checking, Money-Market) up to $250,000 through 12/31/13. If the Gov’t doesn’t extend that it will revert back to $100,000. Both cover your IRA accounts assuming they are in a bank account and not a securities account up to $250,000. That was a permanent change made in 2004. IRAs are insured separately then your regular bank accounts.

Both are federally guaranteed. The FDIC oversees and insures banks and the NCUA oversees and insures credit unions. However, the NCUA is currently in far healthier shape. Not that I believe the FDIC won’t be able to meet its obligations, you just don’t here about the NCUA having to bail out too many credit unions.

The biggest difference is credit unions overall, are in better shape then banks. We have dealt with countless bank closures the last two years. There has only been a handful of credit union closures. And the reason is the foundational difference between a credit union and a bank. At a credit union, everyone is a member and has one vote, no matter how big their deposits are. The credit union exists to extend the lowest loan rates and highest savings rates it can to its members. Credit Unions are non-profit organizations. Because of their non-profit status, they are limited in what they can invest in. Most of their investments are in boring things like CDs ( :O) ), Gov’t bonds, and treasuries. They are limited in who and what they can lend to. Both of these drastically lower the risk of having problems.

Now, I don’t want my banker friends to get mad at me. Usually, small community banks operate much like credit unions in that they put the people first. However, a bank is a for profit organization. Usually, a small group of investors has put their capital into the bank and they want a return on their money. The pressure for higher returns leads banks to make riskier decisions. And over the last two years we’ve seen the result of that.

So when it comes down to it, there is no difference in your insurance protection between FDIC and NCUA insured accounts. If either a bank or credit union fails that is federally insured, you will get your money back.

I hope that helps. Here is a funny video that you might enjoy on the subject.

cd :O)

Last post,

[Updated: 9/30/09] America’s Credit Union is federally insured by the NCUA. They have a 7-month CD at 2.00% APY, 13-month at 2.15% APY, and a 25-month at 2.50%. Those are really good for this time. They do require $50 to be put into a savings account.

The credit union is federally insured by the NCUA. Currently up to $250,000 through 12/31/13. They have about $344MM in assets and a healthy 7.91% capital ratio. They had a $1.9MM profit for through 6/09. The ratings we use give them 4-stars.

Here is their site.

I hope you find the rates helpful. Leave a comment on your experiences.

You can also view Highest CD Rates for other current rates.
cd :O)

We must never forget.

9-11 Tribute 2006

9-11 Tribute Video

Sandy 9-11 8th Anniversary Tribute

8th Anniversary 9-11 Video Tribute

ChrisCD :O)

Although the talking heads keep pushing that the economy is recovering I think the millions of jobless, may disagree. The talking heads are focused on profit. So if a company can make lots of money while being lean and mean, well more power to them. The problem is we will see profits long before a serious recovey begins. Don’t get me wrong, a company needs profits before it can start hiring, but this will be a slow, slow recovery.

Commercial real estate appears to be the next big problem. Many developers built small business complexes expecting them to be filled with entrepreneurs looking to serve all of the new homeowners. As the complexes remain empty, the commercial property owners can’t afford to continue to take the losses each month. Many are letting them go into foreclosure or selling for steep discounts.

Residential property is still also posing problems. Many states had issued moratoriums on the foreclosing the property and those are beginning to expire. Banks have been trying to hold off showing losses, but they can only do that for so long.

Short-term CD Rates have continued to drop. Our high 1-year at 2.50% dropped to a 2.00%. The next highest rate, 2.35% APY, held this week, we’ll see for how long. Some of the big boys such as Ally Bank and Discover Bank have continued to adjust rates down. Ally Bank had a 1Y at 2.25% for a while, but it has dropped to 1.80%. Some long-term rates have inched up a bit. They had a 5-year CD at 3.70% APY. It stands today at 3.10% APY. Of course, 5-year CDs may not be the best idea right now unless you have a great ladder or the penalty is low for closing the CD early. The other side of the coin, we just don’t know when the rates will be increasing. The Fed is talking like it could be a while. A while could be six-months or it could be over a year. Check-out First National Community Bank (here’s the link). They have some good rates and a 0.25% bonus if you add a “Performance Checking Account”.

So do I have any good news. The workweek as reported for average hours worked increased a little. Income overall snuck up 0.1%. And my kids’ soccer team, the Big Dogs will be starting in Div. B in a couple of weeks. Our highest start ever. Yes, I am a very proud coach and father. So how about you guys? I know you read this. My logs tell me that. But let me know what is going on in your life. Or ask a question in the comments.

Mention this post and receive a 20% discount on our services.
cd :O)

This poses a few problems. First, rate listing services and companies such as ours are basically doing the same thing. We help banks, often times community banks, raise direct deposits to meet their funding needs. For various reasons, deposits such as ours are more attractive than local deposits. Ours may be less expensive, easier to work with, faster to obtain, etc. Those reasons aren’t really part of this post. If Credit Union A purchases a direct CD from me to go into Bank B, it is a brokered deposit. If Credit Union A purchases a direct CD from the rate listing service to go into Bank B, it is not a brokered deposit. It is the same money, the same bank. Everything is the same except for the middle man (or middle listing service). This leads to the second problem. Banks are now using rate listing services to avoid paying the new FDIC assessment on brokered deposits. I can’t really blame the banks for doing this. After all, the law allows them to. But if the FDIC’s concern is that out-of-area deposits pose more of a risk to the bank, then all out-of-area deposits should be properly supervised, managed, and assessed if appropriate.

Another problem (the meat of this post) is under capitalized banks are not allowed to take brokered deposits without a waiver from the FDIC. This is supposed to prevent unhealthy banks from running up their deposits and costing the FDIC even more money. These deposits also can cause a bank to be less valuable to potential acquirers and thus costing the FDIC money. An under capitalized bank is able to take non-core deposits from a rate listing service without a second glance. The rates they are offering are supposed to be at or below the rate cap that the FDIC has published. It appears that no one is policing this. At a minimum, rate listing services should have to build into their programs rate restrictions on under capitalized banks. Below are a couple of examples of current under capitalized banks offering high rates on a rate listing service and attracting deposits.

I’m not going to put the names because I don’t really want to cause problems for the banks. Bank A is currently under capitalized with a Total Risk Based Capital Ratio (RR) of around 5.5%. This needs to be 10% to be considered well capitalized. Their capital ratio is just over 2%. Generally, regulators like to see a 7% or above. The numbers reported on the June Call report are even worse. This bank is currently accepting deposits through a rate listing service with some of the top rates in the country. The rate cap established by the FDIC is 2.93% for a 5-year CD. They are offering around a 3.40%.

Bank B is also currently under capitalized. They have a RR of 6.9%. The capital ratio is 4.6%. These are quite low. This bank is also currently accepting deposits through a rate listing service. Their 1-year CD is around 2.00%. That is higher than many internet specials. The rate cap in place by the FDIC is 1.87%.

I could give numerous other examples. But, I would also like to point out some banks that have failed. These I can name since they have already been closed.

First conclusion: Bank A and Bank B that are currently accepting non-Core deposits are likely to fail soon. Their current ratios are in the same range as the above listed recent bank failures. Second Conclusion: only one of the above listed banks had a significant amount of reported brokered funds. However, all of the above banks at various times could be found on a rate listing service attracting deposits; some of them, within weeks of their failure. Millennium is one of the most interesting. They had $0 reported for brokered deposits, but they took in millions of dollars from rate listing services. [Side note: Union Bank, NA out of Arizona was closed by the FDIC on Friday, 8/14/09. Their RR as of 3/09 was just about 6%. Also on rate listing services quite often.]

Personally, I don’t buy the argument that brokered and/or non-core deposits cause bank failures. But, as a bank is falling into the abyss you will see them quite often offering high interest CDs or savings accounts through the internet (Washington Mutual, IndyMac) or on a rate listing service. The additional deposits didn’t cause the failure, but they certainly make it more expensive for the FDIC and ultimately us, the taxpayers. Since, the FDIC is currently assessing the brokered deposits that banks hold (based on a formula), shouldn’t they also assess non-Core deposits that in reality are the same type of funds? I think you know my answer. What is yours?

I realize my opinion probably won’t be very popular with banks, especially those on the rate listing services. But, I ask you, do you want to have to compete with the high rates being offered by banks such as those listed above? I also ask you to consider what is the intent of the law when it comes to accepting such deposits. The intent of the law is that banks do their due diligence when accepting out-of-area/non-core deposits. Rate listing services currently allow banks to disregard that step.

A commenter even mentions a site I hadn’t heard of for CD rates before. I’ll even be nice and post the link. After all, it helps our loyal readers ,which in the big scheme of things helps us. Check-out, Bankfox. Who knows, maybe they’ll see a bunch of traffic from us and want to repay in kind. :O) They do have a 4-month CD advertised for 2.50% APY. If you want a “good” rate without locking it up too long, that maybe a good bet.

BTW, here is the link to the article. If you leave a comment, let me know. You do have to sign up for a free account in order to leave comments. I did. Market Watch Story.

Finally, just some quick commentary since I seem unable to get an actual newsletter out. Big Ben (Ben Bernanke) commented yesterday that rates would remain low for an extended period of time. That was like dropping a cup of blood in a pool of sharks. Bankers have swarmed around that tender morsel and begun to lower rates. On average, we’ve seen a 20 to 30 Basis point (0.20 to 0.30%) drop in rates. This coupled with continued weaknesses in the economy leads me to believe that even when the Fed does start to increase rates, it will be in quite a slow fashion.

We do still have a 1Y at 2.50% APY. It does require a $100,000. I can’t give out the info for free, but if you contact us from our site or the blog alert, I’ll give you a 30% discount on our fees. This is only good for non-IRA personal funds.

Have a great rest of your week.
ChrisCD :O)