Top CD Rates

We’ve seen a downturn in the Best Bank CD Rates this month. With the FOMC giving signals that they won’t be raising rates anytime soon and the treasury buying their own debt, it has caused yields to drop.

Here are some of the top players in the market.
PenFed Credit Union – 5-year at 4.00% APY
Alliant Credit Union – 5-year at 4.00% APY, 3-year at 3.75% APY, 1-year at 3.15% APY.
Discover Bank – 30-months at 2.75% APY
GMAC Bank – 1-Year at 2.65% APY.
Corus Bank – 6-month CD at 2.32% APY. 1-Year at 2.81% APY
Key Bank – 5-year at 3.25% APY
Visions FCU – 1-Year at 3.05% APY
Wings Financial Federal CU – 1-year CD at 3.04% APY
Mountain America FCU – 5-year at 4.00% APY
Police & Fire FCU – 3-year at 3.75% APY.

Tips for finding the best Bank CD Rates.
Check your local newspaper. Many banks and credit unions will offer local specials because they want to attract relationship deposits. They want you to become more than just a number, but a valuable asset to them. A credit union in our area has been advertising a 7% savings rate on the first $1000.00 after a couple of conditions are met.

After JP Morgan took over Washington Mutual, the Sacramento branches are now becoming Chase Bank branches. As a result they are doing heavy advertising in the Sacramento and surrounding areas such as Yolo, Solano, and Placer County. You will still often find special rates on the internet that are higher, but I believe there is big value in keeping some funds locally. Biggest advantage is quick access if you need money fast.

Next, pick up the yellow pages. Call some of your local banks and see if any have any special rate offers. Some may be willing to pay a premium for some local funds.

Another tip, look at the rates of distressed banks. Many depositors want safety in FDIC insurance and bank quality. This allows the quality banks to offer somewhat lower rates, but troubled banks often have to offer high yield certificate of deposit rates. Bankrate.com has a Safe&Sound rating system. Look for some 2-star banks and see what kind of deals they have.

Finally, there is the internet search. The fact of the matter, no matter which route you go, it will be time consuming. At some point, you have to decide if the time is worth the higher CD interest rates. On the surface, the internet search is easy. You just go to your favorite search engine and type, “cd rates”, “best cd rates”, “ira certificates of deposit”, etc. But, you’ll need to wade through a tone of sites. Compare the interest rates across the sites carefully. Then compare the banks quality. Remember, often distressed banks may have higher rates, but you have to ask yourself how long will they last. Omni National Bank was recently closed by the FDIC and they have been offering some of the highest CD yields for quite some time.

GMAC Bank of Midvale, UT currently has some of the highest CD interest rates in the country.

They have a fairly easy set-up process that is done on-line. Funds can be transferred electronically via ACH (same system that on-line bill pay systems use), through a wire transfer (typically the sending bank charges $15 to $25), or a check sent through the mail. For smaller amounts the ACH is probably the best because usually there aren’t any fees charged. Every dollar spent on fees reduces your overall interest rate earnings on your CD.

GMAC Bank is FDIC insured. Remember all banks that we highlight in our posts are FDIC insured. At times we highlight credit unions with high CD interest rates, as well. We only feature NCUA insured credit unions.

You can verify a bank is federally insured by visiting the FDIC website at http://www2.fdic.gov/idasp/index.asp. GMAC Bank is actually new to the scene, being established in 2004, but GM opened them up with a large amount of assets to begin with and they are already pushing $32 Billion. Banks this size are actually beginning to scare me, because if they do fail, the quickly bring down the reserves the FDIC holds.

GMAC Bank lost about $112 Million dollars last year, compared with a $282 Million dollar profit the year before. They like many other large banks made some bad bets when it comes to loans and investment bets that they made.

Their other CD Interest Rates can be viewed on their site.

Bank of America (stock symbol BAC) has been in the news for a long-time now. Their stock price a year ago was at $43.00. It recently traded as low as $2.53. They traded as high as $55 back in December of 2006. The became the poster child for engineered bail-outs by saving the FDIC from closing Countrywide and then buying Merrill Lynch at a deep, deep discount. But look what it did to Bank of America. Not a pretty picture.

At this point the Gov’t and the FDIC seem bent and propping up Bank of America and their investment arms Banc of America and now Merrill Lynch. Despite the fact that Bank of America has misused tax payer money from TARP and has lobbied to not have to be transparent with those funds.

The sad thing is they and many other FDIC Banks have been allowed to become so big that the Gov’t can’t afford to let them close or fail. Which puts us the tax payers on the hook for a never ending vicious circle of providing bail-out funds.

Will Bank of America Survive? Probably. Should they, I think not. No corporation should hold so much power over a country or the Gov’t. No corporation should be allowed to grow so big that the Gov’t can’t allow them to face the consequences of poor decisions and greed.

FDIC insured banks should have limits placed on them so that they can’t grow to over a certain asset size. The fact is the greed and corruption of Bank of America, Citibank and others is not only affecting you when it comes to the TARP bail-outs, but now the FDIC is assessing all banks with a 20 Basis Point premium. How do you think the banks will pay for that? They will either increase fees, reduce staff, and or reduce your rates. As if the bank CD rates weren’t low enough already?

Bank of America along with Citibank has spent years gobbling up other banks and leaving a wake of bad service and high fees behind them. How much do you pay when you have an overdraft? I say, break them apart. Let the “little” guys by pieces back. Let them purchase near by branches and return them to being in the hands of community banks where they belong. Let them return to serving their communities instead of sucking them dry like vampires.

These mega-banks have broken the trust of America. And the people of America should demand better so that trust can be restored. Many people invested not only in the banks directly, but also into the stocks. The savings of America is probably safe, but the stock investments will probably not return for over a decade.

Small Business of America has been affected. They have seen their credit lines frozen and many have had to close their doors as they couldn’t afford to purchase more product or pay their employees. Have they received a bail-out? No. The banks that wallowed in greed and most likely corruption have been bailed out. The good people have been left holding an empty bag.

Come one America. You are better than this. Rise up and demand better.

Bank of America, you should not survive.

If you need some investment advice, drop by, smart retirement investing tips for beginners.

Bank CD Rate Comparison

In this time of low rates, I thought it would be helpful to provide a Bank CD Rate Comparison.  There are numerous Bank rates out there, but here are some of the best.  I didn’t limit this to just banks, because there are some credit unions that are Federally insured by the NCUA and have better rates than many banks. Your deposits are just as safe and just as insured as if they were in an FDIC insured bank.

Alliant Credit Union, IL — 3.40% APY, 1-year CD — $25 membership fees — $25,000 minimum

4.00% APY, 3-year CD — Click here


Capital One Bank, VA — 4.00% APY, 7-year CD — $5,000 minimum
Note: Capital One has two banks so you can get double the insurance. — Click here


GMAC Bank, PA — 3.00% APY, 1-year and 18-month CD — $500 minimum — Click here

So there are a few rates to help you with your Bank CD Rate comparison. Remember don’t be afraid of credit unions.

And totally un-related to banking, but very much related to those trying to earn an income from blogging. Check out Mark Mason’s free backlinks offer.

Here is an interesting blog, My Recession Survival Guide.

[Updated: 3/26/09] I thought I would take a quick moment to update Pentagon Federal Credit Union’s CD Rates. Unlike many banks of the same size they are quite healthy. Their longer-term CDs are the most competitive at this time.

They have a 3-year CD Rate of 3.50% APY. The 4-year CD Rate is 3.75% APY and the 5-year and 7-year CD rates are 4.00% APY.

For more details on PenFed from my previous post check-out Pentagon Federal Credit Union CD Rates. They have a pretty easy membership process.

Updated: 01/15/09

Also try Bank Rates for more rates on certificates of deposit.

If you want to make far more money than CD interest, check out, A guide How to Make Money Online.