High CD Rates from Major Banks - Bank of America, WaMu, Wachovia

It started about a month ago with Wachovia when it started offering very competitive Featured CDs. These were suppose to end last week, but they've been extended. Last week Bank of America came out with a very high yield on its 7-month High Yield Online CDs. WaMu is the latest one to offer high CD rates, and it currently has the best deal for a CD term under one year. Below is a summary of these special CDs as of 7/21/08:

4.11% APY 7-Month CD @ Bank of America (account review)
4.00% APY 6-Month / 4.25% APY 12-Month CD @ Wachovia (account review)
4.25% APY 8-Month / 12-Month CD @ Washington Mutual (account review)

When the Fed was cutting rates like crazy earlier this year, I thought we wouldn't see 4% CDs again for some time. But perhaps with increased expectations of higher inflation and future rate hikes along with the banks' need to raise capital (see this BestCashCow article), we're seeing these CD deals. If this continues, it won't be long before we'll see the return of the 5% short-term CD.

Today's Highest Online CD Rates

Bank	Product Term	Interest Rate (APY)
Northern Bank Direct	1-Year	5.60% APY with $500 minimum
Finworth, a division of InsBank	1-Year	5.38% APY with $50,000 minimum
TotalDirect, a division of City National Bank of Florida	1-Year	5.35% APY with $25,000 minimum
Dollar Savings Direct, a division of Emigrant Bank	3-Year	5.00% APY with $1,000 minimum
First Internet Bank of Indiana	3-Year	4.66% APY with $1,000 minimum
IncredibleBank	3-Year	4.58% APY with $1,000 minimum
First Internet Bank of Indiana	5-Year	4.55% APY with $1,000 minimum
BMO Alto, a division of Bank of Montreal Harris	5-Year	4.50% APY with no minimum
Department of Commerce	5-Year	4.34% APY with $500 minimum

Bank

Product Term

Interest Rate (APY)

Northern Bank Direct

1-Year

5.60% APY with $500 minimum

Finworth, a division of InsBank

1-Year

5.38% APY with $50,000 minimum

TotalDirect, a division of City National Bank of Florida

1-Year

5.35% APY with $25,000 minimum

Dollar Savings Direct, a division of Emigrant Bank

3-Year

5.00% APY with $1,000 minimum

First Internet Bank of Indiana

3-Year

4.66% APY with $1,000 minimum

IncredibleBank

3-Year

4.58% APY with $1,000 minimum

First Internet Bank of Indiana

5-Year

4.55% APY with $1,000 minimum

BMO Alto, a division of Bank of Montreal Harris

5-Year

4.50% APY with no minimum

Department of Commerce

5-Year

4.34% APY with $500 minimum

Comments

Drew

July 24, 2008

These are not "HIGH" rates. Historically, these rates are very low.

However, they are near the top of what you can get today.

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ktexas

July 27, 2008

Yes, competitive would be a better term to use than high. These rates would be considered low last year when you could get a six percent short-term CD.

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ktexas

July 31, 2008

The competitive CD rate didn't last long at BofA. The website is now showing 3.30% for this 7-mo CD for Texas. They were recently advertising a 4% APY 7-month CDs at their branches in many states so this may still be available. Also, Countrywide Bank is still offering a 4.10% APY 7-month CD as of this morning.

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ktexas

August 07, 2008

WaMu just increased its 12-month Online CD to 4.50% APY!

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me

August 08, 2008

Hi there

I just saw that WaMu did increase its cd to 4.50 percent.Are they a good bank..I want to lockup 200,000 and would love 5 percent..Is this bank in trouble..I did speak to FDIC and depending on how you name the accounts you can have over 100,000 in the bank..

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ktexas

August 08, 2008

WaMu has been hurt by its subprime business. To play safe, I would keep under the FDIC limits. There are ways to insure over $100K. WaMu has some details about this at the following link:

http://www.wamu.com/customer_service/questions_answers/faq/personal/personal_savings/certificate_of_deposit/SC2T3Q15.htm

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Sam Cass

August 09, 2008

You can have over $100,000 K if you use a revocable trust. You can also have a account under the name of a spouse or child.

More on revocable trusts:

http://www.fdic.gov/deposit/deposits/insured/ownership5.html

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Anonymous

September 06, 2008

They just wrapped up an offering 13mo CD for 5% APY. or 4.25% for 8 mo. CD

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Bailout

January 06, 2009

LOL, the high rates are gone! Thanks to consolidation there is no more competition. The gov wants you to spend not save.

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