TD Ameritrade is sending out notices to some of its clients offering a new callable step-up CD offered by Toronto Dominion, its parent.

This new product - which offers an initial 3.50% APY interest rate - is dramatically more sexy than their offerings just a few months ago which we discussed and recommended against here.

After two years, the newly-offered Toronto Dominion CD will pay 4.50% APY for years 3 and 4 and 5%, if it isn’t called away sooner by the issuer. The issuer has the right to call the CD any time after year 1.

BestCashCow has never liked brokered CDs. We recommended that they be avoided when rates where much lower and we basically recommend against them now for the same reason. Since they cannot be broken with the payment of an early withdrawal penalty, they represent a significant risk to anyone who may require earlier liquidity. Since this CD has a maximum maturity of 5 years, should you need to get out of it in the early years, you could take a real bath trying to find liquidity in a market that doesn’t exist (where TD Ameritrade is the only buyer). Should you die before the CD’s maturity, your heirs will likely inherit a fraction of what they would inherit were you to buy a straight 5-year CD.

Moreover, interest rates are presumably still rising and the Fed is likely poised to bring the Fed Funds rate above 3% by the end of 2019. If you must reach for yield, you can get 2.70% on a one-year CD and then have the liquidity in 12 months to find a new product with a higher rate.

But, we’ve just had an election that has left the US in an even worse place than we were immediately after the Russians handed Trump the Presidency 2 years ago. And, that opens up the prospect of falling rates. Should that happen, this product will be called away on the first possible call date in November 2019. While you may have brought in 80 basis points more than you would have made in the 1-year CD that pays 2.70%, you will not have been compensated for the risk that you took.

Sexy? Yes.

But, dangerous as hell.

Your better bet is to look at online one-year CDs.

Editor’s Note: The Toronto Dominion product is listed under CUSIP 89114QER5.

Downey Savings Bank is offering a whopping high rate of 4.68% APY on an 18-month CD. That's over 22 basis points higher than the next best 18 Month CD rate on the BestCashCow CD Rate Table. There is a relatively low minimum balance requirement of $1,000.

Downey Savings is based in California and while you don't have to be a California resident to take advantage of the offer, it can only be opened via one of their branches - which are all in California. Downey has experienced some financial problems lately as its stock has dropped from a 52 week high of $63 to a little over $2 today. On August 18, California thrift regulators imposed some restrictions on Downey including limits on dividends, asset growth and new borrowing. Downey also stated that it experienced an increase in deposit withdrawals after the bank posted a $219 million net loss in the second quarter of 2008.

If you do decide to take advantage of this offer, be sure to stay within FDIC insurance limits. Downey's recent history reads a bit like Indymac's in the days before they were taken over by the FDIC.

The State Bank of India has been very aggressive with their CD rates and today they made a major move. They now have the top 6 month CD rate at 4.32% APY and the top 12 month CD rate at 4.68% APY.

The minimum deposit is $5,000.

These CDs are offered via the State Bank of India's New York branch, which is a subsidiary of State Bank of India, the largest bank in that country. The bank's New York branch is FDIC insured (FDIC Certificate # 33682). We looked for a Bauer rating for the bank and couldn't find one for some reason. But the fact that they are listed at the FDIC website does mean that they are a legitimate bank, although we note that there appears to be an open issue whether branches other than the New York branch are covered by the New York branch's FDIC Certificate.

While a CD can be opened online or via mail, the application must be printed out and mailed back to the bank. Customer service is also a bit spotty. I've called over there and was able to get someone via phone but we've called on other occasions and have had trouble getting through. I suspect that they are pretty overloaded. Still, if you are persistent you should get through.

A couple of additional points of CDs at the State Bank of India:

• Early withdrawal penalty is 90 days of interest for 1 and 2-year CDs, 180 days for the 3 year CD, and 270 days for the 5 year CD. The bank reserves the right to refuse such withdrawals.
• If you're a new customer applying by mail, you will need to provide a notarized copy of your driver's license.

This is not a slick operation but there high rates make this a bank that warrants a look, as long as you aren't looking for white glove service.

Check the best online 6-month CD rates or check the best online 1-year CD rates.