Leading 5-year CD rates rebound to 30-month high
Could it be that 5-year CDs have truly turned the corner?
Our most recent survey of the best nationally available deals might lead you to believe so.
The new leader, Connecticut's Northwest Community Bank, is paying 2.28% APY with a $1,000 minimum deposit for in-state savers and $5,000 minimum deposit for out-of-state customers.
That's up from the 2.16% APY our former leader, EverBank, was paying in late January, and the highest nationally available bank rate since September 2011.
Unfortunately, buying a CD from Northwest Community Bank is a long, paper-intensive slog . (More on that later.)
But no worries.
GE Capital Retail Bank just raised its return on 5-year CDs to 2.25% APY. Its online application process is much quicker and easier. If you can handle the hefty $25,000 minimum deposit, this is the way to go.
Isn't it great to have some choices again?
It was virtually impossible to find a bank paying even 1.9% APY last March. And it would have been totally impossible had it not been for one irrational deal that lasted all of five days.
Now there are 14 banks paying 2% or more, up from 10 banks in our late January survey.
There hasn't been a corresponding uptick in the average return on 5-year CDs. It's still 0.80% APY, which is not much higher than the record low of 0.77% APY set last spring and summer.
We can only hope that the leading banks will force their lagging competitors to start paying more, too.
Here are the 11 top-paying deals, as of today:
Top 5-year CD Rates
|Northwest Community Bank||2.28%||$5,000|
|GE Capital Retail||2.25%||$25,000|
|State Farm Bank||2.05%||$500|
|GE Capital Bank||2.05%||$500|
|State Bank of India-NY||2.05%||$5,000|
To qualify for this list, a bank must allow savers from all 50 states to buy its certificates of deposit online or through the mail.
Click here to compare these returns with the top CD rates from dozens of banks in your area.
Our CD calculator will help you figure out the interest you'll earn, for any term, amount and interest rate.
How to buy the top 5-year CD rates
|Northwest Community Bank||A community bank with six branches in Connecticut.||www.nwcommunitybank.com|
|GE Capital Retail Bank||One of two online banks, each with its own FDIC insurance, that are subsidiaries of GE Capital Corp., the financial services unit of the manufacturing giant.||banking.gecrb.com|
|Barclays||The online American operation of the worldwide British bank with more than $2 trillion in assets.||www.banking.barclaysus.com|
|iGoBanking||The online division of Flushing Savings Bank, which has 17 locations in New York.||www.igobanking.com|
|Dime Savings Bank of Williamsburgh||A community bank with 25 branches in the New York City area.||www.dime.com|
|EverBank||Primarily an online bank with 14 branches in Florida.||www.everbank.com|
|State Farm Bank||The online bank of the insurance company.||www.statefarm.com|
|GE Capital Bank||gecapitalbank.com||The other bank that's a subsidiary of GE Capital Corp.|
|State Bank of India-New York||The FDIC-insured New York branch of India's largest bank, which operates independently of other U.S. branches.||www.statebank.com|
|Virtual Bank||The online division of Sabadell United Bank, which has 23 branches in Florida, and is owned by Banco Sabadell, Spain's fourth-largest bank.||www.virtualbank.com|
|Intervest National Bank||A community bank headquartered in New York City. It has one branch there and six branches in Clearwater and Pinellas counties in Florida.||www.intervestnatbank.com|
Let's get back to the challenges of buying a CD from Northwest Community Bank.
If you live near one of its six Connecticut offices — they're in Avon, Winsted, Granby, East Granby, Torrington Beach and New Hartford — you can do it in person.
If not, you'll have to make the purchase by mail and your rate won't be locked in until the bank has the necessary documentation and your initial deposit.
That means that if your check arrives after the bank cuts its rates, you're out of luck. Of course, you won't be required to purchase the CD, but you also won't get the higher rate.
Since this is being marketed as a "CD special" on Northwest Community's website, it might be a short-lived deal. You ought to move quickly if you want in on it.
You don't have to go through any of that with GE Capital Retail. CDs can all be done online or over the phone through one of their banking advisers.
You'll sacrifice a few bucks' worth on interest over the next five years, but it's a much faster and surer way to lock in 2.25% APY.
Contributing editor Darci Swisher contributed to this report.
Mitch Strohm on Google Plus.