Finding Good Community Bank CD Rates

Do Community Banks Offer Competitive CD Rates?

The declaration of Bank Transfer Day got me thinking about the community banks in my area (outside Palm Springs, Calif.) whose brick-and-mortar branches I drive by regularly on my way to somewhere else.

With the exception of Rabobank, I hadn’t considered any of them as possible candidates for new certificate of deposit accounts for quite some time. I’d assumed their CD rates weren’t competitive with the nationally available rates I follow daily. I decided to take another look, in the spirit of prevailing anti-big-bank sentiment.

Unable to remember all the names of these community banks, I started by looking in my outdated (2009) Yellow Pages under “Banks.” This reminded me of just how many of our Southern California-based banks had gone belly up in recent times.

Local banks listed, but now defunct, included Downey Savings and PFF Bank & Trust (both acquired by U.S. Bank), La Jolla Bank (snapped up by OneWest Bank) and Canyon National Bank (bought by Pacific Premier Bank). Not all that surprising, given that these institutions had undoubtedly bet heavily on real estate.

Once I’d compiled an accurate list, I started checking yields. Unfortunately, at only one bank was I pleased by what I found: Balboa Thrift & Loan. With about $180 million in deposits, Balboa boasts a five-star Bankrate Safe & Sound rating.

Better yet, on the day I checked, its 24- and 36-month CD rates were 1.26% and 1.51% APY, respectively — competitive, although a bit paltry for me. I’ve put Balboa on my radar screen, though.

Focusing on 36-month certificate rates at other banks, I at least found some with yields of at least 1% for a $10,000 minimum deposit — 1.20% at First California Bank, 1.01% at El Paseo Bank and 1.00% at Pacific Premier Bank.

Palm Desert National Bank (only one Bankrate star) offered 1.06% APY on a 2-year CD (its longest posted maturity).

But none of these was robust enough to justify a branch visit to follow up. (All were well below the top nationally available 3-year rates, but well above the national average of 0.69% APY.)

One of the worst 3-year APYs I discovered (0.65% APY) was at Rabobank — at which I have several certificate accounts. I like Rabobank because, although its everyday rates are uniformly awful, it sometimes offers generous promotions.

I’d like to encourage the other community banks on my list to follow Rabobank’s example. I’ll be happy to provide them my email address and phone number should they wish to contact me about it.