bank rates

5-Year CDs That Pay Off Short-Term, Too

Here are four more banks offering a high enough interest rate, while charging a low enough early withdrawal penalty, to make their 5-year CDs a better deal than the top-paying 24-month CDs.

Here are four more banks paying a high enough rate, while charging a low enough early withdrawal penalty, to make their 5-year CDs a better deal

They’re all paying 3.25% APY with an average early withdrawal penalty of 6 months worth of interest.

If you cash one of those CDs in after a year, the effective return would be about 1.6%, or slightly less than the 1.9% you can earn with the best 12-month CDs.

But if you hold them for two years, the effective rate rises to 2.4%, which is more than the 2.25% APY you can earn from the top-paying 24-month CD.

The banks offering these terms on nationally available 60-month CDs are:

Bank United, with 75 locations in Florida, which requires a $5,000 minimum deposit.

DimeDirect.com, the online operation of Dime Savings Bank of Williamsburgh, which has branches in the New York area, and requires a $500 minimum deposit.

Hudson City Savings Bank, with branches in New York, New Jersey and Connecticut, which requires a $5,000 minimum deposit.

iGOBanking, the online division of Flushing Savings Bank, which also has branches in the New York area, requires a $1,000 minimum deposit.

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Comments (3)
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3 Existing Comments
  1. Mojave said:
    on March 27th at 10:09 am

    Any of these have an option to fund a new online account with a credit card? Or fund a savings or checking account with a credit card which can then be used to fund the CD?

  2. Mojave said:
    on March 27th at 10:37 am

    Back on March 12, 2010 in You Can Game Some Long-Term CD Rates it was written:

    “DimeDirect.com, the online operation of Dime Savings Bank of Williamsburgh, which has almost two dozen branches in the New York area, charges 24-months worth of interest.”

    Now they’re listed here in the shortest penalty terms. Did they change their policy? Which penalty is correct?

  3. DealMaven said:
    on March 29th at 08:30 am

    Thanks for calling us on this.

    DimeDirect.com’s early withdrawal penalty is 24-months worth of interest, not six.

    It doesn’t belong on this list. Sorry for the brain fart.