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A 12-Month CD That Pays 2.60% — Really

Posted in CD Rates by DealMaven
May 4, 2010 09:05 AM - 8 Comments

United Central Bank is offering its checking account customers an extraordinary deal on CDs.

United Central Bank is offering its checking account customers an extraordinary deal on CDs.

The Fixed Rate Super Saver Installment CD is paying 2.60% APY with a minimum deposit of just $1,000.

The same return is available on terms of 12-, 24-, 36- or 60-months.

The shorter maturity dates are clearly the best choices, with this deal beating the top nationally available rates on 1-year certificates of deposit (1.80% APY) and 2-year CDs (2.53% APY).

United Central limits the availability of its checking accounts — and therefore this CD — to customers who live near its branches in Texas, Virginia, California, Georgia, Illinois, New York and New Jersey. (A list of every branch along with a map is on its Web site.)

This is why we urge everyone to ask your bank if it has special CD rates, which are often called relationship rates, for checking account customers.

Use our database to compare this deal to with the best CD rates from scores of other banks.

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Comments (8)
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8 Existing Comments

  1. SK said:
    on May 4th at 01:27 pm

    Call for more info… This CD is not what it seems…

  2. Mojave Jack said:
    on May 4th at 03:00 pm

    According to the website:

    Super Saver Monthly Investment Plan

    United Central Bank Super Saver Accounts are a great way to save for a large purchase or savings goal. Each month your UCB checking account will be automatically debited for a predetermined amount and transferred to your Super Saver CD, allowing you to effortlessly save towards your goals.
    Product features:

    * Monthly auto-transfer from a United Central Bank checking account.
    * Interest earning account (click here for current Interest Rates)
    * 12, 24, 36, and 60 month installment CDs available.
    * Interest compounded and paid monthly.
    * A penalty may be imposed for early withdrawal.

    So it appears to be more than just the inital deposit that’s required. Don’t know what the minimum required transfer is, if you can change the transfer amount during the term of the CD, or stop transfers. Seems to have potential for the right group of people, but not a no brainer.

  3. Mojave Jack said:
    on May 4th at 03:13 pm

    Was curious so I did a bit more research and found that the only branch in NJ is not near me, though it’s no too far from my son’s college.

    Accounts must be openning in person. Cannot do so via the internet.
    The monthly transfer cannot be changed once it’s established.
    The initial ballance is the same as the monthly transfer.
    The minimum to open is $10

    Kinda sounds like a variation on the old “Christmas Club” account with some better features as long as you plan it correctly.

  4. John Smith said:
    on May 5th at 01:06 am

    Uh… I just looked… As of May 10th, CD rates are *not* 2.60% for a 12-month. Not even for a 60 month! Knew it was too good to be true…

    60 Month
    $1,000.00 2.25%
    48 Month
    $1,000.00 2.00%
    36 Month
    $1,000.00 1.50%
    24 Month
    $1,000.00 1.50%
    18 Month
    $1,000.00 1.60%
    12 Month
    $1,000.00 1.20%
    6 Month
    $1,000.00 0.60%
    3 Month
    $1,000.00 0.35%

  5. sangiovese said:
    on May 5th at 01:35 am

    Bankaholic website blew it again. Seems this site is right half the time, but bad information is better than no information. You have to check and double check.

  6. Mojave Jack said:
    on May 5th at 09:00 am

    The CD rates *ARE* 2.6%. The rates you quoted are for CDs. You have to look at Fixed Rate Super Saver Installment CD for the 2.6% rates.

  7. BankVibe.com said:
    on May 6th at 06:09 am

    @john smith – United Central Bank IS offering a 12 month CD at 2.60% APY BUT it is a supplemental product that is only available with one of their checking accounts. To view the 12 month rate Bankaholic mentioned you need to click on the link saying “Fixed Rate Super Saver Installment” which is below their normal deposit rate offerings – the rates you were clearly referring to.

  8. DealMaven said:
    on May 6th at 03:29 pm

    OK, we admit it. We didn’t explain this as well as we should have.

    United Central Bank is paying 2.60% on 12-, 24-, 36- and 60-month CDs that are part of the Fixed-Rate Super Saver Installment Accounts.

    But they don’t work like traditional CDs.

    Instead of making a single big deposit when you open the account, you decide how much you want to have in the CD by the time it matures.

    The bank then calculates how much you must save, in equal monthly payments, to reach that goal.

    Let’s say, you want to accumulate $1,500 over 12 months.
    You make an initial deposit of $125 and every month after that the bank withdraws $125 from your checking account. After a year you’ll have put $1,500 into the CD and earned interest, which is compounded monthly, on the growing balance.

    The advantages are obvious. You’re forced to save money and the 2.60% APY you earn on a 12-month CD is not only better than the 1.80% you’d earn on the best one-year CD, but it also beats the top savings rate of 1.75%.

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