bank rates

Bank That Offered Top CD Rates Seized

Tennessee Commerce Bank had offered top long-term CD rates.Regulators on Friday closed Tennessee Commerce Bank, which had been one of two banks to offer the top nationally available 60-month CD on our CD Rates Leaderboard.

Its deposit accounts were transferred to Louisville, Ky.-based Republic Bank & Trust.

The immediate impact:

  • If you hold a certificate of deposit from Tennessee Commerce Bank, your money remains insured by the Federal Deposit Insurance Corp.
  • CD rates at Republic Bank & Trust are significantly lower than at Tennessee Commerce Bank.

So, bad news for savers: That’s one more nationally available deal gone. Even if Republic Bank someday offers more competitive CD rates, a customer service representative confirmed it sells CDs only to residents of Kentucky, Indiana, Ohio and Florida.

More troublesome for existing account holders is what will happen to their rates.

Tennessee Commerce Bank often offered good nationally available CD rates, and the new owners have strongly hinted they will cut those rates.

In an online FAQ for Tennessee Commerce Bank customers, the new owners write:

“Your rates on your Certificates of Deposit may change to more competitive rates. As a deposit customer you will receive a letter from Republic Bank via U.S. Mail within 7 days of the transaction with an enclosure titled ‘Notice of Rate Changes to your Interest Bearing Deposits’.”

That’s disheartening.

At the time of its seizure, Tennessee Commerce not only held the top nationally available 60-month CD rates (tied at 1.95% APY with Intervest National Bank), it also was among the leaders in 36-month CDs.

As recently as April, it paid 2.65% APY on 60-month CDs. Accounts paying that rate — as well as higher long-term rates offered in 2010 and earlier — are in jeopardy.

That’s because Republic Bank isn’t obligated to honor the CD rates customers were promised by Tennessee Commerce Bank.

It could slash rates going forward on certificates of deposit customers already purchased. Of course, those same customers can walk away penalty-free with their full principal plus any interest accrued to date.

Republic Bank ( is headquartered in Louisville, Ky., and has 42 branches in Kentucky, Ohio, Indiana and Florida.

Republic Bank carries five (out of five) stars on’s Safe & Sound rating system. Tennessee Commerce was a one-star bank at the time of its seizure.

The Nashville Business Journal cited the bank’s loan portfolio — including equipment loans and leases — as a reason for why it failed.

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  1. lightrider said:
    on January 31st at 06:05 pm