bank rates

Charter Bank 3.00% 14-month CD

Taah-Daah!

We’ve finally found someone paying 3% on a certificate of deposit of less than two years.

It’s Charter Bank, which has six branches in Albuquerque, Santa Fe and Rio Rancho, N.M.

Charter is offering a 14-month, 3.00% APY CD with a $5,000 minimum deposit.

That’s more than double the national average of 1.37% for a 12-month CD, and it’s the first time in several weeks that we’ve seen a 3% CD that wasn’t for at least 24 months.

You can open an account online and the offer is available nationwide. (If you ever have to use the customer service line at 877-918-8726, you can skip the interminable automated answering system and get right to a customer service representative by pressing “8”.)

Charter Bank earns only two of five stars from Bankrate’s “Safe & Sound” rating system, but that’s better than many banks offering top rates. And of course deposits of up to $250,000 are insured by the FDIC.

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Comments (10)
1 Star2 Stars3 Stars4 Stars5 Stars (11 votes, average: 3.64 out of 5)
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10 Existing Comments
  1. maggie said:
    on March 26th at 02:05 pm

    I like this site a lot, you have good deals – at least it’s one place to find if any exist.
    but I am worried about the 2 star rating. On one hand there is a 2 out of 5 rating, but then you say the bank is FDIC insured. if that’s the case shouldn’t the rating given be 5 stars provided you are depositing less than $250K.
    Should the rating system be based on deposit amount then? because basically you are saying everything is safe under $250K…why even bother rating?

  2. DealMaven said:
    on March 26th at 03:48 pm

    Maggie: All good questions.

    All of the banks cited on Bankaholic are insured by the FDIC, so as long as you’re depositing less than $250,000 your money is safe, no matter what.

    But I want Bankaholic users to be savvy investors who know a little more than that about the banks they’re entrusting their money to.

    It’s a sorry fact that banks or savings & loans in financial trouble are often the ones offering the highest rates because they’re desperate for new deposits.

    Bankrate’s Safe & Sound rating system uses 22 tests to determine the relative financial strength of a financial institution and is the best, publicly available measure of a bank’s financial health around. (Bankaholic is also owned by Bankrate, so there aren’t any legal issues involved in using Safe & Sound on the blog.)

    So should you be worried about Charter Bank’s two-star rating? No. Is it worth knowing? I think so.

  3. Jesse said:
    on March 26th at 09:03 pm

    I use Charter One as my local bank and I have no problems with them at all. I had a CD with them before the rates went south and I can’t find any reason to not use them.

  4. BloggingBanks said:
    on March 27th at 05:40 am

    Deal Maven,

    Maybe you could write a post about what happens to bank CD holders when they fail and FDIC takes over.

    I know that “it depends”, but looking at past bank failures over the past 1 year it seems that the CD rates are honored..

  5. Mike M said:
    on March 27th at 09:36 am

    If a bank fails and the FDIC takes over, CD holders are guaranteed to recover the value of their CD including all earned interest to the day when the FDIC takes over.

    There is no guarantee that the CD rate will continue, however. If the bank’s assets are bought by another bank, that new bank may decide to honor the old CDs through maturity in order to keep the deposits and the customers.

    However, if the bank is split apart and dissolved, then you should only expect to get a check for the value of your CD.

  6. Mike M said:
    on March 27th at 09:49 am

    Again, remember that you can buy an I-bond from the government that will pay you just as well over a shorter term. If you buy on the last day of the month, you can sell 11 months and one day later, with a 3 month interest penalty.

    Currently, they get 5.64% for the first six months, then are likely to get 0% for the next “six”, given the deflation we’ve seen from September to today. So for that 11 month and one day period, you would get roughly $27.81 in interest per $1000 invested. Your penalty would be the last three months, or $0. So that’s 2.78% actual return over 11 months and one day, or 3.03% APY. If you have a 5% state tax rate, that would boost the TEY to 3.19%.

    The only way this 14 month CD is better is if CD rates 11 months and 1 day from now are lower than they are today.

  7. Anurag said:
    on April 2nd at 12:54 am

    They require you to send check or wire money in order to open an account. I have emailed them 2 days ago asking how will I receive the money after maturity… I thought that it would have ACH enabled to transfer money to & from the account. I will let you know once I receive reply from them.

    Thanks

  8. walt said:
    on April 2nd at 06:07 pm

    Effective 30 March rate has dropped to 2.725%, minimum $5k.

  9. hazeleyes said:
    on May 1st at 11:16 am

    No such offer at the website link 5/1/09.

  10. Visa711 said:
    on May 15th at 06:45 pm

    FYI, as of 5/1/09, the interest rate on I bonds is now zero, due to deflation. Check back on 11/1/09 when they readjust this to see if it is a good deal again.