Flagstar Bank has been doing some really strange stuff with its 36-month CDs.
For much of the fall it was promoting quite a good rate on its Web site: 3.00% APY, with a minimum deposit of only $500.
At one point that would have been good enough to top our rankings of the best 36-month certificates of deposit — if the deal had been available nationwide.
But it wasn’t because Flagstar had the odd policy of paying savers who lived near one of its branches in Michigan, Indiana or Georgia less than other customers — 2.75% APY.
Around Thanksgiving, the bank dropped its rate to 2.85% APY. On Dec. 4, the return fell to 2.60% APY, four days later it hit 1.75% APY and on Dec. 16 it reached 1.50% APY — half of what it had been just three weeks before.
That was a pretty stunning drop even by last year’s dreadful standard for rampant rate-cutting.
Then, on Monday, Flagstar reversed course and increased the yield on its 36-month CDs back to a respectable 2.35% APY.
What other bank in the country is boosting the return on its CDs by almost a point in this market?
Oh, and it’s still screwing the locals. Live near a Flagstar bank and you’ll only earn 2.09% APY.
We’ve asked Flagstar about all of this and were passed around to a couple of spokespeople, the last of whom promised to get back to us.
We’re still waiting for the phone to ring with an explanation for this strange and volatile pricing.