bank rates

Highest CD Rates Roundup For Aug. 16

Bringing you the very best CD rates from credit unions and local banks.Savers looking for an edge might want to turn toward small banks owned by ethnic minorities or women.

Minority-owned banks consistently paid higher CD rates than white-owned banks, a University of Wisconsin-Whitewater study of yields between 2002 and 2011 found.

“These are banks that proactively pursue deposits in order to serve their communities,” says Russ Kashian, a professor of economics at UW-Whitewater and co-author of the study, “Do Minority-Owned Banks Pay Higher Interest Rates on CDs?” “Minority-owned banks are often located in less-wealthy neighborhoods with fewer thriving businesses to attract investment, so they need to be more aggressive. They need to provide financial options that reflect people in the neighborhood.”

The yield premium was particularly evident in black-owned banks, even during the recession.

“At a time when the overall economy was in poor health, and with the Black community particularly hard-hit, the Black-owned banks cushioned the financial blows suffered by many in their community,” according to the study. “The banks lowered their CD rates, along with other banks, but lowered the rates by less than the average bank.”

The “BOB effect” — or black-owned bank effect — “can be interpreted as contributing around one-half of one percentage point to the 12-month rate, and one-fifth of a percentage point to the 60-month rate,” the study found.

The banks in the study are one-market institutions, so there are probably geographic restrictions on who can purchase certificates of deposit. But if you live near a minority-owned bank, it might be worth a look.

This week we added two deals to our list of the highest CD rates from credit unions and local banks:

  • Firelands Federal Credit Union in Ohio (www.firelandsfcu.org) pays 1.00% APY on 9-month CDs, 1.60% APY on 12-month CDs and 2.00% APY on 18-month CDs with a $500 minimum deposit. Credit union membership is open to residents of Crawford County or Huron County; York Township in Sandusky County; and Adams, Reed, Thompson and Venice townships in Seneca County.
  • Fort Knox Federal Credit Union (www.fkfcu.org) pays 1.20% APY on 14-month CDs and 1.40% APY on 23-month CDs with a $500 minimum deposit. Credit union membership is open to all savers, but you must first join the American Consumer Council, which the credit union will do for you.

We removed three deals from our list this week.

HarborOne Bank in Massachusetts cut its special 7-month rate from 1.05% APY to 0.75% APY.

Libertad Bank in Texas cut its 18-month rate from 1.25% APY to 0.90% APY.

And Lincoln Park Savings Bank in New Jersey cut its 7-month rate from 1.10% APY to 0.50% APY.

You’ll find the top-paying deals clearly marked on our highest CD rates page, showing where they are available, with a quick link back to the original post, which includes more information on the institution and its requirements.

We’ll update this page weekly, so you’ll always know what great deals are out there from credit unions and local banks.

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