bank rates

Live Oak Bank Is Back With Another Nationally Available Add-On CD Deal

For the second time in less than a month, Live Oak Bank is offering a nationally available 5-year add-on CD paying 2.50% APY.

The first deal, which remained open for only a few days in February, called for a $25,000 minimum deposit. The current deal requires $75,000.

That’s too hefty to qualify for inclusion on our CD Rates Leaderboard, where the top five-year rate remains mired at 2.25% APY.

Like last month’s deal, though, this one requires a quick turnaround by savers. The offer ends at noon, Eastern Time, this Friday.

As was the case with the first offering, holders of the new CD are permitted to add additional funds to the account after opening and prior to maturity.

The minimum additional deposit is $1,000, but it’s unclear whether there’s a maximum amount that can be added.

Although the FAQs on Live Oak’s website state that there is an aggregate $250,000 balance limit per certificate of deposit, the Truth in Savings Act disclosure for last month’s CD showed no such limit.

I opened a 5-year CD in February and intend to open another one under the current offer.

The online application process was relatively straightforward but did require that ACH (Automated Clearing House) funding be initiated (although not necessarily completed) before the rate was locked in.

So have your money ready in your funding account.

Live Oak was founded in 2008 primarily to provide small business loans to underserved niche markets.

It has a single branch in Wilmington, North Carolina.

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Comments (15)
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15 Existing Comments
  1. mark C said:
    on March 11th at 02:43 am

    NOTE: I opened up the CD last go round and the back of the CD disclosure said NO MONEY MAY BE ADDED TO THE CD. I got into a hefty argument with management because two documents conflicted with one another. Read the disclosure carefully

  2. Charles Rechlin said:
    on March 12th at 10:52 am

    Mark C, in hindsight, I probably should have addressed the problem you mention. I was aware of it but decided not to raise it because I’ve run into this type of “battle of the preprinted forms” within the same institution before.

    You are absolutely correct about the language of the CD. Moreover, the “signature card” we signed has the same prohibition on additional deposits (at least mine did). On the other hand, the “Truth in Savings Disclosure for Time Deposits” document that was displayed during the online application process, and the one that came in the mail (mine actually came by email because the bank misaddressed the snail mail envelope), say, via a check-marked box, “You may make unlimited deposits into your account.” A separate box that reads “the maximum amount you can deposit is $___” is not checked, and the blank isn’t filled in. Also, another box that states “you make not make additional deposits into your account until maturity” is not checked.

    Careful savers like you are rightly sensitive about the add-on feature, particularly because of the fiasco that recently occurred at Valor CU, where Valor tried to retroactively slap on a fee making the add-on feature uneconomical Like you, I’ve spoken to Live Oak and have concluded that the documentation conflicts reflect lack of care on the bank’s part in preparing its documentation before launching these deals. Do you have a different view?

  3. James K said:
    on March 12th at 04:01 pm

    Charles, this bank was formed in 2008 and has minimal track record. With, in my view, a minor comment in the post on documentation is incorrect. There shouldn’t be any errors! Soooooooooo, bottom line for this bait and switch? Send a note to the bank that the terms and conditions in the agreement apply OR don’t use that bank!

  4. mark C said:
    on March 16th at 03:48 am

    Seeing these other comments makes me more angry as I was told by a Senior banker that NO ONE has brought this error to their attention, ever!
    I hate being lied to. I insisted, after waiting 45 minutes for someone to address my concerns, that I would receive a signed document by the bank that states that I CAN make deposits. They told me that this is how the forms are set up and that it cost them money to reprint it. That’s BS! You are supposed to be a professional operation. Spend $20.00 and reprint the documents! Very Unprofessional. I would keep an eye on this institution as one to fail in the future.

  5. Live Oak Bank said:
    on March 17th at 07:08 am

    On behalf of Live Oak Bank, we appreciate your interest in opening a Certificate of Deposit with us. We wanted to address your concerns.

    While the bank was founded in 2008, until recent months, our focus has been on providing small business loans to niche industries across the U.S. We were honest in saying that we did not see the CD documentation as a discrepancy but rather as a way to inform our customers of the ability to add to the CD account and also to notify the customer that a subsequent deposit did not extend the term of the original CD. Unfortunately, we are not able to modify the CD document that has the account number information on it, but we are able to notify you of the additional deposit feature, if you wish to take advantage of it, on the savings disclosure form. The CD document and the savings disclosure together make up the documentation for the account.

    Live Oak Banking Company is an FDIC-insured financial institution. We proudly post a 5-star rating from a credible third party on our deposits webpage. – . We are also consistently rated among the top 3 SBA lenders in the country.

    If you have any questions or concerns, please feel free to contact our Deposit Service Representatives. They can be reached via email (online or via phone at 866.518.0286 Monday through Friday from 9 AM – 5 PM EST.

    Thank you for your comments. We will apply them to provide better service to our customers.

  6. Charles Rechlin said:
    on March 17th at 10:15 am

    I want to thank Live Oak for addressing the concerns of readers.

    I have two suggestions going forward, however. Confusion could be avoided in the future if the bank:

    1. Replaced its current preprinted forms of CD and signature cards, prohibiting additional deposits, with abbreviated forms explicitly incorporating by reference the Truth in Savings disclosure for time deposits.

    2. Rewrote the FAQ language on its website implying that there is a $250,000 maximum limit on deposits into one CD account. It could simply state that FDIC insurance limits will be applicable to add-on deposits.

    This would make the task of opening a Live Oak CD, which I found an attractive investment option for me at this time, less arduous for both the bank and the customer.

  7. Live Oak Bank said:
    on March 17th at 10:37 am

    Hello, Charles.

    At Live Oak Bank, we allowed our customers to add money to their Certificate of Deposit(s) because we had the ability to offer this benefit. Due to all of the concerns and criticisms that we received, as of today, we are no longer offering this option. We will honor the terms for all customers who opened an account prior to Tuesday, March 17, 2015, but effective today, funds may not be added after the initial deposit is made.

    Thank you.

  8. James K said:
    on March 21st at 08:12 pm

    What can one say…”bank in training!” Cannot modify/reconcile forms to reflect the offering…so discontinue the offer…that is not an answer for a customer oriented organization.

    Perhaps the “normal” (post Great Recession) buyout in the future will help in requisite “redirection” of “limited” resources.

  9. mark C said:
    on March 22nd at 02:46 am

    Looks like Live Oak Bank is taking it’s Baseball, Bat and Bases and heading home. Not making the offer available any longer is CHILDISH!

    It equates to saying: “Ahh you caught our error, we were too cheap to print and correct the error on our pre-printed forms, so instead of keeping this offer out there and getting the proper documentation, we quit!”

    Unheard of! These guys will be out of business soon. Soon to be seized by the FDIC!

  10. Gerry B said:
    on March 22nd at 08:42 am

    Regrettably, I have to side with Live Oak Bank on this one. I think they simply did not anticipate the careful parsing their offer received. One commentator suggested that investors could replicate interest compounding by withdrawing interest monthly and reinvesting it in$1,000 chunks. This is clearly not what Live Oak had in mind when they specified that simple interest would be paid. Another commentator asked whether the add-on feature could be used beyond the limits of FDIC insurance. This raises the specter that, if interest rates were to drop substantially, and Live Oak were to be slow to wiggle out of it’s add-on commitment at that time, one investor could initiate a multi-million dollar add-on with the result of either getting a bonanza rate or forcing Live Oak into receivership. This, too, is clearly not what they bargained for. Live Oak, you need a better legal team if you are going to play in the majors. I had hoped to add on to my initial investment in a fashion consistent with Live Oak’s original intent. I regret being a casualty of this game, but I understand that Live Oak, in its naïveté, had no other option in this situation but to pull the feature and live with the fallout.

  11. Gerry B said:
    on March 22nd at 10:54 am

    Ok, now I’m joining the ranks of the angry. On this webpage:

    I just found the statement

    “No additional funds cannot be added to an existing CD.”

    This statement, attributed to Brandon Tilghman, is dated February 4. It is abundantly clear, and ample evidence exists in google cache, that this statement is the result of a recent change. I have asked for a clarification and that the webpage be updated to reflect the precise policy now in effect and precisely how it impacts accounts based on when those accounts were established. I have asked for a transparent explanation that does not suggest backdating. We will see what happens.

  12. Live Oak Bank said:
    on March 27th at 12:07 pm

    Most traditional financial institutions use a form type document when a Certificate of Deposit account is opened – some require the document to be returned when the account is closed and some utilize the document as a receipt notification for the deposit. As previously explained, our bank¹s Truth in Savings and disclosures enhance the standard terms laid out in our CD receipt document. The ability to add funds to an existing CD was a value-add that we offered our customers as a benefit. It is unfortunate for our customers that we have discontinued this offer.

    The frequently asked question on our website regarding the ability or inability to add additional funds to a CD was updated on March 18, 2015 at 11:43:30 AM EST to reflect the removal of this benefit. We are diligent in updating our website to ensure that our customers are receiving the latest and most accurate information regarding our deposit accounts.

    As the third largest SBA lender in the country and one of the few banks that has a 5-Star rating, I can assure you that we are a reputable bank. However, we highly encourage you to deposit your money with a financial institution that you trust. We will allow you to close your Certificate of Deposit account(s) without penalty until Friday, April 3, 2015 at 12 PM EST. Please contact a Deposit Services Representative to do so by calling 866.518.0286.

    Thank you.

  13. Gerry B said:
    on March 27th at 03:21 pm

    Live Oak,

    Is the above comment a reversal of the following three-day-old posting at the blog?

    Live Oak Bank (anonymous) | Mar 24, 2015 | Comment #135
    Yes, we are honoring the ability to add funds to any CD that was opened prior to March 17, 2015. Thank you.

    Are you in fact *not* honoring the ability to add funds to any CD that was opened prior to March 17, 2015?

  14. Live Oak Bank said:
    on March 29th at 11:04 am

    We are honoring the ability to add funds to any CD that was opened prior to March 17, 2015. Any customer who opens a Certificate of Deposit after that date will not have the ability to add additional funds.

    Hope this provides clarification. Thank you.

  15. Gerry B said:
    on March 29th at 04:25 pm

    Thank you, Live Oak. I appreciate the clarification.