bank rates

This CD Rates Deal Was No Mirage

Stack of dimesEvery now and then in my never-ending quest for good CD rates, I uncover a diamond in the rough at a community bank.

That happened recently at Luther Burbank Savings here in California.

My adventure offers a lesson to all savers: Sometimes you can find quality yields, even in today’s rate environment.

Last week, a jumbo CD of mine matured at Nationwide Bank.

The balance was up for grabs, and I went into all-out rate-chasing mode.

As in the past, Nationwide offered me a 0.05% loyalty bonus over its posted rates to renew the full amount.

That would have produced a 2.02% APY on a 5-year renewal.

But that was less than State Bank of India-New York’s 2.10% APY, then the leader for that maturity on our CD Rates Leaderboard (it’s now been dropped to 2.05%), and no greater than the 5-year rate available at Pentagon Federal Credit Union, where I’m already a member.

BBVA Compass was offering a 5-year, 2.25% APY CD. The yield reflected a 0.25% bump-up over the bank’s posted rate, available only to certain relationship customers.

However, for reasons I’ll explain in my next post, I passed.

Then, browsing the Internet, I stumbled upon a CD promotion by Luther Burbank, an institution I’d never heard of.

It was offering a 3-year, 2.00% APY CD.

That APY was 0.50% more than the highest 3-year rate shown on our Leaderboard (Salem Five Direct) and 0.49% more than PenFed’s posted 3-year rate.

Headquartered in Santa Rosa, Calif., Luther Burbank is a federal savings association operating eight branches in the state.

It has about $3.1 billion in deposits and carries a five-star Bankrate Safe & Sound rating.

The offer was available only at three branches – Pasadena, Toluca Lake and Los Altos – and could only be opened by California residents who appeared at the branch, bearing two forms of ID and willing and able to plunk down at least $1,000.

I lunged at this deal, racing through freeway traffic to Luther Burbank’s Pasadena branch to open a CD with my Nationwide money.

It looks like I got there just in time. Sadly, the offer has now expired.

Of course, the expenses of my 260-mile round-trip journey to Pasadena (plus the cost of boarding my three beagles overnight) will put a modest crimp in my effective yield.

But it was more than worth it.

In fact, I’d planned to make the trek again next week, when I have an Ally Bank CD maturing.

Now, I just have to chase CD rates somewhere else.

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