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Marcus by Goldman Sachs Review: GS Bank Takes on Online Savings, CDs, and Personal Loans

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Marcus by Goldman Sachs
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Most Americans probably think of fancy white-collar stock traders on Wall Street when they think of Goldman Sachs, a global investment firm that’s been around since the late 19th century.

In recent years, Goldman made a major pivot, launching a new arm of the company called GS Bank, which would provide internet-only savings accounts to the masses.

They also launched Marcus by Goldman Sachs®, a line of personal loans. Eventually, they decided to rebrand their savings account business, putting it under the Marcus umbrella as well.

Today, through Marcus, you’ll find three product offerings: personal loans, savings accounts, and CDs.

In this article, we’ll take a deep dive into all three products. We’ll tell you what you need to know before opening an account, including what rates they are offering.

All rates are current as of February 14, 2018.

Marcus by Goldman Sachs savings account

A very high interest rate and no fees make this one of the best savings accounts out there.

APY

Minimum Balance Amount

1.50%

None

  • Minimum opening deposit: None. However, you’ll need to deposit at least $1.00 if you want to earn any interest.
  • Monthly account maintenance fee: None.
  • Overdraft fee: None.

This is a great account for almost anyone. However, before you click that “Learn More” button below, there are a couple of things to know.

No ATMs. First, Marcus by Goldman Sachs doesn’t offer ATM access to your savings account. You’ll either need to deposit or withdraw money by sending in a physical check, setting up direct deposits, or by moving the money to and from your other bank accounts via ACH or wire transfer.

No checking account. Second, Marcus does't offer a corresponding checking account. That means you can only use this account as an external place to park your cash from your everyday money flow.

Keeping a separate savings account does have its benefits. For example, it’s harder to tempt yourself to withdraw the cash if you’re a chronic over-spender. But, it also means that there might be a delay of a few days if you need to transfer the money out of your Goldman Sachs online savings account and into your other checking account.

How to open a Goldman Sachs online savings account

It’s really easy to open an online savings account with Marcus by Goldman Sachs. You can do it online or over the phone as long as you’re 18 years or older, have a physical street address, and a Social Security Number or Individual Taxpayer Identification Number.

You’ll be required to sign a form which you can do online, or by mail if you’re opening the account over the phone.

on Goldman Sachs Bank USA’s secure website

Member FDIC

How their online savings account compares

Marcus’ online savings account can easily be described with one word: outstanding.

You’ll get a relatively high interest rate with this account, which is among the best online savings account rates you’ll find today. In fact, these rates are currently over seven times higher than the average savings account interest rate.

Even better, this account won’t charge you any fees for the privilege of keeping your money stashed there. It’s a tall order to find another bank that offers these high interest rates with terms this good.

Marcus by Goldman Sachs CD rates

Sky-high CD rates, but watch out for early withdrawal limitations.

Term

APY

Minimum Deposit Amount

6 months

0.60%

$500

9 months

0.70%

$500

12 months

2.05%

$500

18 months

2.10%

$500

24 months

2.15%

$500

3 years

2.25%

$500

4 years

2.30%

$500

5 years

2.60%

$500

6 years

2.65%

$500

  • Minimum amount to open account: $500
  • Minimum amount to earn APY: $500
  • Early withdrawal penalty: For CDs under 12 months, 90 days’ worth of interest. For CDs of 12 months to 5 years, 270 days’ worth of interest. For CDs of 5 years or over, 365 days’ worth of interest.

Marcus’ CDs work a little differently from other CDs. Rather than having to set up and fund your account all at once, Goldman Sachs will give you 30 days to fully fund your account.

Once open, your interest will be tallied up and credited to your CD account each month. You can withdraw the interest earned at any time without paying an early withdrawal penalty, but heads up: If you withdraw the interest, your returns will be lower than the stated APY when you opened your account.

If you need to withdraw the money from your CD, you can only do so by pulling out the entire CD balance and paying the required early withdrawal penalty. There is no option for partial withdrawals of your cash.

Finally, once your CD has fully matured, you’ll have a 10-day grace period to withdraw the money, add more funds, and/or switch to a different CD term. If you don’t do anything, Marcus will automatically roll over your CD into another one of the same type, but with the current interest rate of the day.

How to open a Goldman Sachs CD

Marcus has made it super simple to open up a CD. First, you’ll need to be at least 18 years old, and have either a Social Security Number or an Individual Taxpayer Identification Number.

You can open an account easily online, or call them up by phone. You’ll need to sign an account opening form, which you can do online or via a hard-copy mailed form. Then, simply fund your CD account within 30 days, and you’re all set.

Member FDIC

How their CDs compare

The interest rates that Marcus offers on their CDs are top-notch. In fact, a few of their CD terms are among the current contenders for the best CD rates.

If you’re interested in pursuing a CD ladder approach, Marcus is one of our top picks because each of their CD terms offer above-average rates. This means you can rest easy that you’ll get the best rates for your CD ladder without having to complicate things by spreading out all of your CDs among a handful of different banks.

The only downside to these CDs compared with many other banks is that you can’t withdraw a portion of your cash if you need it. It’s either all-in, or all-out. However, once out, you’re still free to open a new CD with the surplus cash, as long as it’s at least the $500 minimum deposit size.

Marcus by Goldman Sachs personal loan

Personal loans offered by Marcus have low APRs, flexible terms, and no fees.

Terms

APR

Credit Required

Fees

Max Loan Amount

36-72 months

6.99%-24.99%

Varies

None

$40,000

Marcus by Goldman Sachs personal loans can be used for just about anything, from consolidating debt to financing a large home improvement project. They offer some of the best rates available, with APRs as low as 6.99%, and you’ll not only be able to choose between a range of loan terms, but you can also choose the specific day of the month when you want to make your loan payments.

While there are no specific credit requirements to get a loan through Marcus, the company does try to target those that have “prime” credit, which is usually those with a FICO score higher than 660. Even with a less than excellent credit score, you may be able to qualify for a personal loan from Marcus, though, those that have recent, negative marks on their credit report, such as missed payments, will likely be rejected.

Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico) and have a valid U.S. bank account. You are also required to have a Social Security or Individual Tax I.D. Number.

No fees. Marcus charges no extra fees for their personal loans. There are no origination fees associated with getting a loan, but there are also no late fees associated with missing payments. Those missed payments simply accrue more interest and your loan will be extended.

Defer payments. Once you have made on-time payments for a full year, you will have the ability to defer a payment. This means that if an unexpected expense or lost job hurts your budget one month, you can push that payment back by a month without negatively impacting your credit report.

How to apply for a Marcus personal loan

Marcus by Goldman Sachs offers a process that is completely online, allowing you to apply, choose the loan you want, submit all of your documents, and get approved without having to leave home. Here are the steps that you will complete to get a personal loan from Marcus:

  1. Fill out the information that is required in the online application, including your basic personal and financial information, as well as how much you would like to borrow and what you will use the money for.
  2. After a soft pull on your credit, and if you qualify, you will be presented a list of different loan options that may include different rates and terms.
  3. Once you have chosen the loan you want, you will need to provide additional information to verify your identity. You may also be asked for information that can be used to verify your income and you will need to provide your bank account information so that the money can be distributed.
  4. You will receive your funds 1 – 4 business days after your loan has been approved.

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on Marcus By Goldman Sachs®’s secure website

How their personal loans compare

Marcus offers low APRs and flexible terms with their personal loans, but their main feature is that they have no fees. If you are looking for a straightforward lending experience with no hidden fees or costs, Marcus will be perfect for you since you won’t even have to worry about late fees if you happen to miss a payment.

While Marcus offers some great perks, you may be able to get a lower rate if you choose to go with another lender, such as LightStream or SoFi. Both of these lenders offer lower APR ranges and they don’t charge origination fees, though, LightStreamwill do a hard pull on your credit to preapprove you.

LendingClub and Peerform both have lower credit requirements than Marcus, but they also charge origination fees and, being P2P lending platforms, you will need to wait for your loan to be funded and you run the risk that other users might not fund your loan.

Overall review of Marcus by Goldman Sachs' products

Marcus has really hit it out of the park with their personal loans, online savings, and CD accounts. Each of these accounts offers some of the best features available on the market, while shrinking the fees down to a minuscule, or even nonexistent, amount. Their website is also slick and easy to use for online-savvy people.

The only thing we can find to complain about with Marcus is that they don’t offer an equally-awesome checking account to accompany their other deposit products. Indeed, it seems like Marcus has turned their former hoity-toity image around: Today, they’re a bank that we’d recommend to anyone, even blue-collar folks.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Reviews

PenFed Credit Union CD Rates, Checking, Savings, Money Market, and IRA Accounts

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

penfed credit union review
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PenFed Credit Union—also known as Pentagon Federal Credit Union—got its start in 1935. Since then, it has grown to become one of the largest credit unions in the country, with over 1.6 million members and $24 billion in assets. While it does offer in-person branches, anyone can also access their accounts online.

Like most credit unions, PenFed Credit Union restricts their membership. Luckily, most can get in with the right credentials or by making a small one-time donation to a good cause.

If you’re a government employee (including members of the military), work on a military base or for a qualifying organization, or a relative of someone who does meet these qualifications, you’re immediately eligible for membership.

For the rest of us, we can join simply by becoming a member of the Voices for America’s Troops or National Military Family Association for a one-time fee of $17.

In this review we’ll look at the rates and terms offered for each of their financial products. This will help you make an informed decision about whether PenFed is the right credit union for your banking needs.

All rates are current as of Feb. 6, 2018.

PenFed CD Rates

PenFed Money Market Certificates

High rates, great dividend payment, and renewal flexibility make this a great choice.

Term

APY

6 months

1.30%

12 months

1.87%

15 months

1.92%

18 months

1.97%

2 years

2.02%

3 years

2.07%

4 years

2.17%

5 years

2.43%

7 years

2.48%

  • Minimum amount to open an account: $1,000
  • Minimum amount to earn APY: $1,000
  • Early withdrawal penalty: For a six-month CD, you’ll forfeit any dividends earned (if you withdraw the amount before 90 days), or a full 90 days’ worth of dividends (if you withdraw it after 90 days, but before the CD matures). For a longer-term CD, you’ll forfeit all dividends earned (if you withdraw the amount within the first year), or 30% of what you would have earned if you kept the CD to maturity (if you withdraw the amount after one year, but before the CD matures).
  • One of the nice things about PenFed’s CDs is that they are very flexible in terms of how your dividends are paid out and what happens to the CD upon maturity.You can choose to have dividends reinvested into your CD or paid out each month by direct deposit into another PenFed Credit Union account, or mailed to you as a check. Of course, it’s always best to leave the dividends to pile up in your CD. If you choose to have dividends paid out, your APY may be lower than the stated rate.When you set up your CD, you’ll choose what happens at maturity. You can choose from three options: Renew the CD for the same term, deposit the funds into another PenFed account, or have a check mailed to you. There is no grace period for you to choose what happens after it matures as with most banks; rather, you choose upfront. However, you can change your mind at any time.The only down side of this CD is that you cannot make a partial withdrawal. If you need to withdraw the cash early, you can only remove the full amount. If you do need to withdraw the money, you can also only do so after giving written notice.

How to get a PenFed Money Market Certificate

To get a PenFed Money Market Certificate, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your CD with a minimum deposit of at least $1,000.

PenFed Credit Union will mail you a signature form to complete your account application, but you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

How PenFed’s CDs compare

PenFed offers very competitive rates on their CDs. Each of their CDs carry a higher-than-average interest rate. These high rates, combined with flexibility on how you earn dividend payments and how the CD is renewed, make this a great choice for people looking for a well-rounded CD option from a credit union.

Still, if earning the top rates are your priority, there are currently higher CD rates out there with certain banks.

PenFed’s Coverdell Education Savings Certificates

Lower minimum deposit requirements make this account more accessible for parents.

Term

APY

1 year

1.82%

2 year

1.97%

3 year

2.02%

4 year

2.12%

5 year

2.38%

7 year

2.43%

  • Minimum amount to open an account: $500
  • Minimum amount to earn APY: $500
  • Early withdrawal penalty: If you withdraw the CD before one year has passed, you’ll forfeit any dividends earned. If you withdraw the CD after one year has passed, you’ll pay a penalty equal to 30% of what you would have earned if you had kept the CD to maturity.

PenFed’s Coverdell Education Savings Certificates are a great tool to save for college. These CDs have a lower (i.e., more accessible) minimum account opening requirement than their regular Money Market CDs—just $500. You can contribute up to the maximum yearly amount set by the IRS—currently $2,000 for 2018—to this Coverdell account.

When you set up your account you can choose what happens when the CD matures: either renew the CD for a similar term, or deposit it into a new Coverdell Education Share account. Unlike PenFed’s regular CDs, you do have the option to make a partial withdrawal during the term of the CD if needed, provided that it doesn’t drop the amount in your CD below $500 (if that happens, the entire CD will be closed and deposited into a Coverdell Education Share account). If you do make a partial withdrawal, that amount will also be subject to the early withdrawal penalties described above.

How to get PenFed’s Coverdell Education Savings Certificates

To get a PenFed Coverdell Education Savings Certificate, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your Coverdell account with a minimum deposit of at least $500.

Once your application is complete, or if you’re already a member, you can open any new financial product directly in your online account. PenFed Credit Union will mail you a signature form. However, you can still open new accounts before completing this final check mark.

LEARN MORE 

NCUA Insured

PenFed checking account

Great interest rates, but make sure you can meet the requirements to waive the monthly fee.

APY

Account Balance

0.20%

Up to $19,999.99

0.50%

$20,000 - $50,000

  • Minimum amount to open an account: $25
  • Monthly account maintenance fee: $10
  • How to avoid the account maintenance fee: Keep $500 or more in your account, or have at least $500 direct deposited into your account each month
  • ATM fee: None for using either a PenFed ATM or a non-PenFed ATM; however, if using a non-PenFed ATM, the ATM’s owner may charge you a surcharge fee.
  • Overdraft fee: $30

Unfortunately, this checking account does charge a monthly fee, but if you have a job with a direct deposit paycheck or at least a little bit of cash, it’s not a hard fee to skirt around.

What we really like about this account is that it charges zero ATM fees, except for any surcharge fees an out-of-network ATM owner would charge (but that’s out of PenFed’s control). If you’re looking for a high-interest-earning checking account and use the ATM a lot to get cash, this would be a great checking account for you.

How to get PenFed’s checking account

To get a PenFed Checking Account, you’ll need to be a member. Simply complete the application, deposit a Share savings account with at least $5 and join either the Voices For America’s Troops or National Military Family Association for a one-time $17 fee (if you don’t qualify based on your employment).

Once your application is complete, or if you’re already a member, you can open any new financial product directly in your online account. They will mail you a signature form, however you can still open new accounts before completing this final check mark.

How PenFed’s checking account compares

We really love PenFed’s checking account for several reasons. It has a great interest rate, especially considering that many banks still don’t pay anything at all. PenFed Credit Union also does not charge any ATM fees with this account (although again, the other bank’s owner may charge you a surcharge fee), making this a cheaper option for folks who frequently use cash.

While this is a great checking account, it is possible to find better online checking accounts out there that offer higher interest rates, no monthly fees and ATM surcharge fee reimbursements.

PenFed Money Market Savings Account

PenFed offers very low rates for this account, even with a high balance amount—you can do much better elsewhere.

APY

Account Balance

0.05%

Up to $9,999.99

0.10%

$10,000 - $99,999.99

0.15%

Over $100,000

  • Minimum opening deposit: $25
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 for a withdrawal and $1.00 for a balance inquiry (including at in-network PenFed ATMs).
  • ATM fee refund: None
  • Overdraft fee: $30
  • Excessive transaction fee: $10 if you exceed 6 certain transactions per month.

PenFed’s money market account is designed to earn higher rates than their regular savings account, and that’s exactly what this account does — but only if you bring at least $10,000 of cash to the table to earn the second-tier or third-tier interest rates.

Although this account doesn’t have a monthly account maintenance fee, there are other fees to watch out for. You don’t typically use ATMs with a money market account as with a checking account, but if you do need to use an ATM, you’ll pay a $1.50 fee to make a withdrawal, even at an in-network PenFed ATM.

A better way to get your cash out of this account is with an account transfer (just don’t make over six in one month to avoid the excessive transaction fee), or with the free checks that they offer with this account.

How to get PenFed’s Money Market Savings Account

To get a PenFed Money Market savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your Money Market savings account with a minimum deposit of at least $25.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

How PenFed’s money market account compares

As far as interest rates go, PenFed’s money market account is very low. In fact, you can earn even higher interest rates by keeping your money in PenFed’s checking account, which is strange.

Furthermore, we find it odd that they charge you to make an ATM withdrawal from this account — even from their own ATMs. At least they offer free checks, but that won’t help you much if you need cold, hard cash pronto.

If you’re looking for better rates and terms on a money market account, you can find better money market accounts elsewhere.

PenFed Savings Account

An overall lackluster savings account that offers a low rate and charges for ATM withdrawals.

APY

Minimum Balance Amount

0.05%

$5

  • Minimum opening deposit: $5
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 for a withdrawal and $1.00 for a balance inquiry (including at in-network PenFed ATMs).
  • ATM fee refund: None.
  • Overdraft fee: $30
  • Excessive transaction fee: $10 if you exceed six certain transactions per month.

This is the basic account that you need to become a PenFed member and open any other account. It’s designed as a free savings account and does pay a small amount of interest, but don’t expect much more from it than that.

Furthermore, if you ever need to take out cash from this account, you’ll pay a $1.50 per ATM withdrawal, even if you use a PenFed ATM. And unlike with their money market checking account, you don’t get free checks with this account. That means the only way you can make a free transaction into or out of this account is either online or by visiting a branch in-person.

How to Get PenFed’s Savings Account

To get a PenFed savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your savings account with a minimum deposit of at least $5.

The credit union will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

How PenFed’s Savings Account compares

We’ll be honest here. The interest rate on PenFed’s savings account is awfully low compared with its competitors. You likely won’t earn much with this account, especially compared with other online high-interest savings accounts.

Furthermore, we don’t like the fact that you need to pay to use an ATM with this account, even for in-network PenFed ATMs. Most banks at least let you use their own in-network ATMs for free, so the fact that you need to pay to do so with this account seems silly.

However, even though all members are required to open this account when establishing their membership with PenFed, it doesn’t mean you have to use it. It’s perfectly fine to let it sit idle with the $5 minimum deposit since there are no monthly account maintenance fees. We instead view this account as a pesky requirement for working with the credit union if you’d like to use one of their other financial products.

PenFed IRA CD accounts

No fees on partial withdrawals for those ages 59 ½ and over make this a great account choice for mature consumers.

Term

APY

1 year

1.82%

2 years

1.97%

3 years

2.02%

4 years

2.12%

5 years

2.38%

7 years

2.43%

  • Minimum amount to open an account:$1,000
  • Minimum amount to earn APY:$1,000
  • Early withdrawal penalty: If you withdraw the money in the first year, you’ll forfeit all dividends earned. If you withdraw the money after one year but before the CD matures, you’ll pay 30% of what you would have earned if you kept the CD to maturity.

At first glance, PenFed’s IRA CDs look pretty run-of-the-mill. The minimum opening deposit is fairly high, especially if you’re a young saver just looking to start out. In fact, IRA CDs are fairly conservative investments anyway, and the people who can get the most benefits from them are mature folks nearing — or already at — retirement.

But what makes these IRA CDs really stand out as better options for more mature savers is that you can make partial early withdrawals from your CD completely penalty-free, assuming that you’re 59 ½ and over. If you need to take out the cash in retirement early, rest assured it won’t cost you anything to withdraw, as long as you leave at least $1,000 in the CD for it to stay open.

How to get a PenFed IRA CD

To get a PenFed IRA CD, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA CD with a minimum deposit of at least $1,000.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

How PenFed’s IRA CDs compare

While PenFed doesn’t exactly offer the highest interest rates on their IRA CDs, they’re pretty darn close. If you’re looking to get as high in returns as possible it’s tough to go wrong with them, but you may be able to earn more with other IRA CDs.

The thing that stands out the most with PenFed’s IRA CDs is that people who are over age 59 ½ can make partial withdrawals from these CDs without paying any early withdrawal penalties (assuming they keep at least a $1,000 balance in the CD to keep it open). This is a really unique feature, and it’s why we would recommend PenFed’s IRA CDs to older adults looking to keep their options flexible.

PenFed IRA Savings account

Low interest rates make this an OK place to store your retirement funds, but not to grow them.

APY

Minimum Balance Amount

0.05%

$25

  • Minimum opening deposit: $25
  • Monthly account maintenance fee: None

Remember how everyone is required to open up a PenFed savings account and fund it with at least $5 if they want to become a member? This account is the IRA version of that. Specifically, if you want to open up an IRA product — such as one of PenFed’s IRA CDs — you’ll need to open up one of these accounts as well.

This will be the default account that your IRA CD money is deposited into if you elect not to have the IRA CD auto-renew when it matures. It’s a great place to store your money in the short term until you withdraw it for retirement or move it to another IRA investment, however, it’s not a great place to grow your money due to the lackluster interest rate.

How to get PenFed’s IRA Savings account

To get a PenFed IRA savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA savings account with a minimum deposit of at least $25.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

PenFed IRA Premier Account

The exact same account as PenFed’s regular IRA Savings account, just with a higher minimum balance requirement.

APY

Minimum Balance Amount

0.05%

$10,000

  • Minimum opening deposit: $10,000
  • Monthly account maintenance fee: None

If you have at least $10,000 to keep in your retirement savings account, you can choose to open PenFed’s Premier IRA Savings account. There is no real benefit of using this account over PenFed’s regular IRA Savings account, because the exact interest rates are currently being offered for both accounts.

Typically, the more money you bring to the table, the higher the interest rate you can earn (as with PenFed’s Money Market Savings account), however that is not the case with this account. That could change in the future, however, if the credit union does decide to increase their interest rates for this account. But right now, we can’t really see any reason why you’d specifically choose this account over their regular IRA Savings account.

How to get PenFed’s IRA Premier account

To get a PenFed IRA Premier account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA Premier account with a minimum deposit of at least $10,000.

The credit union will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE 

NCUA Insured

Overall review of PenFed’s banking products

When it comes to bank accounts, PenFed really shines in some areas and offers somewhat lackluster products in others. Specifically, we really like the high rates offered on their checking accounts and CD products, which are currently running near the top of the pack. The added advantage for people who are over age 59 ½ to withdraw money from the IRA CDs without paying a penalty as long as they keep at least $1,000 in the CD is also a great option.

However, other products — such as their savings and money market accounts — fall a bit short. We find it odd that they charge ATM fees for some of their accounts, even if you use a bona fide PenFed network ATM. Furthermore, each of PenFed’s savings accounts offers such low rates that we can’t really recommend them as a place to grow your money.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Auto Loan

How to Buy a Car Online — from Start to Finish

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Walking onto a car dealership lot can sometimes feel like an experience straight out of a horror movie. Before you’ve even made it a few feet, car salesmen descend upon you like vultures, urging you to make spur-of-the-moment decisions that can bury you in debt up to your eyeballs for the next half-decade.

There has to be a better way. According to a 2015 survey by the research firm Accenture, 53% of people “would consider buying a car online.” And, according to the firm, 16% of people already have.

Buying a car online can be a much smoother experience and lead to better, more well-informed outcomes. But, it does require a bit more legwork on your part (at least digitally). In this guide, we’ll walk you through how the online car buying experience compares with the traditional route and the exact steps you need to know to buy a car online. Finally, we’ll show you what to watch out for to stay safe.

Following the steps in this guide can help ensure that you don’t get taken for a ride when buying your next car online.

Traditional vs. online car buying

Before the internet revolutionized everything, there really was only one way most people bought a car. They’d visit car lots, find a car they liked, and then sit down with a car salesman to work out an agreement. This lead to the dreaded negotiation process.

“There's all this back-and-forth and, 'Oh, I've got to go talk to my manager,’” said Jack Gillis, director of public affairs at the Consumer Federation of America and author of “The Car Book.” “Well, the guy goes back and has a cup of coffee and lets you sit there and steam for a while, then he comes back and gives you some song and dance about why they can or can't do something.”

Because most people treated car dealerships as a one-stop shop for buying a car, they often wouldn’t be informed about the full range of available cars, financing options or trade-in options available to them. Without these bargaining chips, consumers are at the mercy of the car salesmen.

“It's like a lamb being led to slaughter,” said Gillis.

What if someone could wave a magic wand and take away all those painful points? With online car buying, it’s possible to complete nearly every phase of the car-buying experience — from finding the right car to negotiation — entirely online.

In this guide, we’ll talk about the pros and cons of buying a car online and how it compares to traditional car buying.

While removing the painful points of dealing with hawkish car salesmen is certainly nice (especially for introverted folks who have a fear of negotiating), perhaps the biggest benefit of buying a car online is that it puts you in control of the car-buying process.

You’re no longer at the mercy of the salesmen at one dealership. You can expand your options for cars, financing and trade-ins, and use these as bargaining chips to negotiate for the best price possible.

“The whole digital part really is empowering for the buyer because there's so much information that you can use to make an informed decision,” said Matt DeLorenzo, managing editor of KelleyBlueBook.com.

The downside of all this power is that it requires a bit more digital legwork on your part to bring all the pieces together. But, as we’ll see, it’s not rocket science. Doing your homework can literally save you thousands of dollars and ensure you get the best car possible.

Follow these seven steps to buy cars online

Step 1. Choose the right car

It’s important to choose a type of car that will fit your needs best. Do you want a very fuel-efficient vehicle for short commutes? How about hauling large amounts of cargo around? Do you have a large family, or a small one? Questions like these can help you zero in on what kind of body style (truck? SUV? compact car?) will suit your needs best.

Once you narrow down a body style, it’s time to research what specific makes and models of cars might be best for you. Consumer Reports offers comprehensive reviews of cars by make, model and year, however, it does charge a small monthly or annual fee. Other good websites to do research on specific types of cars include Edmunds, Car and Driver and Kelley Blue Book.

If you’re buying a new car, you might be offered certain options and add-ons from the dealer, such as VIN window etching or rust-proofing. Before you go signing up for every option offered (and sign away your whole paycheck in the process), it’s important to research these options.

According to a 2017 report from the National Consumer Law Center, the average markup on these add-ons is 170%. If you really do need these optional add-ons (and you probably don’t), perhaps it’s better to get it done yourself.

Step 2. Determine the price you want to pay

Next up is determining how much car you can actually afford. A good rule of thumb is the 20/4/10 rule:

  • 20: Make a minimum 20% down payment.
  • 4: Finance for no more than four years.
  • 10: Monthly transportation expenses shouldn’t exceed 10% of your monthly income (including insurance, gas, car payments, etc,)

This rule of thumb will help you set a cap on your car-shopping budget. For example, if you have $3,000 saved, it might be a good idea to avoid buying a car for more than $15,000 ($15,000 * 0.20 down= $3,000). From there, you can assess any financing offers to make sure that you’re not spending more than 10% of your income on the car, and that your financing doesn’t stretch out past the four-year mark.

You can narrow your car search down even further using these budget caps. If you know that the MSRP of a particular new car is far outside of your budget, you can weed it out of consideration. You can use websites like Kelley Blue Book or the National Automobile Dealers Association to research the current prices for new and used cars in your area.

Step 3. Get approved for financing online

Traditionally, you’d walk into a dealership and tell the car salesman your monthly budget. Then, the car salesman would work out the final purchase price and the financing to give you one, final monthly payment number.

According to Gillis, this is one of the surest ways to pay more in the long run.

“The dealer will ask, 'Listen, what if I can get you out the door for $325 a month?’ [but] you have no idea what you're really paying for financing,” he said. “You may be getting into a financial arrangement that is more expensive than if you had shopped around.”

That’s why it’s especially important to get preapproved for an auto loan before you actually go shopping. Getting preapproved for a loan does not mean you have to take the financing; rather, it helps you stay within your budget and gives you a bargaining chip in negotiations.

You can easily get preapproved for an auto loan online through websites like LendingTree, which is the parent company of MagnifyMoney. Using our auto loan marketplace, you can fill out one short online form and potentially get offers from several auto lenders at once. It’s also a good idea to check around with local banks and credit unions, which may offer deals to you locally.

You’ll generally need a high credit score to qualify for the best auto financing offers that banks love to advertise. If you don’t have a high credit score, you will still often be preapproved for the loan, however, it may come with higher interest rates. If you’re outright denied for a preapproved loan, you may need to consider shopping elsewhere or waiting a little while so you can take steps to increase your credit score.

If you are qualified for pre-approval, the lender will give you a pre-approval letter. Make sure to keep a copy of this letter, and bring it with you to the table when it comes time to negotiate a price on the car you’ve chosen.

Step 4. Choose the right source

It’s now time to cast your net and see what cars are out there.

AutoTempest is a comprehensive website that proclaims to be the Kayak.com of cars: it searches several websites for specific makes and models, including on Craigslist. If you’re looking for one particular brand, don’t overlook your local dealership’s website. Other possible websites to scope out cars include:

Luckily, with the power of the internet, the whole world (or at least the whole country) can be your virtual car lot. If you’re able to travel to pick up your new vehicle, you might be able to save a trunkful of cash by broadening your search.

For example, if you live in a snowy climate and are looking for an all-wheel drive car, you might try looking in a warmer area. “There might be better incentives on all-wheel drive cars in, say, Arizona than in the Northeast where they got a lot of snow,” said DeLorenzo.

Step 5. Get quotes

Once you’ve identified your targets, the next step is to find out how much they’ll cost. You’ll negotiate the price lower in the next step, but this just sets a starting point.

Oftentimes, dealerships or third-party sellers won’t show you the price of a vehicle online as the price may have changed or the vehicle may have already been sold. That’s why it’s important to contact the dealership directly and ask for a quote for each vehicle you’re interested in.

Email or call the dealership and ask for their internet sales manager: this is the person you’ll be working with through the negotiation process. Give them the VIN or the stock number of the vehicle you’re interested in and ask for a quote. Then, ask them to email it to you so you have it in writing.

It can sometimes be difficult to get a dealership to quote a price. Dealerships may say, “'Oh, I see you're shopping online, boy that's great. Here's what I want you to do. I want you to go and talk to all the other dealers, and then come back to me, and I'll see what I can do for you.'” said Gillis. “Your response to that is, 'No, I'm not gonna do that. I want you to give me the very best price you can give me for this make, model, year, and I want you to commit to that.'”

If quote collecting isn’t your thing, you can also hire a service such as CarBargains. For $250 and a detailed description of what you’re looking for, CarBargains staff will collect at least five different dealership quotes for you. According to Gillis, “statistically, about a third of the results actually come in at below so-called manufacturer’s price or inventory price.”

Collecting these quotes gives you the bargaining power you need to negotiate prices as low as possible in the next step.

Step 6. Time to negotiate

Ah, the dreaded negotiation. Since you’ve already gone through all the steps to be an informed consumer, it will be a much smoother process. Specifically, you’ll be negotiating the price of three separate items:

Vehicle price; financing cost; and trade-in value.

Vehicle price

This is the most important piece. You can — and should — play the offers you’ve received in the prior step off of each other. Did someone offer $12,500? Show that emailed quote to another dealer and ask if they can lower their price to $12,000.

Car dealerships are usually very easy to negotiate with online.

“If you think about it from an efficiency point of view, an online salesperson can be working more deals at one time than somebody on the floor who's physically with one person,” said DeLorenzo. “Sometimes it's actually more cost-effective for the dealer to sell it through or do a lot of the negotiation online.”

Car salesmen will often try and upsell you on add-ons when negotiating the price for a car. “They may say, ‘Well this will only cost you 10 bucks more a month.’ Well, yeah, and that's $120 over a year. Over five years that's $600, $700. You can't let bells and whistles cloud your judgment,” said DeLorenzo. Stick to the basic numbers and don’t get distracted.

Trade-in price

Chances are that you already have a car you’re looking to trade in and help defray the cost a bit. Most dealerships will accept trade-ins, but be warned: you will probably get much, much less than if you shop around for trade-in prices on your own.

Tools such as Kelley Blue Book also allow you to find out a fair trade-in price for your vehicle. In addition, you can use a tool on their website called “Instant Cash Offer” to get bids from dealers on your car.

“The beauty of having something like that is that it sets a floor for what your car is worth,” said DeLorenzo. “You'll know you'll get at least that much in trade or in an outright purchase, and that's important leverage to have when you're negotiating a new car deal.”

Additionally, you can try selling your car yourself through websites like Craigslist. Generally, going this route will net you the best price for your old car, although this may take much more time and energy than simply driving onto a car lot with your old car and driving off with a new one.

Financing cost

The final piece of the puzzle is how you’re going to pay for your new car. Since you’ve already taken the time to be preapproved for an auto loan, this step is simple. Show the dealer your pre-approval letter and ask them if they can beat it.

If so, great. If not, then you know you’ve already secured the best auto financing deal possible.

Step 7. Making the final purchase online

Once you’ve lined up the three pieces of the puzzle — the lowest car price, the lowest financing price and the highest trade-in value — it’s time to make your decision.

Most dealerships still require you to physically come in to complete the final paperwork signing. However, that’s beginning to change.

“Savvy dealers are beginning to digitize as much of that kind of paperwork [as possible], to just make it easier to buy a car from them,” said DeLorenzo.

“It works out better for them, too. I mean, if they're able to get you in and out quicker, they can sell more cars quicker. People have a much more positive view of how the deal went and it's just good business.”

But as far as completing the entire purchase process online? DeLorenzo said, “I think there are dealers who are willing to do that. The question is, do you want to do that?”

But for now, we still can’t entirely get around some of the physical in-person aspects of buying a car. Perhaps someone will invent a virtual test-drive machine in the future.

Staying safe while shopping for cars online

Luckily, outright scams aren’t too common when it comes to buying cars online, according to Gillis. Many car dealers are subject to consumer-friendly regulation by the Federal Trade Commission.

Beware the bait-and-switch

One situation that Gillis has seen, however, involves a bait-and-switch technique after consumers arrive at the dealership to complete the purchase after negotiating everything online.

Here’s how he describes this common ploy: “You've got it all squared away. You get to the dealership to close the deal, and all of a sudden, 'Oh my gosh. I can't believe it, someone just came in and bought that car, but we have another one here that actually has a few better features on it, and it's just the color you wanted, and it's only gonna cost you $20 more per month.’”

If this happens to you, be prepared to walk away from the dealership — they’re just trying to weasel more money out of you.

While stories like that may be uncommon, there are a couple of things you can do to make sure that you don’t end up regretting your decision.

Get an inspection from an independent mechanic

If you’re buying a used car, whether at a dealer or from someone you found on Craigslist, you should absolutely get an inspection first. Everyone has heard horror stories about buying a lemon (or worse, been the person who bought the faulty car). The seller will surely tell you that the car is in perfect shape, but how do you really know? Getting an auto inspection by an independent mechanic is perhaps one of the best ways to protect yourself.

If you’re unable to take the car to your own mechanic, DeLorenzo recommends a great service from AiM Certify. For as little as $129, you can book an independent mechanic anywhere in the country to travel to the dealership and perform an inspection for you. You’ll get back a full mechanical report complete with actual photos of the car (not gorgeous stock images that seem to plague dealership websites).

Try before you buy

“Most of the problems that consumers end up not liking about their vehicles could have determined in a test drive,” said Gillis. “For example, it's hard to park, or the back seat really isn't that comfortable, or the trunk really doesn't hold that much, or ‘when I'm changing lanes, there's a big blind spot in the back.’ So that's why that test drive is really, really important.”

If you’re not happy with your choice, you may have wasted tens of thousands of dollars. “It's not like buying a pair of shoes from Amazon,” said DeLorenzo. “It gets a little bit more involved if the car doesn't fit you and you try to send that back.”

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Best of, Earning Interest

The Best Credit Union CD Rates – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

The top credit union CD rates
Source: iStock

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?

On average, yes. As of December 2017, the average one-year credit union CD had a 0.68% annual percentage yield (APY), compared to the 0.54% APY average among one-year bank CDs.

Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of Feb. 5, 2018. We then eliminated any credit union with a health rating lower than a B and identified the top three offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

Unify Financial Credit Union - 1-Year Share Certificate, 1.00% APY, min. deposit $1,000

UNIFY Financial Credit Union
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.00%, compared to the national average of 0.68% in December. You would earn $8.50 on a $1,000 deposit. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.

NASA Federal Credit Union - 1-Year Share Certificate, 0.65% APY, min. deposit $1,000

NASA Federal Credit Union
If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

Connexus Credit Union - 12 Month Certificate, 2.01% APY, min. deposit $5,000

With a $5 donation to the Connexus Association, anyone can join Connexus Credit Union. The Connexus Association assists educational institutions by providing scholarships and financial information. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $5,000 deposit.

If you’re able to deposit $5,000 into Connexus’s 12 month CD, you’ll earn $100.50 by the end of the term. However, if you withdraw funds early, you’ll be penalized with 90 days’ worth of interest.

Latino Credit Union - 12 Month CD, 2.00% APY, min. deposit $500

To become a member of Latino Credit Union, anyone can simply donate $10 to the Latino Community Development Center. Once you become a member of this credit union, you’ll be able to take advantage of their 2.00% APY by depositing $500. Early withdrawal penalties are worth 90 days of interest on their 12 month CD.

USAlliance Financial – 12 Month CD, 1.87% APY, min. deposit $500

USALLIANCE Financial
Membership to USAlliance Financial is open to anyone who lives, works or worships in certain counties of Massachusetts, the city of West Haven, Conn., and a few districts in New York. However, if you don’t qualify by location, you can qualify by giving USAlliance authorization to make you a member of various organizations, including the American Consumer Council, if you aren’t already a member of these organizations. Keep in mind that these organizations may request fees.

Once you’re a member of USAlliance Financial, you can open a 12-month CD with a minimum of $500. Their early withdrawal penalty equals 180 days’ worth of interest earned on the amount you withdraw.

PenFed Credit Union – 1-Year Money Market Certificate, 1.87% APY, min. deposit $1,000

PenFed Credit Union
PenFed tops this list with an APY of 1.87%. With a minimum deposit of $1,000, you could earn $18.70 in one year. Interest is compounded daily and posts to accounts monthly. However, be aware of the steep early withdrawal penalty. If you withdraw funds before the year is up, you may forfeit all interest accrued up to that point.

Eligibility for this credit union is mainly based on military status, governmental employment status, affiliation with certain associations and organizations or relation to eligible members. However, if you don’t qualify through those criteria, getting a membership to this credit union is not difficult if you’re willing to pay a one-time fee of $17 to either Voices for America’s Troops or the National Military Family Association.

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NCUA Insured

Alliant Credit Union – 12-17 Month Share CD, 1.75% APY, min. deposit $1,000

Alliant Credit Union
With a minimum deposit of $1,000, you could earn an APY 1.75% on a 12-17 month CD. If you deposit $25,000 or more, you may be able to earn an APY of 1.80% with the same term. An early withdrawal penalty of 90 days’ worth of interest may be imposed if you withdraw funds prior to the CD’s maturity date.

With a $10 donation to Foster Care to Success, you can easily become a member of Alliant Credit Union. You can also become a member if you are an employee or retiree of certain organizations, related to existing Alliant members, or live or work in qualifying communities.

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2017 mobile banking app analysis.

Wright-Patt Credit Union - 1-Year Certificate, 2.00% APY, min. deposit $500

Wright-Patt Credit Union
Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

You can earn $10.00 on a 12-month CD with just a relatively small $500 deposit. Early withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

Redstone Federal Credit Union – 12 Month MemberPlus Regular Share Certificate, 1.61% APY, min. deposit $1,000

Redstone Federal Credit Union
Similar to Wright-Patt CU, you can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.

However, if you do qualify for membership, you could earn an APY of 1.61% with a minimum deposit of $1,000. This could earn you an additional $16.10 at the end of the 12 month term. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.

Eastman Credit Union - 1-Year Investment Certificate, 1.40% APY, min. deposit $1,000

Eastman Credit Union
Eastman Credit Union also has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.

Eastman CU is another one of the rare credit unions that allow you to withdraw your dividends penalty-free before the maturity date, although again, doing so will lower your total returns. Currently, you can earn an interest rate of 1.40% on a 12-month CD. With a minimum deposit of $1,000, that translates into earnings of $14.00 after one year. If you withdraw your money before the CD matures, you’ll owe a penalty fee of anywhere between seven days’ worth of dividend earnings or all of your dividend earnings.

Delta Community Credit Union – 1-Year Certificate, 1.00% APY, min. deposit $1,000

Delta Community Credit Union
There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 0.75% to 1.00%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs), as of December 2017. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it's pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Best of, Earning Interest

The Top IRA CD Rates – February 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Top IRA CD rates
Source: iStock

Perhaps you’ve decided to build a CD ladder within your IRA, or maybe you’re looking for a safe way to store your retirement cash for a specific period of time. Whatever the reason, you’re interested in getting an IRA CD and, understandably, want to know what products will give you the best rate of return.

You can get an IRA CD with terms ranging from three months to more than six years, with interest rates generally increasing with the term length. There are lots of options, so we’ve rounded up the top IRA CD rates that are available right now for a variety of terms. You’ll select your IRA CD terms based on your CD-ladder master plan or whenever you’ll need access to your money.

Every month, we choose the top IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. On Feb. 5, 2018, we sorted the products by APY, then eliminated institutions with a health rating below a B. We then eliminated products that are not available nationwide. From there, we chose the IRA CD with the highest APY among products with a minimum deposit no greater than $5,000. Here are the best options. (Average CD rates referenced below are based on DepositAccounts.com data as of Feb. 5, 2018.)

The top IRA rates in February 2018

3 Month IRA CD – Bethpage Federal Credit Union, 3 Month IRA (Traditional, Roth)

Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. Bethpage offers the best rate of 1.25% APY and a minimum deposit of $50. That rate is well above the national average.

6-Month IRA CD - Ally Bank, IRA High Yield 6-Month CD

Online Savings Account from Ally Bank

Six-month IRA CDs typically earn a little bit better, but they’re still not great. Ally Bank offers the highest interest rate at 1.60% APY for deposits between $5,000 and $25,000. That translates into an earning of $39.84 on a $5,000 deposit. If you deposit less than $5,000, you can still earn a decent APY of 1.50%. If you deposit $25,000 or more, you'll earn a 1.75% APY. Compare that to the average of all regular 6 month CDs, at 0.44%.

1-Year IRA CD Rates – First Internet Bank of IN, 12 Month IRA (Traditional, Roth)

Regular one-year CDs earn an average interest rate of 0.70% APY. First Internet Bank of IN, however, is offering a one-year IRA CD at 2.07% APY. You’ll need a $1,000 minimum deposit to earn $20.20 in interest once the CD matures.

18-Month IRA CD Rates – First Internet Bank of IN, 18 Month IRA (Traditional, Roth)

18-month regular CDs earn an average interest rate of 0.86% APY. First Internet Bank of IN, on the other hand, is currently offering 2.12% APY on a 18-month IRA CD. This would translate into an earning of $31.21 with a minimum $1,000 deposit.

2-Year IRA CD Rates – MutualOne Bank, 24 Month IRA Certificate (Traditional, Roth)

Two-year regular CDs earn an average interest rate of 0.96% APY. MutualOne Bank, on the other hand, is currently offering 2.32% APY on a 2-year IRA CD. This would translate into an earning of $23.47 with a minimum $500 deposit.

3-Year IRA CD Rates – EverBank, 3-Year Yield Pledge IRA (Traditional, Roth)

EverBank -  3-Year IRA CD Rates Three-year regular CDs are earning an average interest rate of 1.13% APY currently. EverBank is nearly doubling that, with an interest rate of 2.30% APY with their 3-Year Yield Pledge IRA CD. With those interest rates and a $5,000 minimum deposit, you would earn $357 when the certificate matures.

4-Year IRA CD Rates – First Internet Bank of IN, 48 Month IRA (Traditional, Roth)

Four-year regular CDs are currently earning an average interest rate of 1.36% APY. First Internet Bank of IN again claims the top interest rate for these IRA CDs, with an interest rate of 2.48% APY. You would earn $98.65 on this CD with a $1,000 minimum deposit.

5-Year IRA CD Rates – Connexus Credit Union – 60 Month IRA (Traditional, Roth)

Five-year IRA CDs hold the top spot for interest rates out of any category on our list. National averages for a regular 5-year CD is 1.63% APY, however Connexus Credit Union outperforms the average with a 3.00% APY on its 5-year IRA CD for members. The minimum deposit is $5,000 to earn this APY.

6+ Year IRA CD Rates – Air Force Federal Credit Union, 7 Year IRA

Air Force FCU-6 Year IRA CD Rates Interestingly, these very-long-term IRA CDs don’t offer higher interest rates than the shorter-term five-year IRA CDs. Air Force Federal Credit Union offers the highest term for their seven-year IRA CD, at 2.50% APY. That’s still a lot less than Connexus Credit Union which offered a 3.00% APY for a five-year IRA CD. Still, with Air Force Federal Credit Union’s seven-year IRA CD, you would earn $471.71 on a minimum deposit of $2,500 when the IRA CD matures.

3 questions to consider before opening an IRA CD

Opening an IRA CD generally requires filling out a form or talking to a banker. You’ll have to have a way to fund your IRA CD, whether that’s rolling over an existing retirement account into an IRA CD or depositing cash into the product. The same limits that apply to IRA contributions apply to IRA CDs: $5,500 per year ($6,500 if you’re over age 50) of your own money across all your IRA accounts each year, and you can do a rollover once per year.

Unless you’ve invested in a bump-up IRA CD, you won’t be able to take advantage of a higher rate until your CD matures. Withdrawing funds from an IRA CD before they mature will result in a stiff penalty. Bump-up IRA CDs give you a chance to increase your interest rate to a higher level if it’s available, but you’re generally only allowed to do this once or twice during the life of the CD.

You can either use the the direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account filling out a form authorizing the bank or credit union to transfer money from the old account into the new account. The indirect transfer method involves you asking for a check from your old IRA account. You have up to 60 days to deposit that check into your IRA CD to avoid incurring a penalty.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
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Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Earning Interest

The Best High Yield Checking Accounts in 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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The money you keep in your checking account has a lot of valuable potential that can help you reach your financial goals. Sadly, this potential isn’t often realized because most checking accounts offer little to no interest, especially compared to savings and CD accounts. These high yield checking accounts are bucking that trend with sky-high rates that can put even the best savings accounts to shame. But, before you sling all of your cash into one of these accounts, there’s a few things you need to know.

Typically, these accounts come with a lot more strings attached than a regular checking account (you didn’t think they’d be offering all of this for free, did you?). In this article, we’ll help you make an informed decision about whether one of these high yield checking accounts are right for you and your financial goals.

How we picked the best high yield checking accounts

We followed a strict approach when selecting these accounts. We used the online rate finder for FDIC- or NCUA-insured rewards checking accounts on DepositAccounts.com, another LendingTree.com-owned site, to list the top 10 checking accounts with the highest rates. These rates were pulled on 2/5/18. We assumed a deposit amount of $100.

Credit unions were only included if they allow membership to anyone (such as by making a donation to their chosen charity). Finally, we filtered out any checking accounts that are not available nationwide, or that carry a health rating of below a B.

The best high yield checking accounts in 2018

America’s Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
    1. Have $15,000 in loans or deposits with ACU
    2. Have a $500 direct deposit
    3. Be signed up for eStatements
    4. Complete 10 debit transactions in person in store
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first 10 non-America’s Credit Union ATM withdrawals are free. After that, you’ll pay $1.00 per withdrawal at a non-America’s Credit Union ATM.
  • ATM refunds: None

First Financial Credit Union (Illinois)

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following two things each month:
    1. Be enrolled in eStatements
    2. Complete 15 signature-based debit card purchases
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first eight out-of-network withdrawals per month are free. Balance inquiries and cash withdrawals after your eighth withdrawal of the month are $1.00 each.
  • ATM refunds: $10 per month.

La Capitol Federal Credit Union

  • Minimum amount to open: $50
  • Requirements to earn the high APY: Make at least 25 debit purchases per month.
  • Monthly service fee and how to waive it: $2; waived if you enroll in eStatements.
  • ATM fees: None
  • ATM refunds: Up to $25 in out-of-network surcharges (the money the ATM’s owner charges you) per month if you are signed up for eStatements and make 25 debit purchases per month.

Blue Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must have completed the following three things each month:
    1. Make at least 10 debit transactions
    2. Be enrolled in eStatements
    3. Have at least one direct deposit, ACH deposit or withdrawal, or bill payment per month from your account
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: $1.50 for out-of-network ATMs.
  • ATM refunds: $3 per transaction, up to $21 per month as long as you’ve met the requirements to earn the high APY. Otherwise, no ATM fee refunds will be given.

One American Bank

  • Minimum amount to open: $50
  • Requirements to earn the high APY: You’ll need to do the following three things for each qualification cycle (be aware: their qualification cycles are not the same thing as a calendar month):
    1. Complete at least 12 debit purchases of $5.00 or more
    2. Be enrolled in eStatements
    3. Log into your Online Banking account
  • Monthly service fee and how to waive it: No monthly service charges.
  • ATM fees: None
  • ATM refunds: Up to $25 per qualification cycle if you meet the requirements to earn the high APY.

Consumers Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
    1. Make 12 Debit card point-of-sale purchases without using the PIN (all 12 must post and clear the account on or before the last day of the calendar month)
    2. Have at least one direct deposit, ACH debit, OR bill payment (using Consumers Credit Union's online bill pay system) post and clear the account on or before the last day of the calendar month.
    3. Sign into their Online Banking system at least once each calendar month
    4. Be signed up for eStatements
      • Keep in mind that Consumers Credit Union will add an additional requirement each time the balance grows to earn the higher APY.
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None
  • ATM refunds: Complete reimbursement for all ATM fees charged from ATMs outside of their surcharge-free ATM network as long as you meet the minimum requirements of their Rewards Checking Account.

Partner Colorado Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to do three things each month:
    1. Use your debit card to make at least 20 signature-based purchases of $5 or more
    2. Be signed up for eStatements
    3. Log into your Online or Mobile Banking account
  • Monthly service fee and how to waive it: $5; waived if you meet the requirements to earn the high APY.
  • ATM fees: None.
  • ATM refunds: All ATM surcharge fees are refunded.

Signature Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following things each month:
    1. Have at least one direct deposit into your account of $1,000 or more
    2. Be enrolled in e-statements
    3. Use your debit card to make at least 10 purchases per month
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None.
  • ATM refunds: Signature Federal Credit Union allows you to choose from either a higher interest rate, $10 in waived ATM fees, or debit card rewards points. If you choose the higher interest rate, they will not waive ATM fees.

Lake Michigan Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to complete these four actions each month:
    1. Have at least one direct deposit into any Lake Michigan Credit Union account
    2. Make at least 10 debit purchases
    3. Log onto online banking at least four times
    4. Be signed up for eStatements
  • Monthly service fee and how to waive it: No monthly service fees.
  • ATM fees: $1.00 for out-of-network ATMs.
  • ATM refunds: $15 per month in out-of-network ATM surcharge fees (i.e., the fees that the ATM’s owner tacks on).

Great Lakes Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following actions each month:
    1. Have at least $500 in direct deposits into the account
    2. Make at least 10 signature-based debit card purchases of $100 or more
    3. Be signed up for eStatements
    4. Use Bill Pay at least once or log into Mobile Banking at least once
  • Monthly service fee and how to waive it: $5; waived if you have at least $500 in direct deposits each month and 5 signature-based debit card purchases per month.
  • ATM fees: $2.00 for non-Great Lakes Credit Union ATMs, $0.50 per balance inquiry even for in-network ATMs.
  • ATM refunds: $5 per month if you meet the requirements to earn the high APY.

How are these banks able to offer such a high APY?

Did you notice that most of the institutions offering high yield checking accounts tend to be smaller names that you’ve probably never heard of? It turns out there’s a good reason for that, and it all has to do with some recent legal changes.

Back when the Dodd-Frank Act was passed in 2010, a tiny legislative nugget called the Durbin Amendment was included in the text. This amendment limited the swipe fees that big banks can charge merchants for each purchase that one of their customers makes using a debit card.

Suddenly, big banks could only charge half as much per swipe as they had been doing, and swipe fees became a lot more lucrative for smaller banks and credit unions instead.

That’s why so many smaller institutions have strict rules requiring you to use your debit card each month. According to the Federal Reserve, in 2016 smaller banks earned anywhere from 18 to 65 cents for each debit card swipe, compared to a maximum of just 22 cents plus 0.05% of the purchase price for larger banks.

Say, for example, a smaller bank requires you to make 10 debit transactions per month, and earns 65 cents from each transaction. Your bank would then earn $6.50 from your spending that month.

That is where the high interest rates come from. It’s also why the high interest rates are generally capped to smaller balances, so that you don’t earn too much money and negate all the swipe fees that the bank earns.

Is it worth meeting requirements to go after the high APY?

Some of these high yield checking accounts have a lot of requirements.

If you prefer to use debit cards, chances are you’ll be able to easily meet the minimum debit swiping requirements for most of these accounts. On the other hand, if you’re a cash or credit card junkie, you may find yourself frequently worrying at the end of the month about whether or not you’ve met the minimum debit swiping requirements. In this case, a high yield checking account might not be right for you.

Another thing to consider is that many of these banks require you to make a signature-based debit transaction, rather than a PIN-based debit transaction for it to count. Unfortunately, this is slightly less secure than using the PIN-based payment method.

You’ll also need to avoid making a rush of charges at the end of the month to meet the spending requirements. That’s because banks and credit unions will usually only count a charge that has finished posting to your account towards meeting the monthly swiping requirement. It can take a few days for debit swipes to post to your account, so it’s better to get these charges in early to make sure they post to your account in time to count.

The good news is that checking accounts aren’t designed to hold significant amounts of cash. That’s what a savings account is for, and you can still earn pretty good interest rates with a high yield savings account (although still nowhere close to these checking accounts).

If you’re going to keep a smaller deposit in your checking account anyways, why not earn as much as you can from it—especially if you know you’ll have an easy time meeting the requirements?

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Reviews

CIT Bank Review: Savings and CD Rates

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

CIT Bank review
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CIT Bank originally started as a business banking system. That’s where the acronym CIT—Commercial Investment Trust—came from. But lest that lead you to believe they aren’t for the average person, take heart: they’ve broadened their services to include several personal banking products.

Still, this is an online-only bank. That’s good news if you’re an internet-savvy consumer looking for great rates, since online-only banks typically don’t have a lot of overhead and can pass the savings along to you in the form of higher rates.

But, how good are these rates, really? And are the terms that CIT bank offers any good?  With one of the highest interest rates currently on the market and zero fees, which we highlight in our review,  it's certainly a great option for savers looking for low-fee, high-yield accounts.

We’ll look at their two main personal banking products — CDs and savings accounts — in this article to help you make an informed decision about whether CIT Bank is right for you.

Note: All rates are current as of February 2, 2018.

CIT Bank CD rates

Term CDs

CIT Bank Term CDs provide decent returns for your investment and flexibility in determining how interest payments are handled.

Term

APY

6 months

0.72%

1 year

1.32%

13 months

1.70%

18 months

1.75%

2 years

1.40%

3 years

1.30%

4 years

1.50%

5 years

1.70%

  • Minimum amount to open an account: $1,000
  • Minimum amount to earn APY: $1,000
  • Early withdrawal penalty: For CD terms that are one year or less, three months’ worth of interest is the penalty. For CD terms that are over one year up to three years, the penalty is six months’ worth of interest. For CD terms over three years, the penalty equals 12 months’ worth of interest.

One neat thing about CIT Bank’s Term CDs (and all of their CDs, actually) is how they let you manage the interest you’ve earned on your CDs.

You can choose from three options:

  1. Invest the interest back into the CD
  2. Have the interest you earned taken out and deposited into a CIT Bank savings account
  3. Or, you can have it transferred into another account (such as your checking account at a different bank).

Be warned, though: you won’t earn as much interest over the life of the CD if you choose to withdraw the monthly interest payments.

CIT Bank will give you a heads-up 30 days before your CD matures. Once it does mature, it’ll automatically roll over into another CD with the exact same term length. However, you have a 10-day grace period to withdraw your money, add more cash, or transfer it to a different type of CD.

How to get a CIT Bank term CD

It’s an easy process to open up a CIT Bank Term CD online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

LEARN MORE 

Member FDIC

No-Penalty CD

A high-earning option for folks who might need their money before the CD matures — but it’s only available in one-term length.

Term

APY

11 months

1.55%

  • Minimum amount to open an account: $1,000
  • Minimum amount to earn APY: $1,000
  • Early withdrawal penalty: None for this CD.

If you think you might need to withdraw your CD before the term is up, CIT Bank’s No-Penalty CD might be right for you. You’re allowed to withdraw everything — principal and interest — once per term without paying an early withdrawal penalty.

The only catch is that you can only do so after a week or so has passed from the time you open your account—meaning your money is locked away for the first six days. Still, a six-day period under lock and key is way better than an 11-month period. Even better, you don’t really sacrifice any potential earnings for choosing this option — currently, the APY on this 11-month No-Penalty CD is even higher than CIT Bank’s 1-year Term CD.

You also get the option to have interest payments deposited right back into your CD account, another CIT Bank savings account, or an external account. CD maturity for this No-Penalty CD works the same as with a regular Term CD. Your 11-month No-Penalty CD will automatically roll over into another 11-month No-Penalty CD once matured, with a 10-day grace period to withdraw the cash or make any changes to the CD itself.

How to get a CIT Bank no-penalty CD

It’s an easy process to open up a CIT Bank No-Penalty CD online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

LEARN MORE 

Member FDIC

RampUp™ Plus CD

This CD gives you the option to raise your interest rate and/or add more money — but only once per term.

Term

APY

1 year

1.26%

2 years

1.27%

  • Minimum amount to open an account: $25,000
  • Minimum amount to earn APY: $25,000
  • Early withdrawal penalty: For the 1-year CD, you’ll pay three months’ worth of interest. For the 2-year CD, you’ll pay six months’ worth of interest.

One of the downsides of being locked into CDs is that if interest rates go up or you come across a sudden windfall of cash, you’re out of luck. You can’t take advantage of those fortuitous events unless you open a new CD (assuming you have enough cash on hand to meet the CD’s minimum deposit requirement, if there is one).

CIT Bank’s RampUp™ Plus CD changes that. You'll have the option to adjust your rate once if our rates go up, plus you can add to your deposit once during the term of your CD.

There are some limits, however; you can’t deposit more than $250,000 into your CD account (a wise decision, since this is the limit of FDIC insurance anyway), and the maximum interest rate rise they’ll honor is twice your current APY minus 0.05%. The original length of your term also stays the same — i.e., adding more money or boosting the APY does not increase the length of your term.

Your CD is handled similarly to other CIT Bank CDs once matured. It will roll over into another CD of the same type and term, but you’ll get a 10-day grace period to withdraw the cash, add more money, or change the CD to a different term or type.

How to get a CIT Bank RampUp™ Plus CD

It’s an easy process to open up a CIT RampUp™ Plus CD online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

LEARN MORE 

Member FDIC

RampUp™ CDs

This CD account is similar to the RampUp™ Plus, however you aren’t able to add more money during the CD’s term.

Term

APY

3 years

1.20%

4 years

1.38%

  • Minimum amount to open an account: $25,000 for the 3-year CD. $50,000 for the 4-year CD.
  • Minimum amount to earn APY: $25,000 for the 3-year CD. $50,000 for the 4-year CD.
  • Early withdrawal penalty: Six months’ worth of interest for the 3-year CD. 12 months’ worth of interest for the 4-year CD.

If you like the idea of being able to raise your rates upward, but want to invest on a slightly longer term, consider a RampUp™ CD. These CDs are offered in three- and four-year terms instead, and also allow you to boost your rates once during each term (again, with a cap of twice your current rate, minus 0.05%).

There are two important differences between these RampUp™ CDs and the shorter-term RampUp™ Plus CDs. The four-year RampUp™ CD has a much higher minimum deposit size — $50,000, versus $25,000 if you’re investing a smaller amount. Additionally, you cannot add more money into these CDs. You only have the option to raise your rates, and that’s it.

Once mature, these CDs will also automatically roll over into another RampUp™ CD of the same type. You’ll have a 10-day grace period to withdraw the money, make any changes to the CD term or type, or add more money.

How to get a CIT Bank RampUp™ CD

It’s an easy process to open up a CIT RampUp™ CD online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

LEARN MORE 

Member FDIC

Jumbo CDs

CIT Bank’s Jumbo CDs allow you to earn a slightly higher interest rate for a much larger deposit size.

Term

APY

2 years

1.45%

3 years

1.40%

4 years

1.60%

5 years

1.75%

  • Minimum amount to open an account: $100,000
  • Minimum amount to earn APY: $100,000
  • Early withdrawal penalty: Six months’ worth of interest for the 2- and 3-year CDs. 12 months’ worth of interest for the 4- and 5-year CDs.

If you can come to the table with deep pockets — at least $100,000 to be exact — you can open one of CIT Bank’s Jumbo CDs. These big accounts work exactly like the normal term CDs, with one exception: You can earn a slightly higher interest rate.

As with the other CDs, you can also choose to withdraw your interest payments at any time penalty-free to a CIT Bank savings accounts, an external bank account, or just let the interest payments pile up in your CD account so you earn even more.

Once your Jumbo CD matures, it’ll automatically roll over into another Jumbo CD with the same term length. Again, you’ll have a 10-day grace period if you want to withdraw the money, add more funds, or change the CD to a different type or term length.

How to Get a CIT Bank Jumbo CD

It’s an easy process to open up a CIT Jumbo CD online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

LEARN MORE 

Member FDIC

How CIT Bank’s CDs compare

We like the diversity of CD products that CIT Bank offers. Rather than just having a one-size-fits-all term CD, you can also choose from jumbo CDs and bump-rate CDs. The interest rates offered on these CDs aren’t the highest CD rates out there, but they’re pretty darn close.

CIT Bank high-yield savings account

This high-yield savings account offers one of the highest interest rates available in the U.S.

APY

Minimum Balance Amount

1.55%

$100

  • Minimum opening deposit: $100
  • Monthly account maintenance fee: None

CIT Bank currently holds one of the top spots for highest interest rate in the nation. While they technically have two interest rate tiers, the interest rate is currently the same for both tiers. However, it is possible that CIT Bank may change it in the future so there are higher interest rates for different deposit sizes.

This bank account is very accessible for anyone who wants to bank online. With a minimum deposit size of $100, nearly anyone can meet the minimum deposit requirements for this account.

The only downside of this account is that it doesn’t come with ATM access. The only way to get money in and out of your account is by electronic transfer, by requesting or sending in a physical check, or by wire transfer.

How to get CIT Bank’s high-yield savings account

It’s an easy process to open up a CIT high-yield savings account online. You’ll need to apply for an account by providing personal information such as your name, Social Security Number, and a valid form of government-issued ID.

Once you have an account set up, you can fund it by sending in a check or setting up an electronic transfer from another bank.

How CIT Bank’s savings account compares

We really love CIT Bank’s savings account for three reasons. This account has:

  • One of the highest interest rates currently on the market
  • Zero fees
  • A low, easily-achieved minimum deposit size

However, there are a couple of reasons why you may want to consider another one of our top savings account choices. Firstly, this account doesn’t come with an ATM card — leaving you out in the cold if you really need access to your money via this route. Secondly, CIT Bank doesn’t offer a matching checking account, meaning that you’ll still need to rely on another bank for your daily banking needs.

Still, if the lack of an ATM card and having your savings in an external (and very high-earning) savings account don’t bother you, then you really can’t go wrong with this account.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Advertiser Disclosure

Reviews

Citizens Bank Review: CDs, Checking, Savings, Money Market, and IRA Accounts

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citizens Bank
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Although Citizens Bank is one of the largest banks in the nation, it only got its start relatively recently, in 2005. Since then, it has become the largest bank in Rhode Island (where it’s headquartered) and opened over 1,200 local branches along the East Coast and in the Midwest.

We wanted to know: How do the deposit accounts at Citizens Bank stack up with the competition? What are the hidden “gotchas” and what do you need to know before opening an account?

The interest rates that Citizens Bank offers on its deposit accounts vary according to where you live. So, to make things simple, we’ll compare their rates across accounts in the 02903 zip code (Providence, R.I.) where its headquarters is located. To find out the rates in your area, click on the link “Specify Your Location” on their homepage.

All rates are current as of Feb. 2, 2018.

Citizens Bank CD Rates

Citizens Bank offers limited options for CDs and very low rates unless you also have an existing premium account with them.

 

12-Month Breakable CD

14-Month CD

48-Month CD

Standard APY

0.05%

0.10%

0.10%

APY with Platinum Checking

0.10%

1.15%

1.35%

APY with Platinum Plus Checking

0.20%

1.40%

1.55%

  • Minimum opening deposit: $1,000 for the 14 and 48 month CDs and $10,000 for the 12 month CD
  • How interest is compounded: Interest is calculated based off of your daily balance, then tallied up and deposited into your account monthly.
  • Early withdrawal penalties: $50 plus whichever of the following two options is less:
        1. 180 days’ worth of interest on the withdrawn amount
        2. Half of the remaining interest you would have earned
  • Grace period: Your CD will automatically roll over to another CD with the same term. However, you have a 10-day grace period to withdraw or add funds without paying an early withdrawal penalty.

12-Month Breakable CD

The bar for opening this CD is set very high: You’ll need to come to the table with at least $10,000. In return, you will earn interest, but at very low rates even if you qualify for a higher rate by also holding a platinum-level checking account.

One of the benefits of this account is that you’re allowed to make one full or partial withdrawal of your cash during its 12-month term without paying an early-withdrawal penalty. If you think you might need to withdraw the cash before the term ends, this may be a wise choice.

14-Month CD

This CD is much more accessible for people with smaller amounts of cash because it only requires one tenth of the money as the 12-month breakable CD. The rate for this CD is also a lot better — but only if you have an existing Platinum or Platinum Plus Checking Account.

48-Month CD

This CD is interesting. It’s also fairly accessible for people with smaller opening deposits. However, unless you have one of the Platinum checking accounts, there’s no real incentive to open a 48-month CD over a 14-month CD because the rates are exactly the same.

In fact, if these two CDs pay the same interest rate for non-Platinum checking account members, it’s probably better to stick with the 14-month CD because you’ll earn exactly the same interest rate and you’ll get more frequent access to your money if you need it.

How Citizens Bank CD rates compare

Citizens Bank clearly wants you to be a Platinum Checking Account member, and these CDs only make sense if you are one. The rates offered for Platinum Checking Account holders on their 14-month and 48-month CDs are actually slightly better than national averages.

Otherwise, if you’re just walking into this bank off the street (or logging in), pass this one up. You can earn much better CD rates elsewhere without the checking account requirements.

How to get a Citizens Bank CD

If you decide a Citizens Bank CD is right for you, good news: It only takes about 10 minutes to apply for an account, and you can apply online or in a local branch. All you’ll need is basic personal information (including your social security number), a government-issued photo ID, and some way to fund your account.

You can fund it with a check, or a credit or debit card, but heads up: If you go the card route, you can only make the minimum opening deposit of $1,000 — you can’t deposit anything more than that.

Citizens Bank Checking Account Options

The checking accounts at Citizens Bank offer few benefits in exchange for high fees and requirements — however, they may be useful if earning higher rates on another product is your endgame.

One Deposit Checking from Citizens Bank®

  • Minimum opening deposit: Any amount.
  • Interest rate: None.
  • Monthly maintenance fee: $9.99
  • How to waive monthly maintenance fee: Citizens Bank will waive the fee if you’re a minor, or if you have at least one deposit into your account each statement period.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? None.
  • Overdraft fee: $35 per item (up to seven per day).

Even though this is Citizens Bank’s most basic-level checking account, it isn’t one you can walk away from and leave on autopilot. You’ll need to make at least one deposit into the account each statement period in order to avoid the exorbitant $9.99 monthly fee.

Not only that, but it will cost you to use this account anyway — at least indirectly. Checks do not come free with this account. You’ll need to pay at least $9.99 for an order of checks if you want to, you know, write checks from your checking account.

Citizens Bank Platinum Checking™

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.02% APY for any amount in your account.
  • Monthly maintenance fee: $25
  • How to waive monthly maintenance fee: Keep at least $25,000 across all of your Citizens Bank investment and deposit accounts.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? Your first four non-Citizens Bank ATM charges will be waived each statement period (but not the ATM surcharge).
  • Overdraft fee: No fee for overdraft transfers or overdraft lines of credit.

This is Citizens Bank’s lowest premium-level checking account. If you have this account, you can qualify for higher rates on CDs, savings accounts, and money market accounts, a 0.125% discount on a mortgage, and waived fees for things like paper statements or stop check orders. Plus, you’ll get free checks. You can also earn interest with this account, albeit at a very low level.

In return, Citizens Bank wants you to keep a fairly high amount of cash with them in deposit and investment accounts. Make sure you can commit to this so you don’t have to face the high $25 monthly fee.

Citizens Bank Platinum Plus Checking™

Amount

$0-$24,999

$25,000-$249,999

$250,000+

APY

0.03%

0.05%

0.07%

  • Minimum opening deposit: Any amount.
  • Monthly maintenance fee: $25
  • How to waive monthly maintenance fee: You’ll need to keep at least $25,000 in linked deposit or investment accounts, plus one of the following two requirements: either deposit at least $5,000 per month into your account, or keep at least $10,000 in your account.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? Your first four non-Citizens Bank ATM charges will be waived each statement period (but not the ATM surcharge).
  • Overdraft fee: No fee for overdraft transfers or overdraft lines of credit.

This is basically the same account as the lower-level Citizens Bank Platinum Checking account with one extra bonus: a slightly higher, but still overall lackluster, interest rate.

In return for this higher interest rate you’ll need to jump through a few extra hoops (in addition to having at least $25,000 in linked deposit or investment accounts): keep an average of at least $10,000 in your checking account, or deposit at least $5,000 into your checking account each statement period.

How Citizens Bank checking accounts compare

Most checking accounts at large national banks set the bar fairly high to waive their outrageous monthly fees in return for low interest rates. Citizens Bank is no exception. Rather than using this account for its low interest rate, however, think outside the box: You actually can earn some decent rates on CDs if you hold one of the Platinum checking accounts.

If you can meet the requirements on these Platinum checking accounts, want to earn higher rates on CDs, and if Citizens Bank is convenient for you to work with, then this bank might make sense for you.

However, it’s still possible to find higher interest rates with fewer pesky requirements by opening a checking account with one of these online banks.

How to get a Citizens Bank checking account

If you decide a Citizens Bank Checking Account is right for you, good news: it only takes about 10 minutes to apply for an account, and you can apply online or in a local branch. All you’ll need is basic personal information (including your social security number), a government-issued photo ID, and some way to fund your account.

You can fund it with a check or a credit or debit card, but again, if you go the card route, you can only make the minimum opening deposit of $1,000 — you can’t deposit anything more than that.

Citizens Bank Savings Account Options

Citizens Bank does offer savings accounts with some neat features, but they’re still plagued with low interest rates and potentially high fees.

GoalTrack Savings®

GoalTrack Savings is a savings reward program that you can enroll in with any savings account, except for the CollegeSaver and Citizens Bank HomeBuyer Savings accounts. If you enroll in this program, you have to make a pledge: I will save X dollars each month for X months.

If you reach your goal, Citizens Bank will reward you with a gift card to certain merchants such as Best Buy, Lowe’s, Hyatt, or Pizza Hut. The amount of the gift card may be as follows:

Months

$25-$49

$50-$99

$100-$199

$200-$399

$400+

8-11

Discount at a merchant

$5

$5

$10

$20

12-17

$5

$5

$10

$20

$40

18-23

$5

$10

$20

$40

$75

24-35

$10

$20

$40

$75

$100

36+

$20

$40

$75

$100

$250

Green Savings®

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.01% APY for any amount in your account.
  • Monthly maintenance fee: $4.99
  • How to waive the monthly maintenance fee: Fee is waived for the first four months of account opening. After that, the fee is waived if you keep an average of at least $200 in your account every day.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? None.
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

Citizens Bank’s Green Savings account is their most basic savings account. It’s also their only savings account to charge a fee, which you can avoid as long as you keep a small amount of cash ($200) in this account.

That means that this account isn’t meant to ever be drained completely lest you face the pesky monthly fee. Make sure you take that into account — i.e., if you’re saving for a specific goal, you’ll need to bump up your savings target by $200 to leave enough in this account after you withdraw the cash.

Citizens Bank Platinum Savings™

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.02% for any amount in your account.
  • Monthly maintenance fee: None.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? None.
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

This account comes standard with Citizens Bank’s Platinum Checking account. Although this account doesn’t have a monthly maintenance fee, the checking account does: $25, unless you qualify to have the fee waived.

The benefits of this savings account aren’t much greater than Green Savings, which you can open without a demanding checking account. Thus, we only recommend this account if you’re interested in the Platinum Checking account anyway.

Citizens Bank Platinum Plus Savings

Amount

$0-$24,999

$25,000-$249,000

$250,000+

APY

0.03%

0.05%

0.07%

  • Minimum opening deposit: Any amount.
  • Monthly maintenance fee: None.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? None.
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

This is Citizens Bank’s most premium-level savings account. It also comes standard with a Platinum Checking account, meaning that you’ll have to pay a $25 monthly fee for that account as well unless you qualify to have the fee waived.

In return, you get slightly higher savings account rates, as well as higher rates on things like CDs and money market accounts.

CollegeSaver®

  • Minimum opening deposit: $25 if your child is under 6 years old. $500 if your child is 6-12 years old.
  • Interest rate: 0.05% for any amount in your account.
  • Monthly maintenance fee: None.
  • Minimum monthly deposit: If your child is under 6 years old, you’ll need to deposit $25 per month until his or her 18th birthday. If your child is between 6 to 12 years old, you’ll need to deposit $50 per month until his or her 18th birthday.
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

If you’re looking to save up some extra cash for your kid’s college bill, the CollegeSaver account might be able to help. Be warned, though: it does have some steep requirements. You’ll have to commit to depositing at least $25 into the account ($50 if your child is between ages 6-12) every single month until their 18th birthday. If you can do this, you’ll get a nice bonus: When your child turns 18, Citizens Bank will throw an extra $1,000 into your savings account.

This is a nice idea, but unfortunately this account still doesn’t earn much interest — just 0.05% APY. If saving for your kid’s college is a priority, you may be better off investing that money in a tax-advantaged savings account such as a 529 plan or a Coverdell account.

Citizens Bank HomeBuyer Savings®

  • Minimum opening deposit: $100
  • Interest rate: 0.05% for any amount in your account.
  • Monthly maintenance fee: None.
  • Minimum monthly deposit: $100
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

If you’re saving for a house, you might want to consider the Citizens Bank HomeBuyer program. If you can commit to saving $100 per month for 36 months straight, you can get a $1,000 credit toward the closing costs on a Citizens Bank mortgage (assuming you qualify). You also get a free pass to skip one monthly deposit per year without losing eligibility for the $1,000 credit.

If you do earn the credit, be prepared to use it fairly soon: You have another 36 months after you earn the credit to complete the purchase of a home, or lose it.

This sounds like a good plan (and it very well may be), but remember: Just because you get a $1,000 credit at the start of your mortgage doesn’t mean it’ll be cheaper in the long run.

Who knows what mortgage interest rates Citizens Bank will be charging three years from now and whether they’ll be competitive or not. You might end up saving $1,000 now only to shell out thousands more later.

How Citizens Bank savings accounts compare

While we do like some of the unique savings accounts that Citizens Bank offers (specifically the savings accounts for college and home down payments), we think that the interest rates offered are still very low.

Furthermore, their savings accounts either come with unnecessarily high fees, or are linked to checking accounts that do have high fees.

Unless there’s something really tying you to Citizens Bank, we think that you can earn a lot more and pay a lot less with other online savings accounts.

How to get a Citizens Bank Savings account

If you decide a Citizens Bank savings account is right for you, good news: It only takes about 10 minutes to apply for an account, and you can apply online or in a local branch. All you’ll need is basic personal information (including your social security number), a government-issued photo ID, and some way to fund your account.

You can fund it with a check or a credit or debit card, but once again, if you go the card route, you can only make the minimum opening deposit of $1,000 — you can’t deposit anything more than that.

Citizens Bank Money Market Account Options

The rates you can earn on these money market accounts are generally rock-bottom, unless you can qualify for the promotional rates offered on the premium-level accounts.

Personal Money Market

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.01% APY for any amount in your account.
  • Monthly maintenance fee: $10
  • How to waive the monthly maintenance fee: Keep a minimum of $2,500 in your account.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? None.
  • Excessive transaction fee: You’re allowed six certain transactions per month as per Federal Regulation D. After that, you’ll be charged $15 per transaction.

This account also comes with checks, however watch out: You can only use the checks up to three times per month without incurring an excessive transaction fee. Like savings accounts, you’ll also be limited to just six certain transactions per month according to Federal Regulation D rules. If you go over, you’ll have to pay a $15 transaction fee.

If you end up paying this fee more than three times in a year (or “significantly exceed these transaction limits in any one statement cycle,” as stated in Citizens Bank's Fees and Features Guide), your account may be automatically downgraded into a non-interest-bearing checking account.

Citizens Bank Platinum Money Market™

Promotional offer: If you deposit at least $25,000 of new-to-Citizens-Bank money in a new Citizens Bank Platinum Money Market account, you’ll earn the following interest rates until November 30, 2018:

Amount

$0-$24,999

$25,000-$2,999,999

$3,000,000+

APY

0.03%

1.10%

0.03%

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.03% APY for any amount in your account (unless you qualify for the promotional rates above).
  • Monthly maintenance fee: None.
  • How to waive the monthly maintenance fee: Keep a minimum of $2,500 in your account.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? Your first four non-Citizens Bank ATM charges will be waived each statement period (but not the ATM surcharge, however).
  • Excessive transaction fee: You’re allowed six certain transactions per month (including three checks) as per Federal Regulation D. After that, you’ll be charged $15 per transaction or check.

You are eligible to open this account if you have a Platinum Checking account. Like the other premium-level savings accounts, this account has no monthly maintenance fee of its own, but its linked Platinum Checking account does.

Citizens Bank Platinum Plus Money Market™

Promotional offer: If you deposit at least $25,000 of new-to-Citizens-Bank money in a new Citizens Bank Platinum Plus Money Market account, you’ll earn the following interest rates until November 30, 2018:

Amount

$0-$24,999

$25,000-$2,999,999

$3,000,000+

APY

0.05%

1.35%

0.25%

  • Minimum opening deposit: Any amount.
  • Interest rate: 0.10% APY for any amount in your account (unless you qualify for the promotional rates above).
  • Monthly maintenance fee: None.
  • ATM fees: None for Citizens Bank ATMs. $3 for using non-Citizens Bank ATMs, plus whatever surcharge fees the ATM’s owner charges.
  • ATM fee refunds? Your first four non-Citizens Bank ATM charges will be waived each statement period (but not the ATM surcharge, however).
  • Excessive transaction fee: You’re allowed six certain transactions per month (including three checks) as per Federal Regulation D. After that, you’ll be charged $15 per transaction or check.

If you have a Citizens Bank Platinum Plus checking account, you’re eligible to open this corresponding money market account as well. Normally, the rates are very low (0.10% APY), however, if you have enough cash to take advantage of the promotional offer (meaning you have $25,000 stashed somewhere outside of Citizens Bank that you bring in to open a new account), you can earn much more interest.

How Citizens Bank’s Money Market accounts compare

If you can qualify for the promotional rates offered on the Platinum or Platinum Plus Money Market accounts, you can actually earn pretty decent rates. Unfortunately, most people may have a difficult time earning them because you need to deposit at least $25,000 from another non-Citizens Bank account, and the rates only last until November 30th.

If you’re looking to maximize the interest rates you receive on a money market account, you can find better rates with money market accounts from other institutions.

How to get a Citizens Bank Money Market account

If you decide a Citizens Bank money market account is right for you, good news: It only takes about 10 minutes to apply for an account, and you can apply online or in a local branch. All you’ll need is basic personal information (including your social security number), a government-issued photo ID, and some way to fund your account.

You can fund it with a check or a credit or debit card, but if you go the card route, you can only make the minimum opening deposit of $1,000 — you can’t deposit anything more than that.

Citizens Bank IRA Options

These retirement savings vessels are light on information—make sure you do your research before choosing to open an account.

IRA CDs

Citizens Bank offers some less-touted IRA CD options, including terms ranging from one to 120 months. You can get started with one of their IRA CDs with a deposit as small as $250. There is no monthly account maintenance fee.

The interest rates on these IRA CDs are not advertised on their website, however, so you’ll need to contact the bank directly if you’d like to open an IRA CD.

How to get a Citizens Bank IRA CD

If you’re interested in getting a Citizens Bank IRA CD, make sure you do your homework first by calling the bank or visiting them in person to verify the rates and term options for their different CDs.

If you’re looking for a good benchmark to compare the rates, check out other IRA CD options.

IRA Savings

Citizens Bank also offers an IRA Savings account, however they offer just about as much information on it as with their IRA CDs (that is to say, very little).

You can open an IRA Savings account with any amount you wish. Your first four months with this account are free, but after that you’ll need to pay a $4.99 monthly maintenance fee if you don’t keep at least $200 in your account.

How to get a Citizens Bank IRA savings account

Again, if you’re interested in this account you’ll need to either call Citizens Bank or visit a branch to get the information you need to make an informed decision. Specifically, you’ll need to inquire about the interest rate being offered and whether there are any fees associated with the account.

Overall review of Citizens Bank

Citizens Bank does offer some niceties with their accounts. In particular, we like the monetary bonuses they throw in for the CollegeSaver and HomeBuyer Savings accounts, in addition to their GoalTrack gift card bonuses. These rewards may provide just enough incentive if you’re looking to stick to your savings goals.

However, we are not excited about the rates that they offer and the amount of fee baggage that these accounts come with. In this day and age, it’s very easy to find a bank that doesn’t hang you high and dry with fees.

The only reason we can see recommending Citizens Bank is if you want to use an in-person branch exclusively and if Citizens Bank is the closest bank to you. Otherwise, we’d skip past this one in favor of something better.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Reviews

Citibank Review: Savings, Checking, CD, and IRA CD and Money Market Accounts

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citibank Reviews
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You might think of credit cards when you hear the name “Citi,” and you wouldn’t be wrong. This bank — one of the largest banks in the entire world — is well-known for its line of credit cards. But Citibank offers a variety of financial products, including several deposit accounts where you can safely store your cash. But are they any good? And how do their rates and rules compare to other banks?

We’re going to dive into Citibank’s deposit accounts in this review so that you can decide whether it’s right for you or not.

One important note: The rates for each of these accounts vary depending on where you live. To compare consistent numbers, we decided to report rates from South Dakota, because Citibank is headquartered there, in Sioux Falls. Rates are accurate as of Feb. 02, 2018. To see rates for your area, go to Citibank’s website and enter your state.

How Citibank’s checking and savings accounts work

You can’t really get an individual checking or savings account at Citibank. Instead, you have to apply for one of five account packages. That means that when you open a checking account, you’ll also get a linked savings account, and vice versa.

Some account packages come with a monthly maintenance fee, which applies to the account package as a whole. For example, if there is a $30 monthly fee and you don’t meet the requirements to waive it using either your checking or savings account, the fee will be taken out once that month from your checking account.

To make things less confusing, we’ll go through all of the account packages first describing the checking accounts, because these accounts differ the most between account packages. Then, we’ll describe how the savings account works within each of these packages.

Citibank checking accounts

Checking account offer

Citibank is currently offering a great sign-up bonus when you open a new qualifying checking account before March 31, 2018.

To get a sign-up bonus of $300, you’ll have to do three things. First, open a new checking account within a Citibank® Account Package. Second, you’ll have to fund it with at least $15,000 within 30 days of opening the account and keep the money there for at least 60 days. Third, you’ll have to set up a direct deposit into your new account for at least two consecutive months.

When applying for a Citibank deposit account, you’ll need to provide basic information about yourself (including your Social Security number) and a valid form of ID. Both offers require you to be a “New-to-Citibank” customer.

Citigold® Package

Myriad of exclusive deals and perks for people with a lot of cash

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: None
  • ATM fees: None
  • ATM refunds: All ATM surcharges from non-Citibank ATMs are refunded for any statement period you are eligible for Citigold®.
  • Overdraft fees: None

The Citigold® account package is more than just a checking account. To qualify for this account package you’ll need to bring a lot of cash to the table: You’ll need at least $200,000 in all linked Citi accounts, whether they be in your deposit, retirement or investment accounts. If your balances dip below that amount, Citi will automatically convert your account to the Citi Priority account package.

But, if you can meet that high bar, you’ll be eligible for numerous perks, even if the interest rate on this savings account is admittedly quite low. You’ll get a personal team to help you navigate the intricacies of all this account package has to offer — and it offers a lot more than just free checks. You’ll get a personal financial adviser, a concierge service and numerous travel perks, as well as discounts and waived fees on various loans, lines of credit and investments. Plus, you can enroll your checking account in Citi’s ThankYou Rewards® program.

You can apply for a Citigold® account online, over the phone, or by visiting a local branch.

Citi Priority Account Package

Nice perks for people with less — but still a lot — of money

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: $30
  • How to waive monthly maintenance fee: Keep at least $50,000 in linked Citibank accounts, including deposit accounts, retirement accounts and investment accounts.
  • ATM fees: None
  • ATM refunds: Not available
  • Overdraft fees: None

Unlike the Citigold® account, which has no fees, you’ll pay a high monthly fee of $30 with this account unless you can keep at least $50,000 in other linked Citi accounts. If you’re able to do that, though, you can still take advantage of many of the same perks offered to the premium Citigold® members.

You’re eligible to link your checking account with the Citi ThankYou® Rewards program. This account still waives all banking fees, and offers you discounts and waived fees off of investment products, loans, and lines of credit. And while you may not have an entire team waiting at your fingertips, you still have exclusive access to financial advisors to help you make investment decisions.

You can apply for a Citi Priority account online, over the phone or by visiting a local branch.

The Citibank® Account Package

Average account with above-average requirements

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.01% APY
  • Monthly maintenance fee: $25
  • How to waive monthly maintenance fee: Keep at least $10,000 in linked Citibank deposit, retirement or investment accounts.
  • ATM fees: $2.50 for each non-Citibank ATM use, unless you have at least $10,000 in linked Citibank accounts.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

If you can’t meet the high minimum balance requirements of the Citigold® or Citi Priority account packages, you might consider the Citibank Account. You can enroll your account in Citi ThankYou® Rewards, and your first order of checks is free.

But, you’ll still need to keep a high account balance of $10,000 in linked Citibank accounts to avoid paying the high monthly fee. In return, you earn interest on this account, but it’s a miniscule 0.01% APY.

You can apply for a the Citibank Account in online, over the phone or at a local branch.

Basic Banking Package

A no-frills account—but watch out for high fees.

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $12
  • How to waive monthly maintenance fee: You can get out of the maintenance fee if you
        1. are 62 years or older
        2. make one bill payment from your account and one qualifying direct deposit into your account each month
        3. keep at least $1,500 in your checking and/or savings account
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

This account is truly a no-frills version of Citi’s premium checking accounts. Not only does it not pay any interest or earn any Citi ThankYou® Rewards points, but you’ll have to watch out for high fees, as well. If you can’t meet the minimum deposit or age requirements, you’ll also be shelling out $12 per month for this austere account.

You can apply for the Basic Banking account online, over the phone or at a local branch.

Access Account Package

A high-fee checking account—that doesn’t let you write physical checks

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $10
  • How to waive monthly maintenance fee: There are three options:
        1. Keep at least $1,500 in your account
        2. Make a bill payment from your account
        3. Have at least one qualifying direct deposit into your account each month
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: None

This is a bit of a bizarre account. In exchange for a slightly lower fee ($2 less), you can get basically the same thing as the Basic Banking account but without the ability to write physical checks. If all you need to do is pay bills online, this account might work for you — but as soon as you need to write a physical check, you’re out of luck with this account.

Besides, the requirements to waive the monthly fee are almost the same, though the Access Account lets you slide by with one fewer bill payment/direct deposit per month. If you meet the requirements to have the Access Account maintenance fee waived, why not at least upgrade to the Basic Account and the ability to write physical checks?

If you do decide that this account is right for you, you for a Citi Access account online, over the phone or at a branch.

How Citibank’s checking accounts compare

Citibank’s premium account packages (Citigold® and Citi Priority) offer a lot of perks by way of waived fees and free services. However, unless you have deep pockets, you’ll likely be limited to considering The Citibank Account, Basic Banking or Access Account. These accounts come with high monthly account maintenance fees unless you can qualify for one of the ways to waive these pesky fees.

All of Citi’s checking accounts — even the ones with the nice premium perks — offer very low yields, especially compared to high-interest checking accounts available elsewhere.

Citi® Savings

Generally lackluster interest rates on savings account packages

  • Minimum opening deposit: $100
  • Monthly maintenance fee: For Basic and Access savings accounts, an additional $4.50 monthly maintenance fee applies if they are not linked to checking accounts. For account packages with linked checking and savings accounts, the fee may be charged to the checking account (see above account package descriptions for details).
  • How to waive monthly maintenance fee: For Basic and Access savings accounts, maintain a $500 minimum balance in your savings account or open the savings account with a linked checking account. Requirements for getting maintenance fees waived on other account packages are listed above.

Citigold® and Citi Priority Savings Account Rates

 

Annual Percentage Yield (APY) by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Promotional Interest Rate

0.10%

0.10%

1.00%

1.00%

1.00%

1.00%

1.00%

Standard Interest Rate

0.04%

0.06%

0.10%

0.10%

0.12%

0.15%

0.15%

*As of 2/2/2018

Citibank Account Package

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.08%

0.08%

0.10%

0.13%

0.13%

*As of 2/2/2018

Basic Banking and Access Account Packages

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.06%

0.06%

0.06%

0.06%

0.06%

*As of 2/2/2018

To qualify for the promotional interest rates offered with some of the packages, you’ll need to meet a few requirements. You’ll need to open a new savings account (within an account package) and fund it with at least $25,000. You’ll also need to be 18 years or older, and provide Citibank with a W-9 or W-8BEN. Unfortunately, these promotional interest rates only last for 90 days after you open your account, after which they revert to the much lower standard interest rates.

You can apply for a Citi Savings account online, over the phone or at al branch.

How Citibank’s savings accounts compare

Although Citibank offers good rates as high as 1.00% APY, it’s for a very short period of time and only if you bring a large amount of cash to the table and still meet other requirements.

Once the promotional period has passed, you’ll be left with piddly interest rates in account packages that may not meet your needs and potentially carry high fees to boot. If you’re looking for a low-fee and high-interest-rate savings account, you can do much better with other banks and credit unions like those in the roundup of the best online savings accounts.

Citibank CD Rates

Small earnings, but small early withdrawal penalties as well.

  • Minimum deposit amount: $1,000
  • How interest is calculated: Interest is calculated and paid monthly for CDs with terms longer than one year. For CDs with terms of one year or less, interest may be calculated and paid at maturity.
  • Early withdrawal penalties: For CDs with terms of one year or less, you’ll pay 90 days’ worth of interest. For CDs with terms of over one year, you’ll pay 180 days’ worth of interest. However, you can withdraw the interest at any time without paying a penalty.
  • When the CD matures: It’ll automatically renew for another CD of the same term length but with the current interest rate.
  • Grace period: After your CD matures and renews to another of the same term, you have seven calendar days to add or withdraw the funds penalty-free or change the CD to a different term length.

Citibank says that it offers different rates depending on which account package you open up a CD with. (That’s right — you can’t just go to the bank and open a CD. You need to have an existing account with them first.) But, as you’ll see below, the rates actually are the same for each type of account package.

CD Rates for Citigold® account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

0.25%

0.25%

0.25%

0.25%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

1.51%

1.51%

1.51%

1.51%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 2/2/2018

CD Rates for Citi Priority account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

0.25%

0.25%

0.25%

0.25%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

1.51%

1.51%

1.51%

1.51%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 2/2/2018

CD Rates for The Citibank Account, Basic Banking, and Access Account packages

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 2/2/2018

If you already have an account package with Citi and you’d like to apply for a CD, you can do so online, over the phone or at a branch. All you’ll need to provide is basic information about yourself (including your Social Security number), have a physical address in the United States, and have a valid form of ID.

If you have “issues with your credit history” or are depositing more than $100,000 into your CD, you cannot do so online or over the phone — you’ll have to go and visit a Citibank branch in person.

How Citibank’s CDs compare

Citibank offers very low rates on its CDs, especially compared to high yield CDs you can get elsewhere without having to mess around with account packages.

One clear advantage of Citibank CDs is that the early withdrawal penalties are relatively low. For example, the early withdrawal penalty on a five-year Citibank CD is 180 days’ worth of interest. Discover Bank — which offers much better CD rates — charges a whopping 18 months’ worth of interest if you withdraw the cash early from Discover’s five-year CD. However, Citi’s CD rates are so low, you’d be better off putting money in a high-yield savings account — the best ones offer rates higher than Citi’s CDs — and not worrying about early withdrawal fees. That wouldn’t necessarily be a good strategy in a falling-rates market, but since rates hit a historic low after the financial crisis, we’ve been in a rising-rates market.

Unless you a) already have an existing account with Citibank, b) don’t want to go through the hassle of opening a CD at another institution (it’s not hard, we promise), and c) think that there’s a high likelihood that you’ll withdraw the money early and don’t want to open accounts elsewhere, we wouldn’t recommend a Citibank CD.

Citibank banking IRA

Guaranteed low returns, especially when compared to equity investments

Citibank offers banking IRAs in two flavors: as CDs (with the rates listed in the section above), or as a money market account at an interest rate of 0.20% APY*. These rates are extremely low, especially when compared to higher-yielding IRA CDs.

In general, the returns on IRA CDs and money market accounts don't even come close to the kind of gains you need to be making while growing your retirement accounts, and Citibank's banking IRAs are no exception. For example, equities (i.e., stocks and bonds) earn average returns of around 7% per year — far higher than the piddly 0.50% APY that you can get in a best-case scenario with a Citibank CD.

In fact, the rates that Citi offers for banking IRAs are far lower than typical inflation levels (around 3% per year). This means that even if you opt for the highest rates that Citi offers, your money won’t even keep pace with inflation over time and you’ll be left with less and less each year (albeit at a guaranteed rate).

Overall review of Citibank

Although Citibank offers some great credit cards (such as the Citi® Double Cash Card and Citi® Simplicity Card), they fall short in the deposits department.

Citibank does offer some nice perks, such as some accounts being eligible for Citi’s ThankYou® Rewards program. The Citigold® and Citi Priority account packages come with features that can save you money and make your life easier, if you have the deep pockets required for these account packages.

All-in-all, while there are some bright spots to Citibank’s accounts, you can earn higher rates and pay lower fees at other banks and credit unions.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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