Savers nationwide can earn the best mid-term CD yield courtesy of a Boston-based internet bank and its parent company.
EBSB Direct is an online division of the East Boston Savings Bank. Both banks are offering a special 30-month CD that pays 2.21 percent APY.
The offer is 16 basis points higher than the 36-month CD rates available at Popular Direct. A basis point is one-hundredth of a percentage point.
A $1,000 initial deposit is required to buy the 30-month CD. That makes the account accessible to new investors and others who’ve been in the game for a while.
Compare this deal to other top 3-year CD rates. Then calculate how much interest you could earn when your account matures.
|M.Y. Safra Bank||2.01%||$5,000|
|Bethpage Federal Credit Union||2.00%||$50|
|Goldman Sachs Bank USA||2.00%||$500|
|Connexus Credit Union||2.00%||$5,000|
Why buying CDs now makes sense
In a rising rate environment, locking up funds in a CD may seem silly. The Federal Reserve may hike interest rates for the third time this year in December.
Even if interest rates climb, it often takes time for banks and credit unions to push up rates for savers. That’s why making the most of competitive offers right now could be worthwhile.
When comparing CDs, check out the yield and the early withdrawal penalty. According to East Boston Savings Bank’s Truth in Savings disclosure, an early withdrawal will cost you six months of interest on the amount withdrawn for terms over 12 months to 36 months.
You should also consider how often interest compounds. With East Boston Savings Bank CDs, interest compounds monthly. That means you may not earn as much as you would if interest compounded daily.
How to buy EBSB Direct CDs
EBSB Direct CDs can be purchased online or inside of an East Boston Savings Bank branch. To apply you must:
- Have a Social Security number
- Have a valid driver’s license or state ID
- Have a U.S. home address
New customers of East Boston Savings Bank must also be U.S. citizens.
To make your first deposit, you can transfer funds from an external account, mail a check or fund your account through a wire transfer.
When the 30-month CD matures, it automatically renews within 10 calendar days unless you claim your funds.
Typically when you buy a CD from a bank, deposits are insured up to $250,000 by the
Federal Deposit Insurance Corp. or the National Credit Union Administration.
East Boston Savings Bank, however, is a member of the FDIC and the Deposit Insurance Fund of Massachusetts, a private insurance fund. All of the money deposited in interest-bearing accounts (like CDs) is protected if the bank fails.
About EBSB Direct
EBSB Direct offers a high-yield savings account, money market account and CDs with various term lengths. Its parent company has been around for more than 168 years and is a Massachusetts chartered stock bank.
The East Boston Savings Bank earned four out of five stars on Bankrate’s latest Safe & Sound Ratings, which measures the financial health of banks and credit unions throughout the United States.