MutualOne Bank tops all the best CD rates

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A Massachusetts-based bank has a deal on CD rates that could add hundreds of extra dollars to your pocket.

MutualOne Bank recently began offering a nationally available 61-month CD with the highest interest rate available for this term: 2.53% APY.

That’s 23 basis points higher than the top 60-month CD rate offered by banks like Capital One 360 and Synchrony. A basis point is one hundredth of a percentage point.

The MutualOne Bank offer also is considerably higher than the national average for long-term certificates of deposit.

How to open a 5-year CD

The 61-month CD is available nationwide, but account holders must:

  • be at least 18 years old
  • be a U.S. citizen or U.S. resident alien
  • be a U.S. resident
  • have a Social Security number
  • have a credit or debit card or U.S. checking or savings account

Note MutualOne’s early withdrawal penalty: “If you withdraw any principal before the maturity date, a penalty equal to 540 days interest will be imposed and charged to your account.” That’s 18 months-worth of interest, which is pretty pricey.

The minimum deposit is $500.

Also note that the 61-month CD application is not yet available online. A bank representative told us that if you want to open the account without going to the bank’s Massachusetts locations, apply online for the highest CD available (right now that’s the 36-month CD) then call the bank to let a representative know you’d like to have the 61-month CD instead.

Your money is insured beyond the FDIC

While up to $250,000 of your money is insured by the FDIC, all deposits in your MutualOne CD above this amount are covered by the Share Insurance Fund, or SIF, a private fund insuring all deposits at co-operative banks in Massachusetts above FDIC limits. For any high rollers out there, this might be your perfect CD.

Anyone able to make a large deposit stands to benefit the most from this CD versus the 2.3% APY offers from Capital One 360 and Synchrony Bank. As our CD calculator shows, you’ll earn $700 extra on the MutualOne CD with a $50,000 deposit.

Whether it’s this CD or another, increasing the amount you save is a wise financial move. The typical American adult saved just 5.1% of personal disposable income in 2015, well below what financial planners recommend.

Looking for something a little more liquid? A money market account might be for you.