Incredible Bank, an online division of River Valley Bank in Wisconsin, is offering an “INCREDIBLE CD” that is only available online.
As of the 28th of May this 12 month CD comes with any APY of 2.00%. To put this offer in perspective, the current national average for 1 year CDs sits at roughly 1.15% APY.
There are a few catches with this product that you must take into account before opening. First, you accumulate your interest in a ‘bump-up’ sort of fashion. For example, with their 12 month CD, you will incur an interest rate of just 1.75% APY on your first 6 months, then the second 6 months of the 1 year term yields 2.25% APY, averaging out to 2.0% APY for the life of the deposit. Second, they require a rather steep minimum deposit of $10,000 and you will need to make this deposit online through Automated Clearing House Network.
This offer is available to consumers across the country and is federally insured by the FDIC.
Who is Incredible Bank?
Although Incredible Bank is solely an online operation, River Valley Bank has it’s roots dating back to 1967. As a whole, River Valley Bank and it’s subsidiaries have assets nearing $1 billion ($985 million as of 2012). They control roughly $840 in consumer deposits and service nearly $750 million in loans.
When incredible Bank came on the scene back in 2009, they had a fairly popular online checking account that was providing yields over 2 percent. This account has since seen it’s rates drop as interest rates in general have fallen substantially since that time, however, the account is still entirely free, complete with ATM reimbursements nationwide and mobile banking features.
Interest Rate Environment
Incredible Bank has pretty much entirely branded themselves as a rate leader. Their logo is a play on their superior rates and even their mission statement claims “to crush the puny interest rates offered by most other online banks.”While this is likely an effective approach in a normal rate environment, it doesn’t bode as well in today’s near zero savings rate landscape.
As of 2012, interest rates are projected to stay well beneath 1 percent until 2014, according to the FED. We would recommend opting for a liquid savings account so that your money is easily accessible. If you’re looking to stash your money away and not touch it for a certain period of time, you may want to consider investing in bonds.