One bank in New York is now adding fees to their deposit products (which already come with record low interest rates). The Bank of New York Melon Corp. said late last week that they will begin adding fees to customers who hold over $50 million in deposits with them.

So ok – at least they aren’t nickel and diming regular consumers looking to snag bank CD’s with FDIC insurance – but it still stings to the pension fund and money market fund holders looking for a safe place to park their clients’ cash. And, in our opinion, it sets a frightening precedent in an already unstable economic environment.

Why has the Bank of New York Melon Corp decided to go this route?

“The bank said it has seen such a large increase in deposits over the last month that it will charge a 0.13 percent fee to clients with “extraordinary high deposit levels.” Bank of New York Mellon, which has $23.6 trillion in client assets under its custody, said customers have moved money to cash as a safe haven in the past month as investments like stocks and bonds have become increasingly volatile.”

In a normal market, banks pay interest rates to consumers for depositing money with them. However, with the combination of short term rates at close to zero interest and an increase in FDIC insurance premiums, banks can get dinged for holding large amounts of cash on their balance sheet. Because deposits can get withdrawn at anytime (even with a penalty imposed for early withdrawal) they are considered liabilities. And when liabilities go up, banks must fork over more cash for FDIC insurance.

Check out some historical CD rates from New York banks in our archives.

Read more about the decision by New York Melon Corp here.

Top 3 6-Month CD Rates in New York:

(Like all bank rates, the APY’s we’ve mentioned below are time sensitive in nature. Please refer to our CD rate tables to find updated rate information across the country. You can also compare the APY’s below with the best CD rates in New York City from our archives to see how rates have been trending.)

1) Visions Federal Credit Union (Watkins Glen, NY) has a 6 month CD yielding 1.36% APY with a minimum deposit requirement of $2,500. Visions FCU has 16 branch locations throughout New York including one in Rochester, Syracuse and Norwich. If you live or work in Broome, Chenango, Tioga, Chemung or Schuyler counties in New York; or the Cities of Rochester or Syracuse, New York; or Bradford County, Pennsylvania; you can join Visions Federal Credit Union.

2) SeaComm Federal Credit Union (Potsdam, NY) has a 6 month CD yielding 1.32% APY with a minimum deposit requirement of $2,500. SeaComm FCU has just 5 locations in New York – Massena, Potsdam, Malone, Canton, and Ogdensburg. You are eligible to join SeaComm if you live, work, worship or attend school anywhere in St. Lawrence County or in the following municipalities of Franklin County: Bangor, Bellmont, Bombay, Brandon, Burke, Chateaugay, Constable, Dickinson, Duane, Fort Covington, Malone, Moira, St. Regis Reservation, Waverly and Westville.

3) Massena Savings and Loan Bank (Massena, NY) has a 6 month CD yielding 1.22% APY with a minimum deposit of $2,500 required. Massena Savings and Loan Bank has just 2 locations in New York – Massena and Waddington. You may wish to contact them about opening a CD over the phone if don’t live near one of their two branches.

To put the offers above in perspective, the current national average for 6 month CD’s sits at roughly 0.56% APY. If you live in New York and know of a better six month deposit rate, please share by leaving a comment!

The current national averages for 6 month CDs, 12 month CDs and 3 year CDs currently sit at 0.56% APY, 0.90% APY and 1.40% APY by the leading online and nationally available FDIC insured institutions. With average deposit rates struggling to keep up with inflation, many savers are beginning to get restless.

Sometime next week Federal Reserve Chairman Ben Bernanke will hold his first quarterly news conference regarding (among other things) interest rates. However, I wouldn’t hold your breath as to whether he’ll decide to raise rates. Many analysts have suggested Mr. Bernanke and his team will claim it’s still too early to raise key rates as it may have an adverse impact on the still fragile economic climate.

Where can you find the best CD rates in 2011?

Your best bet is with either online banks – as they can offer slightly higher rates due to their lack of overhead costs that traditional brick and mortar institutions have – or local credit unions. Credit Unions can sometime offer higher CD rates (and better bank rates in general) because they don’t have a board of directors breathing down their necks demanding higher profit margins. Credit Unions are generally not-for-profit institutions which are owned by their members and any profits derived from business are passed along back to their members in the form of higher savings rates and lower loan rates.

Top 10 CD Rates Available (April 2011):

(Please keep in mind interest rates are time sensitive in nature. If this article is outdated, refer to our CD rate database to find the best local and nationally available CD rates.)

1) PEF Federal Credit Union (Ohio) has a 60 month CD rate yielding 3.29% APY with a minimum deposit of just $500 required.

2) Domino Federal Credit Union (Texas) has a 60 month CD rate yielding 3.257% APY with a minimum deposit of just $500 required.

3) Liberty Bank (Florida) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of $10,000 required.

4) Premier Community Credit Union (California) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of $1000 required.

5) Signature Bank (New York) has a 60 month CD rate yielding 3.01% APY with a minimum deposit of $5000 required.

6) Bank of Utica (New York) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of just $500 required.

7) SeaComm Federal Credit Union (New York) has a 60 month CD rate yielding 2.99% APY with a minimum deposit of $1000 required.

8 ) Liberty Bank (Illinois) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of $10,000 required.

9) American Savings Bank FSB (Ohio) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of just $500 required.

10) Citadel Federal Credit Union (Pennsylvania) has a 60 month CD rate yielding 3.00% APY with a minimum deposit of just $500 required.

The banks and credit unions we’ve listed above are regional institutions. Visit their individual website(s) to see if they have branches near you or if you can open a deposit product over the phone or online.

Do you know of a better CD rate offered through your local bank or credit union that we haven’t mentioned? If so, please share by leaving a comment!

Capital One Branch Locations: The largest number of locations are in New York, followed by NJ, LA, MD, Washington DC, VA, and TX.

Products: Capital One is the fourth largest issuer of Visa and Mastercard credit cards with roughly 37 million accounts in the US. Even though their bank CDs are completely un-enticing, their credit cards are still widely popular as they specialize in rewards programs involving travel, merchandise and cash back.

In 2010 Capital One reported $16.1 billion in revenue and $2.4 billion in net income.

Today’s Capital One CD Rates in NY:

(Rates accurate as of April 2011. Visit CapitalOne.com for updated rates and information.)

- 5 year CD yielding 2.30% APY with a minimum deposit of $5,000 required.

- 3 year CD yielding 1.10% APY with a minimum deposit of $5,000 required.

- 30 month CD yielding 0.75% APY with a minimum deposit of $5,000 required.

- 2 year CD yielding 0.74% APY with a minimum deposit of $5,000 required.

- 18 month CD yielding 0.75% APY with a minimum deposit of $5,000 required.

- 1 year CD yielding 0.50% APY with a minimum deposit of $5,000 required.

- 6 month CD yielding 0.25% APY with a minimum deposit of $5,000 required.

To put Capital One’s rates in perspective, the current national average for 6 month CDs and 12 month CDs sit at 0.56% APY and 0.86% APY respectively.

Currently, Metropolitan National Bank is offering anyone a 1 year CD with an APY of 1.35% and a minimum deposit requirement of just $1,000. Their interest rates are non-compounding (“simple interest”) and assume you will keep your deposit within the account until it matures. If you need the money before the term is up, an early withdrawal penalty will be imposed. Also, keep in mind that if you would like to collect your deposit with it’s accrued interest at the date of maturity you’ll probably want to let them know well in advance otherwise they will automatically roll it into another 1 year CD and you’ll get dinged for the early withdrawal.

Metropolitan National Bank CD Rates:

(rates accurate as of 2/2011)

- 3 month CD yielding 0.25% APY with a minimum deposit of $1,000 required.

- 6 month CD yielding 1.15% APY with a minimum deposit of $1,000 required.

- 12 month CD yielding 1.35% APY with a minimum deposit of $1,000 required.

- 18 month CD yielding 1.45% APY with a minimum deposit of $1,000 required.

- 2 year CD yielding 1.60% APY with a minimum deposit of $1,000 required.

- 3 year CD yielding 1.90% APY with a minimum deposit of $1,000 required.

- 4 year CD yielding 2.05% APY with a minimum deposit of $1,000 required.

- 5 year CD yielding 2.35% APY with a minimum deposit of $1,000 required.

If you have opened one of Metropolitan National Bank’s CDs before please share your experience by leaving a comment below!

And although MCU is a credit union, they don’t place many obstacles in the way for joining as most credit unions do.  Becomming a member and then setting up a CD account is fairly easy.

You’ll need:

1. Driver’s license for yourself and each joint owner. Birth certificates or school IDs are permissible for EZKidz child account owners.
2. Social security number for yourself and each joint owner
3. Name, address, date of birth, and social security number of any beneficiaries

There is also a $1.00 membership fee and a $25.00 minimum opening deposit required.

Complete List of CD Rates Offerd Through Melrose Credit Union (Share and IRA CDs):

Terms and Conditions;

An early withdrawal penalty applies to all Share Certificate Accounts. All new share certificate purchases and renewals will compound dividends quarterly. The interest rate will be determined in the same manner as other share certificates, however due to the compounding there will be an APY on share certificates which is different than the rate. Please note that members will still have the option of having their quarterly dividend transferred to another share account. The minimum purchase for Share Certificates is $5,000. The minimum purchase for IRA Share Certificates is $4,000. Visit Melrose Credit Union for further info.

If you are eligible to join CFCU Community Credit Union, below is information on their spectacular 10 month CD rates…

- 10 month CD yielding 1.51% APY on deposits between $500 and $24,999.

- 10 month CD yielding 1.64% APY on deposits between $25k and $99,999.

- 10 month (JUMBO) CD yielding 2.02% APY on deposits greater than $100k.

NCAU insurance (FDIC equivelent for credit unions) is provided on deposits up to $250k.

The national average for 12 month CD rates sits at just 1.00% APY.

Compare this with other CD rates in New York.

BankVibe.com

Marathon National Bank of New York was founded in 1989 to serve the financial needs of local consumers and business owners in the greater New York Metropolitan area. The bank’s principal belief was that it’s ability to provide high quality customer service would be the key factor in retaining and growing a solid customer base. For almost two decades, this full service commercial bank has been dedicated to the ideal of providing creative financial solutions and unparalleled personal service to its customers.

Marathon banks other certificate of deposit offerings are fairly lack luster. The only decent CD rate they have (when compared to the national average) is there 3 month product. Their longer term deposits aren’t even noteworthy.

Complete List of CD rates offered through Marathon Bank:

Like all bank rates, these are time-sensitive in nature and may change without notice. Please refer to the date of this article for accuracy. You may view Marathon Bank’s current CD rates here.

Compare these rates to other CD rates in New York.

About TD Bank:

TD Bank claims to be America’s most convenient bank (so much so that they’ve actually trademarked the term “America’s most convenient bank”). They are one of the 15 largest banks in the United States with $160 billion in assets, and provides customers with a full range of financial products and services at more than 1,100 retail stores throughout the Northeast, Mid-Atlantic, Metro D.C. and Florida.

Company History:

The company first opened its doors as Portland Savings Bank in Portland, Maine, in 1852, and later grew through a series of mergers and became Peoples Heritage Bank in 1983. At the turn of the millennium, the opportunity for growth presented itself again as Peoples Heritage Bank, through several acquisitions, expanded deeper into New England and took the name Banknorth.

Meanwhile, Cherry Hill, New Jersey-based Commerce Bank was turning Customers into Fans as America’s Most Convenient Bank. Founded in 1973, Commerce Bank expanded rapidly over the next 30 years into metro New York and Philadelphia, Washington D.C., and South Florida, winning new Customers with WOW! service and convenience.

In 2004, Banknorth caught the eye of TD Bank Financial Group of Toronto, Canada, a top 10 financial services company in North America. TD Bank Financial Group soon became Banknorth’s majority shareholder and the company became known as TD Banknorth. TD Bank Financial Group completed its purchase of TD Banknorth in 2007.

Looking to expand further in the U.S., TD Bank Financial Group acquired Commerce Bank on March 31, 2008, and the company rebranded as TD Bank, America’s Most Convenient Bank. TD Banknorth locations followed suit in September 2009, completing the merger of the two companies and uniting them under the TD Bank brand name.

Today, TD Bank, America’s Most Convenient Bank, remains focused on delivering award-winning Customer service and hassle-free products to Customers from Maine to Florida.

Current CD Rates offered by TD Bank:

Basic CD’s

- 9 month CD yielding 0.65% APY with a minimum deposit of $250 required. The current national average for 6 month CDs sits at roughly 0.78% APY (to put this offer in perspective).

- Other terms available, contact a local rep for current rates.

No Catch CD’s

- 6 month CD yielding 0.45% APY with a minimum deposit of $250 required and one penalty-free withdrawal allowed.

- 12 month CD yielding 0.40% APY with a minimum deposit of $250 required and one penalty-free withdrawal allowed.

Step Rate CD’s

- 3 year CD yielding 1.47% APY. Year 1 yields 0.90% APY, year 2 yeilds 1.24% APY and year 3 yields 2.24% APY.

- 5 year CD yielding 1.80% APY. Year 1 yields 0.75% APY, year 2 yeilds 1.00% APY, year 3 yields 1.74% APY, year 4 yields 2.23% APY and year 5 yields 3.20% APY.

* For the Step Rate CD the annual percentage yield is a Composite APY. The APY assumes each stated interest rate will be in effect for the length of time identified (one (1) year period).

TD Bank has locations in Connecticut, Washington D.C., New Jersey, New York, New Hampshire, Florida, Massachussetts, Maryland, Maine, Pennsylvania, Vermont and Virginia.

Also check out: TD Bank’s Checking Account Bonus

America Airlines Credit Union (Jamaica, New York) CD Rates:

- 12 month CD yielding 1.81% APY with a minimum deposit of $1,000 required and 1.91% APY with a minimum deposit of $10,000 required.

- 24 month CD yielding 1.91% APY with a minimum deposit of $1,000 required and 2.02% APY with a minimum deposit of $10,000 required.

- 30 month CD yielding 2.32% APY with a minimum deposit of $1,000 required and 2.42% APY with a minimum deposit of $10,000 required.

- 36 month CD yielding 2.52% APY with a minimum deposit of $1,000 required and 2.63% APY with a minimum deposit of $10,000 required.

- 48 month CD yielding 2.98% APY with a minimum deposit of $1,000 required and 3.14% APY with a minimum deposit of $10,000 required.

- 60 month CD yielding 3.14% APY with a minimum deposit of $1,000 required and 3.39% APY with a minimum deposit of $10,000 required.

Before you get too excited about these rates (particularly their 12 month CD rates) understand that AACU is a fairly difficult credit union to join. If you dont have family members who work for -or are retired from- AA or related organizations such as TSA, FAA, etc., then you may be tough out of luck. So for those New York residents who don’t qualify here are some other valuable options…

Best 12 month CD rates available to New York residents:

- CCSE Federal Credit Union (out of Salamanca, New York) has a 12 month CD yielding 1.764% APY with a $1,000 minimum deposit required.

- CFCU Community Credit Union (out of Ithica, New York) has a 12 month CD yielding 1.76% APY with a $500 minimum deposit required.

- Atlas Bank (out of Brooklyn, New York) has a 12 month CD yielding 1.66% APY with a $2,500 minimum deposit required.

Like all bank rates, these are time sensitve in nature so please refer to the date of this article for accuracy. You may want to scroll through our archive of New York CD Rates to look for more offers available in your area.