We were just forwarded a decent deal coming out of United Central Bank. Details below.
Thanks to BankVibe reader Trevor for sending it in!
Currently they have a 6 month CD yielding 2.0% APY with a minimum balance of $1,000. I know how unappealing a 2.0% APY savings rate can seem, however you must take into account the current deposit rate climate. Compare 6 month CD rates.
United Central Bank is located in Dallas, Texas and is expanding at a fairly rapid pace. They were founded in 1987 and originally only served the community of Dallas but have since expanded to all of Texas and as well as a few bordering states.
The rates associated with their CDs (certificate of deposits) get less competitive with a longer maturity. In fact, their 60 month CD is only yielding 0.90% more than the 6 month rate, (2.90% APY and 2.00% APY respectively).
Another counter-intuitive aspect of their CD rates is that you will actually receive a lower interest rate for opening a jumbo CD. If you were to open this same 6 month CD but deposit $250,000 or more into the account you will only get a return of 1.75% APY. Traditionally, banks and credit unions will reward larger deposits with higher rates, I guess United Central Bank takes a different approach.
If you are after a higher interest rate for a large deposit, then you should opt for their “Global Money Market” account. Depending on your balance amount, you will most likely stand to earn some decent returns.
Global Money Market Rates (United Central Bank):
$1,000,000 yields 3.00% APY
500k – 999k yields 2.40% APY
300k – 499L yields 2.25% APY
75k – 299k yields 2.15%
Anything balance below $75,000 yields 1.95% APY. As a comparison, the current national average for money market rates sits at roughly 1.20% APY.
This is definitely an attractive rate for a money market account, however, we would recommend also looking into a fixed rate deposit with a long maturity. Given the fact that interest rates as a whole are going to continue trending downward, locking in a fixed rate, FDIC-insured deposit may be a better route to take in order to hedge against future falling rates.