USAA Bank offers three unique options when it comes to their certificates of deposit (CD). They offer accounts with fixed, adjustable, and variable interest rates. In other words, fixed means a fixed rate no matter what, adjustable means that there is a one-time rate adjustment option, and variable means that one can make additional deposits to the CD.
For the variable rate CD account one only needs a $250 minimum opening deposit, which is amazingly low considering that it is for a CD. However, it does also have its downsides. For instance, for a one year term it is 0.86% APY, whereas a fixed rate CD has an APY of 0.91%. Another downside is that there are only two term lengths available, 182 days and one year. An adjustable rate CD account offers four term lengths ranging from three years to seven years, with a much lower interest rate as opposed to a fixed rate CD account. Lastly, the fixed rate CD account offers term lengths ranging from a mere 30 days to seven years.
For the latter two CD accounts one must have a $1,000 minimum opening deposit, which is comparable to that of other major banks. Also, when it comes to the fixed rate CD account the interest rates are comparable to that of similar banks as well. Overall the degree of flexibility one has in choosing an account type is one of the major reasons why we rate USAA Bank’s CD accounts at above average.
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August 18, 2011 at 4:39 pm
Amen! As far as I know, Ally is the only bank that caps the withdrawal penalty on their cds. So for example, their 5 year cd withdrawal fee is only 2 months… meaning that if you have the cd for 14 months, you made 12 months at the much higher interest rate. USAA on the other hand takes a percentage and few months interest as well
August 18, 2011 at 8:27 am
It’s nice that customers have options, though I find that unless the CD APY is higher than 1.00%, it’s not worth it. There are many banks who offer a normal savings account with higher interest, no minimums, and no fees.