Credit, Investing 

*Expired* Emigrant Direct 5% “My Way” CD

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The rates listed on this post may be out of date.

Emigrant Direct has an interesting little product they’ve debuted recently called their “My Way” CD which is a certificate of deposit with a 5% APY (I put an updated list of the best cd rates). It’s “My Way” because you can specify the maturity date within an 18 month to 10 year window, thus making it a long or short term CD. There is a minimum deposit amount of a thousand dollars and you have to be a current Emigrant Direct account holder but it’s an interesting way of offering a CD.

Usually, the longer the terms, the higher the rate (in our current economic environment, with our economy going strong and the Fed consistently bumping rates up a quarter point). Comparably, Penfed‘s (Pentagon Federal Credit Union, where the most competitive CD rates usually appear) rates don’t break 5% until you read the 3 year maturity mark. (2 year is 4.75% APY, 3 year is 5.5% APY) so if you can get a 18 month CD at 5% APY then you’re getting a pretty good deal.

Some terms and conditions worth noting:

  1. The CD account will be automatically renewed but you will have ten calendar days to close the CD account after the renewal without penalty. Also, you’ll get written notice about the renewal 10-14 days beforehand, so there aren’t many reasons why the renewal would occur without your knowledge.
  2. Early withdrawal penalty is 180 days worth of interest, whether earned or not (that last part just means if you open it and close it a day later, you still pay 180 days worth of interest even though you’ve only had the CD for 1 day).
{ 9 comments, please add your thoughts now! }

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9 Responses to “*Expired* Emigrant Direct 5% “My Way” CD”

  1. Brian says:

    I still wouldn’t classify this offer as a good deal…why lock your money up for a year and a half for 5% when you can get a 12-month CD at 5.15% elsewhere?

  2. Jonathan says:

    That interest penalty is pretty harsh, given that you could actually lose 2.5% (half of 5%) of your principal if you cash out early. That’s about as bad as I’ve seen banks go. Not being able to choose if you want to renew or not ahead of time is also lame. That’s why I like PenFed – they have the most lenient penalties, and you can choose your exactly where you want your interest payments and principal to go at all times.

  3. CK says:

    Why lock up your money at all for an extra 1/2% (or possible .65%)? Maybe it’s my youth but I never really consider CDs. Liquidity has always been worth more to me then the measly spread between CD rates and savings accounts such as Emigrant.

  4. Brian says:

    CK, you’ll consider them when interest rates ever start to fall again. You’re correct, right now it makes little sense to lock down when savings and money market accounts are paying comparable rates and the Fed is still busy bumping up short-term rates.

  5. Cap says:

    guess I can’t sign up 😛

  6. Joe says:

    It’s true that there are better CD deals out there, such as countrywide’s 5.10% 12-month CD. As for issues of liquidity, I like the laddering approach, so that a CD is mature every 3 months (for me). Best of both worlds.

    Emigrant still seems to be the best MM account at 4.5%

  7. Mike says:

    The 5 percent seems to be a great deal for the long term. I don’t see the Fed hiking rates over 5.00% and if they go down over the next 10 years… then that 5% will look awefully nice. By then the savings accounts and their “liquidity” could be under 2 %.

  8. ON says:

    How can you be charged a penalty of 180 days interest for a CD opened for 1 day when you have 10 calendar days in which to close the CD without penalty ?

    • Mike says:

      You have 10 calendar days *after the CD has matured* to close the CD (which has auto-renewed) without penalty. A more likely situation would be opening a CD, then needing money for a car 3 months later. They’ll take the 3 months interest you earned, plus take the equivalent of 3 months interest from your principle. Most banks also reserve the right to refuse withdrawls, so (in theory) they could simply tell you “no.” Most banks also reserve the right to cancel your CD any time they want, so (with 30 days notice), they could close your CD at any time – paying you the interest without penalty, of course.

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