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What is a Triple Option CD?

When I read a Bank Deals’s article [3] about a “triple option CD” from Southern State Bank in Arkansas, I was perplexed. I thought I knew what all the various certificate of deposit types were whenever I wrote that Certificate of Deposit Zoo [4] post… but I was wrong.

What is a triple option CD? A triple option CD is a CD that combines the features of a bump up CD with a no-penalty CD. For those enjoying the zoo analogy, the triple option CD is a modern day Chimera. With a triple option you can usually:

  1. Make another deposit into the CD,
  2. Increase your rate once during the original CD’s term,
  3. Withdraw part of the CD under certain circumstances.

The specifics of the CD will depend on the bank offering them. For example, some banks offering a triple option CD will only let you withdraw up to 50% of the original CD for a medical hardship. Some let you withdraw up to 50% for no reason whatsoever. Some let you make an additional deposit of up to 50% of the original deposit. The amounts will often change but the three features will remain the same.

Where does the triple option CD fit in with other CDs? Triple option CDs usually have a maturity term of thirty-six months and a higher minimum deposit than other CDs offered at the same bank. As for the interest rate, triple option CDs appear to have rates similar to standard 36 month CDs (I’d expect them to be slightly lower, reflecting the additional flexibility).

Do you have a triple option CD? Or does your bank offer one? I get the impression these aren’t very common now.