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Third Federal offers an astonishing array of CD products, with terms as low as seven days to as high as 72 months. Its "Standard" CDs (shown below) don't have noteworthy APYs, but its "Special" CD terms have fairly competitive rates, though you might need to put down a minimum deposit of $50,000 or $100,000 to snag one.
If you're contemplating a Third Federal CD, read on to learn whether they're worth your attention.
APY = Annual Percentage Yield
3 Mo. APY | 6 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 30 Mo. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY | 6 Yr. APY |
---|---|---|---|---|---|---|---|---|---|
3.00% | 3.00% | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% |
For paying out the most interest on your savings, Third Federal ranks among some of the top CD providers for some of its short-term special CD products. But if you have a longer term in mind (like 18 months), it pays to shop around and compare rates. For perspective, here's how Third Federal CDs stack up against other banks.
Bank & CD Offer | APY | Term | Min. Deposit | Next Steps |
---|---|---|---|---|
Member FDIC.
| APY: 4.70% | Term: 1 Year | Min. Deposit: $2,500 | |
APY: 5.05% | Term: 1 Year | Min. Deposit: $1 | ||
APY: 5.15% | Term: 9 Months | Min. Deposit: $1 | ||
Member FDIC.
| APY: 4.75% | Term: 1 Year | Min. Deposit: $500 |
Third Federal offers four types of certificates of deposit (CDs): Standard, Special, Retirement, and Bonus.
Of these four, the Standard and Special products follow the traditional structure of a CD, which we'll elaborate below. Its Retirement CDs, however, are a bit different. Some have decent APYs and low minimum deposits ($100), but you'll hold them in a retirement account, like an IRA, SEP, or Keogh plan. This could give you certain tax advantages, but it might also restrict how much you can withdraw. What's more, these CDs cannot be opened online; you have to go into a Third Federal brick-and-mortar branch to start the process.
Third Federal Bonus CDs are essentially step-up CDs, except, in this case, they're more like step-down CDs. In your first year, you'll earn a competitive APY of 5.25%. Starting in the second year, however, the APY will drop to and remain at 3.50% for the remainder of your term.
As for its traditional CDs, let's take a closer look at what these products have to offer.
We won't sugarcoat it. There's really no good reason to open a Standard CD through Third Federal. In comparison to today's top-paying CDs, these CDs have such low APYs, you'd be losing money by opening one. True, the minimum opening deposit isn't high ($500). But you can find CDs with higher yields and even lower minimum deposits at other banks, credit unions, and financial institutions.
To add insult to injury, CDs with terms less than 179 days don't have compound interest. In other words, your APY will apply to your principal only and never to the interest you've already earned. This differs remarkably from most CDs, which generally earn compound interest.
Third Federal Special CDs have high APYs and short terms, like seven days and five months. The minimum opening deposit starts at $500, but for the highest APYs, you'll need a minimum deposit of $50,000 or $100,000. That's a high bar to hurdle, especially when other CD providers -- like those on Raisin -- have comparable APYs, but lower minimums.
That said, Third Federal does offer an 11-month Special CD with a very competitive APY and a minimum deposit of $500. That's more reasonable, though you can certainly find CDs of the same term with APYs that are slightly higher. Check Third Federal's website for available Special CD rates, terms, and minimum deposit amounts.
If Standard or Special CDs don't interest you, Third Federal also offers the following CD accounts:
A Third Federal Special CD might be well suited to those with more than $50,000 who want to earn high interest on their savings for a short term. Because of their low APYs, however, we can't in good conscience recommend Third Federal Standard CDs, which are currently offering APYs far below today's most competitive rates.
APY = Annual Percentage Yield
At The Motley Fool Ascent, certificates of deposit (CDs) are rated on a scale of one to five stars, primarily focusing on annual percentage yield (APY) and early withdrawal penalty fees. Our highest-rated CDs generally include competitive APYs without complex qualification tiers, low withdrawal fees, reliable brand trust and reputation, and ease of use.
Learn more about how The Motley Fool Ascent rates bank accounts.
Yes, Third Federal is a real bank. It has headquarters in Cleveland, Ohio, with 28 branches in Ohio and 16 in Florida.
Yes, the penalty is a loss of interest, whether you earned it or not. The penalty is based on the length of your CD term and is calculated as follows:
If you're opening your CD online, the maximum electronic deposit you can make is $250,000. For those who already have a Third Federal account (such as a checking account) or who are funding with a check, the maximum deposit is $500,000.
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