Opened our third CD in our emergency fund CD ladder

December 26th, 2008 · 2 Comments

Yesterday (yes, on Christmas day) I applied for and hopefully opened the third of our CDs in our emergency fund CD ladder. This is the first time I’ve tried to open a CD at FNBO Direct and I’ve got to say, I’m not impressed at all with the process.  Worse than that actually, I’m now motivated to find somewhere else to do my future banking.

The problem with FNBO Direct is that they make you apply anew, like you were a brand new customer, for each new product/account you want to have with them.  I don’t understand this as they have all my contact and ID info in electronic format from my existing savings account relationship.  Why do I have to fill out the same form and provide the same info over again?  This is doubly absurd given that you can’t even GET to the CD application form unless you’re already logged in to your savings account!  If you’re not logged in, the CD product page simply states “Once your Online Savings account is opened, you can sign up for additional products to help you build your savings faster.”  And this is all before they ask where the money to fund the CD is coming from, so it’s not like they can claim you only need to do it if you’re funding with an external account.

Okay, I think to myself, I’ll get over having to apply again.   But then there are the problems filling out and submitting the form.  The form is so absurdly sensitive to the values you enter; to the point where it wouldn’t allow me to tell the truth.  I kept trying to submit the form but the application page kept insisting “Dates must be entered in MM/DD/YYYY format.”  (Here is a hint to future web-app designers: it sure does help if you tell users which field has an invalid value!)  Eventually, through numerous trial and error attempts to reset date values throughout the form, I discovered that the ID expiration date field on the form considers a year value of 2014 to be an invalid year.  But the ID I wanted to provide really does have an expiration date in 2014!  Finally, I gave up and just told FNBO Direct that the ID expires in 2010.

The next annoyance came when it was time to specify how to fund the new CD account.   The FNBO Direct application process makes you type out the account number of an existing FNBO Direct savings account rather than presenting you with a drop-down list of accounts you’ve already got with them.  Excuse me?  Remember, I said you had to be logged in to even get to the application?  Why can’t they list my existing accounts here?!?  Worse, it turns out that they don’t list your full account number ANYWHERE on their site, even when you’re logged into the details of your existing savings account!   So I had to resort to looking it up from my own written notes.

The final indignity came when the application process told me it would take 2-business-days to approve my account.  Huh?  I’m opening a CD with money you’re already holding in my savings account and you know who I am because I’m logged in to your website!   I don’t even know, at this point, whether my CD will be opened or not and it looks like I may have to wait 4 calendar days to find out.  This terrible experience has pushed me into being very serious about looking elsewhere for the 4th and latter CDs in our CD ladder.

By the way, as I talked about last month at this time, the plan for this month was to start surveying the rate landscape a few days in advance so that we were properly prepared to open a 6-month CD with the best rate we could reasonably get.  I’d been doing this by checking up on the page of 6-month CD rates and sorting by APY rates.  Unfortunately, what this has mostly shown me is that (a) rates have been dropping everywhere lately, and (b) this page isn’t always accurate.  As an example of both of these points, consider Stonebridge Bank of Exton, PA (which, as of my last check on Dec 25th, listed the highest APY for a bank with greater than a 1-star rating.)  At, Stonebridge is listed as offering a 3.25% APY (validated on Dec 18th) but the bank’s own current rates page shows the rate at 2.75% APY as of December, 25th.  As another example, I discovered that neither ING Direct nor FNBO Direct were even listed on the page, even though both would have placed in the list by their current APYs.  FNBO Direct would even have been 7th on the list!   I ended up explicitly visiting all the financial institutions with which we have an existing relationship to check their 6-month CD rates.  When all was said and done, I concluded FNBO Direct’s 3.01% APY was a reasonable trade-off between APY and the rating of the financial insitution.  (It would have been the highest 4-star APY if it had been included on the page.)  But like I said above, I’m not sure I’ll think the same thing next time.

Tags: Personal Finance · Savings

2 responses so far ↓

  1. 1 davmp // 2009.01.03 at 7:54 am

    I now feel like an idiot. 🙁 I had forgotten to check our local credit union when surveying 6-month CD rates. I was just there looking for data to do my end-of-year financial wrap-up and noticed that their APY for a 6-month CD, since Dec 1 2008, is 3.39%!!! That rate is higher than what we got at FNBO. And it would place second on’s list of 6-month CDs as of today. I absolutely need to remember to check their rate when we open our fourth CD in January.

  2. 2 davmp // 2009.01.03 at 7:58 am

    Oh, and our application for the CD at FNBO Direct was approved on the following Tuesday — five calendar days later. I guess they didn’t count the Friday after Christmas as a business day? Annoyingly, they treated the start date as December 26th instead of the date I applied, which was the 25th. At least it got funded and opened though, so we’re getting a better rate on the money than current savings account rates.

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