Bread Savings™ Offers Competitive FDIC-Insured CDs with High Yields
Bread Savings™, a division of Bread Financial, offers competitive certificates of deposit (CDs) with terms ranging from three months to five years. The CDs feature some of the highest annual percentage yields (APYs) available in the online banking sector, with the top rate currently at 4.40% APY for a six-month term. Minimum deposits start at $1,500, slightly above the typical $1,000 minimum found with many other online banks.
The product portfolio caters to various investment horizons, offering fixed interest rates that do not change over the term of the CD. Bread Savings™ provides a diverse range of CD durations, including uncommon short-term offerings like a three-month CD. This flexibility supports investment strategies such as laddering to optimize returns.
Federal Deposit Insurance Corporation (FDIC) insurance protects deposits up to the standard $250,000 limit per depositor and account ownership type, through Comenity Capital Bank—Bread Financial's affiliated Utah-chartered bank. This protection is standard across insured banking products and is an important safeguard for investors.
Early withdrawal penalties from Bread Savings™ CDs are tiered based on the term length, with penalties ranging from 90 days' interest for terms under one year, to as much as one year's interest for CDs with terms of four years or longer. These penalties are on the higher side relative to some competitors and are a key consideration for liquidity needs.
No additional fees are imposed on these CDs, and there is a 10-day grace period following maturity to withdraw funds without automatic renewal or penalty. Account types include single, joint, custodial, trust, and IRA CDs, allowing a range of ownership and estate planning structures.
Interest compounds over the CD term, with options to receive interest payments deposited externally to another account. Given the rates and fixed yields, Bread Savings™ CDs may be particularly attractive in a declining rate environment to lock in current returns.
The transparency regarding terms, penalties, and FDIC insurance, along with competitive yields and a broad term selection, positions Bread Savings™ as a noteworthy option within the digital banking CD product marketplace. However, potential clients should weigh the relatively high minimum deposit and early withdrawal fees against their individual financial strategy and liquidity requirements.
Investors should also consider that APY rates are subject to change and periodically review offerings to align with current market conditions. The bank adheres to regulatory standards and ensures accurate, timely communication of all terms, contributing to an informed decision-making process for depositors.