For those worried about inflation forcing rates up, this seems like it could reduce the risk. I haven’t reviewed the small print and the 10-year Treasury rates to see exactly how the rate bump works and the likelihood that it will be a worthwhile feature. The current yield of 4.30% APY is very competitive even without any rate bump feature.

FirstFedDirect is an internet division of First Federal Bank of California. The online bank serves customers in all states other than California. For those in California, you have to bank with First Federal Bank of California, and fortunately, they are also offering this same 9-month CD special.

The bank is another California bank that has been hit hard by the mortgage mess. It’s now down to the lowest rating of 1 star based on 3/31/08 data. However, BauerFinancial gives it a higher rating of 3 stars (adequate). This is also based on 3/31/08 data. As a result, it’s best to keep below the FDIC limits.

BankUnited’s Online Savings Account

BankUnited is still offering its high yield online savings account. The account used to be one of the rate leaders, but in the last few months it has fallen way behind. The current yield is 3.00% APY. BankUnited finally added an ACH transfer system to this savings account, but with the low rate and the customer service problems that many readers have noted, it’s still not a good deal.

BankUnited’s Financial Health

BankUnited has been hit hard by the mortgage problems. In the latest news, BankUnited is looking for alternative sources of capital. Its non-performing loans have been growing. On May 31st, 6.52% of its loans were non-performing. Share price is way down. Yesterday it closed at 73 cents. It was over $20 a share in 2007. Bankrate.com’s latest ratings is a 1 star based on 3/31/08 data which is down from 3 stars on 12/31/07 data. BauerFinancial gives it 3 stars (adequate) based on 3/31/08 data.

BankUnited is FDIC insured.

It has been awhile since Mutual Bank has offered decent CD rates. There were several times last year when Mutual Bank had several very competitive CD specials.

CDs can be opened by mail from any state. In addition to opening the CD by mail, you can also open the CD at one of Mutual Bank’s branches. Branches are located in the Chicago metro area; in Staten Island, New York; Edison, New Jersey; and Houston, Texas.

Mutual Bank’s rating is currently at 2 out of 5 stars (below peer group). The bank is FDIC insured Please see this post to see ways to be FDIC insured for balances over $100K.

Some banks are already responding. While average CD rates have been relatively flat in April, a handful of banks offering high-yield CDs — such as Capital One Financial Corp, Advanta Bank and E*Trade Financial Corp. — have recently bumped up yields on some of their CDs stretching out three to five years.

KeyDirect recently raised rates on its longer-term CDs by 0.25 percentage point to 4.75% and 5% for its 60- and 84-month CDs, respectively. GMAC Bank raised the rates last week on its four- and five-year CDs to 4.35% from 4% and 4.15%, respectively. Bank of America has also increased rates on a variety of CDs stretching out as many as 47 months.

Some banks are also raising some of their short-term CD rates. Earlier this month, for example, ING Direct raised the rates on its six-, nine- and 12-month CDs to 3.3%, from 2.75%, 2.5% and 2.5%, respectively. Meanwhile, IndyMac Bank is offering special one-year CDs online with a yield of 4.15%.