Flagstar Bank, headquartered in Troy, Michigan, is the 74th largest bank in the US by asset size, with just over $26 billion in total assets.

Within their suite of deposit products they offer both fixed-rate certificates of deposit and variable-rate accounts such as money market accounts, savings accounts and checking accounts.

While their variable rates accounts come with yields that are less competitive than the national average, they offer two promotional fixed-rate CDs with exceptional APYs.

In our review below, we will focus on the certificates of deposit offered by Flagstar Bank. They currently have eight standard term CDs with unattractive yields and two promotional CDs with attractive yields.

Flagstar Bank CD Rates + Account Details

Flagstar Bank is a member of the FDIC. Consumer deposits are federally insured up to $250,000 or $500,000 for joint accounts.

Flagstar Bank CDs come with a minimum deposit requirement of $500. If you plan on depositing more than $110,000 into a CD you will need to visit a local branch. You can locate one here.

Flagstar Bank Standard Term CD Rates

To put these offers in perspective, the current national average for a 12 month CD and a 60 month CD sit at 0.22% APY and 0.46% APY, respectively.

Flagstar Bank also has two certificate of deposit promotions available for new money coming into the bank. This can either be for individuals who have a Flagstar account but are using outside funds to open the promotional deposit OR new customers to the bank entirely. The annual percentage yields for these promotions are listed below.

Flagstar Bank Promotional CD Rates

When navigating Flagstar Bank’s CD page, you’ll immediately be requested for you zip code so that Flagstar can provide you with “accounts rates and special offers in your area;” however we ran the scenario for three separate locations (10001 New York City, 60007 Chicago, and 94016 San Francisco) and saw the same CD rates and promotional offers available in these regions.

It should also be noted that all of the variable rate accounts (savings, checking and money market) are not available in any of the three locations we sampled as well.

How Does Flagstar Bank Calculate Interest

Unlike most bank CDs which compound rates daily and credit them monthly, Flagstar bank both compounds rates and credits interest on a monthly basis. This means that the APY you receive will be closer to the actual interest rate and your savings will grow at a slower pace than it would with more frequent compounding schedules.

Grace Period

Flagstar Bank has a standard 10 day grace period in which you can add or withdraw funds from your certificate of deposit without penalty. If nothing is done during this time, the funds will automatically renew into the same deposit term with the current APY at that time. If you originally opened a 13 month promotional CD, your funds will renew into a 12 month standard deposit, and if you opened the 49 month promotional CD your funds will renew into a 48 month standard deposit.

Early Withdrawal Penalties

If you need access to your funds outside of the grace period, Flagstar Bank will impose an early withdrawal penalty.

Early withdrawal penalties are determined by the term length of your CD. Early withdrawal penalties are as follows:

Be sure to set up your own reminders to alert you when your grace period starts. Flagstar Bank will also send out notifications to let you know your CD will be maturing soon.

Final Thoughts

Outside of Flagstar Bank’s two promotional CDs, their suite of certificates of deposit are fairly lackluster. Most terms come with the same APY of 0.10%, which does not keep up with the national average for any of the respective terms.

Before you commit to a CD at Flagstar Bank be sure to review the top yields from both online banks and nationally available credit unions.