Quontic Bank CDs Review — High Yields & Low Minimums

If you have a decent amount of cash that you don’t anticipate needing right away, moving it from your savings account to a certificate of deposit (CD) could boost your return.

Thousands of banks and credit unions offer CDs, so finding the best CD for your needs can feel like an overwhelming task. Fortunately, one of the highest CD rates right now comes from Quontic Bank, a low-key, mostly online bank that offers industry-leading yields on savings accounts and CDs. 

Quontic Bank’s CD lineup has a lot of advantages: a solid range of term lengths, tremendous yields, and low minimums. But it does have some downsides, so don’t rush out to open one without considering the good and the bad.

Quontic Bank Certificates of Deposit: Terms & Yields

Quontic Bank offers five CDs with terms ranging from six months to five years. Each has a yield well above the national average for its term, with the six-month and one-year CDs leading the pack:

Term	Yield
Six months	5.05% APY
One year	5.15% APY
Two years	4.50% APY
Three years	4.40% APY
Five Years	4.30% APY

Unlike some online banks, Quontic doesn’t offer any no-penalty CDs. If you cash out your CD before maturity, you have to pay a stiff financial penalty that reduces your interest earnings and could even cut into your initial investment.

What Sets Quontic Bank CDs Apart?

Quontic Bank CDs stand out to would-be buyers in several ways, both good and bad:

• High yields. Quontic Bank’s CDs have some of the best yields on the market right now. Since yield is a critical consideration for most CD buyers, this is a big selling point.
• Low minimum deposit. All Quontic CDs require just $500 to open. That’s a lower minimum than many competing banks, which may demand $1,000, $2,000, or more for a new CD.
• Variety of term lengths. Quontic’s CD terms range from six months to five years, with three intermediate terms in between. That’s enough variety to build a multi-CD ladder and take advantage of changing interest rates.
• Stiff early withdrawal penalties. Quontic’s early withdrawal penalties are well above average, which is a bad thing. They range up to 24 months’ interest on longer-term CDs and are calculated in such a way as to result in principal loss if you withdraw very early in the term.
• Requires a phone call to cash out or make changes. Like most banks, Quontic automatically renews maturing CDs. Unlike most banks, it requires you to call its customer service department if you want to cash out or make changes at maturity (such as deposit more money or change the term length).

Key Features of Quontic Bank CDs

Before you apply for a Quontic Bank CD, make sure you understand how they work and how they differ from some other banks’ CDs.

FDIC Insurance

All Quontic Bank CDs carry FDIC insurance up to the statutory limit, currently $250,000. This limit applies cumulatively to all Quontic CDs held in your name.

How to Open & Fund a New CD

You can open a new Quontic CD online. The application process is all-digital and takes just a few minutes.

Once open, you can fund your Quontic CD via:

• Instant transfer from an existing Quontic checking or savings account
• Electronic transfer from an external bank account, which can take one to three business days

How Interest Is Calculated & Credited

Quontic compounds your interest payments daily. Each month, Quontic adds all the interest earned in the previous month to your CD’s balance. If you prefer, you can have the interest deposited in a separate bank account.

Early Withdrawal Penalties

All Quontic CDs come with early withdrawal penalties. You can’t make partial withdrawals under any circumstances, and if you close your CD before the term ends so that you can withdraw your entire investment, you have to pay a significant financial penalty.

The penalty depends on the CD’s term:

• Under 12 months: All the interest you would have earned during the full term
• One to two years: One year’s interest
• Two years and longer: Two years’ interest

These penalties apply regardless of when you close the CD, which means they may result in some principal loss. For example, because the six-month CD’s early withdrawal penalty is six months’ interest, any early withdrawal forces Quontic to take some principal on top of all the interest earned to date. 

CD Maturity & Renewal

Quontic CDs automatically renew at maturity. The CD term remains the same, and the new principal is the original CD’s principal plus any accrued interest you haven’t already withdrawn.

Closing or Making Changes to a Maturing CD

You have a 10-day grace period to close or make changes to a maturing CD. The grace period begins on the day after the maturity date.

If you do nothing during the grace period, the CD automatically renews. If you want to close the CD and withdraw your investment without penalty, or you want to make changes like depositing additional funds or changing the CD’s term, you need to call Quontic Bank and give your instructions. You can’t close your CD or make other changes online.

Pros & Cons

Quontic Bank CDs have some upsides and some downsides. Here they are at a glance.

Advantages

Quontic Bank’s CDs offer excellent yields, a low minimum deposit, straightforward opening process, and an attractive range of terms.

• Industry-leading yields. Quontic Bank CDs have uniformly excellent yields ranging from 4.30% APY at the low end to 5.15% APY at the high end. They’re all well above average for the corresponding term length.
• Terms range from six months to five years. Quontic’s CDs range from six months to five years. Six months qualifies as short-term, while five years is definitely long-term (though not the longest term available). That’s more than enough of a range to build a multi-CD ladder. 
• Low minimum deposit for all terms. You need just $500 to open a Quontic Bank CD. That’s a far lower minimum deposit than some other banks require.
• Easy to open and fund. You can open a Quontic Bank CD online in just a few minutes. If you have an existing Quontic Bank account, you can fund your new CD immediately, or wait a business day or two for an external transfer.

Disadvantages

Quontic Bank’s CDs fall short in a couple areas: stiff early withdrawal penalties and an inconvenient process for redeeming or changing maturing CDs. 

• Very high early withdrawal penalties. Quontic Bank’s early withdrawal penalties are well above average by industry standards. On the six-month and one-year CDs, they’re so tough that you’re certain to lose some principal if you cash out early.
• Confusing, inconvenient process to redeem or change maturing CDs. You need to call Quontic Bank to cash out or make changes to maturing CDs. That’s inconvenient and conflicts with Quontic’s otherwise all-digital approach to banking. 

How Quontic Bank CDs Stack Up

Quontic Bank isn’t the only online bank that offers high-yield CDs. Before you open a CD with Quontic, see how its lineup and terms compare with another popular choice: Discover Bank.

	Quontic Bank	Discover Bank
Term Lengths	Six months to five years	Three months to 10 years
Yields	Up to 5.15% APY	Up to 4.75% APY
Minimum Deposit	$500	$2,500
Penalties	Up to 24 months’ interest	Up to 24 months’ interest
Renewal	Automatic	Automatic
Close or Change	Must call in	Can do online

Overall, Quontic Bank is a better choice if you don’t have a lot of cash to invest in a CD and you’re seeking the highest possible interest rates. Discover makes more sense if you want a very short or very long CD term or if you don’t ever want to deal with a human at the bank.

Final Word

Quontic Bank offers excellent CD yields across a relatively wide range of terms. Its minimum opening deposit is low and the process for opening and funding a CD is super-easy.

That doesn’t mean Quontic Bank is the perfect source for all your CD needs. It has stiff early withdrawal penalties and an annoying process for cashing out or changing maturing CDs.

With so many other choices out there, you might decide Quontic’s drawbacks outweigh its advantages. Or you might not. All in all, I’d say there’s more to like about Quontic than not, but it’s not perfect for everyone.