Savers may want to lock in high interest rates for the long haul before they likely head lower later this year.
But is 100 years too long?
Concord, New Hampshire-based Walden Mutual Bank is finding out. The financial institution is offering a 100-year Local Impact Certificate of Deposit paying a fixed 4.75% annual interest rate.
The CD is open to anyone with $1,000 and up to $150,000 to invest and is Federal Deposit Insurance Corp. insured up to $250,000. The CD allows people to invest alongside Walden to support local agriculture, specifically lending to food and agriculture businesses in New England and New York, the bank said.
“A five-year CD is common, a 10-year CD is a rarity, and a 100-year CD is one-of-a-kind,” said Mary Grace Roske, spokeswoman at CD rates comparison site CDValet.com. “Walden Mutual has created a unique opportunity for people who want to align their values – environmental responsibility, in this case – and their savings, and it’s a creative spin on socially responsible investing.”
What is the 100-year CD?
Here are the details:
◾ Minimum investment of $1,000 up to $150,000 per individual or organization.
◾ Fixed 4.75% APY for the 100-year life of the CD.
◾ FDIC insurance up to $250,000.
◾ A completed beneficiary form is mandatory at account opening.
◾ You may withdraw your entire deposit at any time by request, subject to a penalty of 10 years' interest. If you withdraw the CD before 10 years, the penalty will reduce the principal value of the CD.
◾ Interest paid can be withdrawn penalty-free at any time, automatically or by request. In approximately 15 years, more than half of your deposit will be interest, which is withdrawable on demand, and penalty-free. For example, if you purchased a CD for $1,000 and withdrew it after 20 years, you would receive $1,942, or an effective interest rate of 3.32%. ◾ Partial withdrawal of principal is not permitted.
◾ It isn’t callable by the bank, meaning only the holder can redeem the bond early.
What is Walden Mutual Bank?
Walden is a mutual savings bank and a certified B-corporation, or a for-profit corporation certified with a social impact. Walden’s focused on serving farms, food businesses, sustainability-related businesses and nonprofit organizations, according to CDValet.com.
It’s a mutual bank, meaning it has no shareholders and it’s owned by its depositors, Walden said.
Walden was founded in 2022 as “an online bank for everyone who eats/makes/grows/cooks/loves local food,” its 2022 annual report said.
Chief executive Charley Cummings combines a business degree with an agricultural background, having started a meat Community Supported Agriculture that allows consumers to buy shares of a farm's harvest in advance.