promotional cds

Want Better CD Rates? Consider Promotional CDs and Community Financial Institutions


20 November,2012

One of the difficulties that many savers face right now is that of a low interest rate environment. Interest rates are quite low right now, and they are likely to remain relatively low for quite some time. As a result, even CDs aren’t paying the same type of rates you could expect before the Fed Funds Rate started being slashed.

If you are hoping for slightly better rates, there are options out there — although you still won’t see anything really spectacular in terms of rates.

Promotional CDs

In some cases, you can see some help from promotional CDs. These are CDs that come with higher yields for a short period of time. The CIT Achiever CD, which is good for a year, is one such product. In some cases, you might be able to get a better rate on a three or six month CD than you would on a one or two year CD, just because of a promotion.

You do have to watch out for these promotional CDs, though. In many cases, you have to open an account in a specific period of time, and there might be other restrictions. You need to double check your situation and the terms of the CD, in order to determine what is likely to work best for you. In some cases, this can be an option for you if you are set on finding slightly higher rates.

Community Financial Institutions

Another option is that you can look into a community financial institution. These smaller institutions, usually credit unions or small community banks, often offer higher yields as a way to draw depositors. Shop around in your town to find out what’s available. While there are plenty of online financial institutions that offer competitive rates, you might be surprised at what is available in your own home town. Don’t forget to check around with local credit unions and small banks before you commit to a CD.

Be aware, though, that you might have to meet certain requirements in order to join a credit union. Credit unions of specific requirements, and if you don’t meet them, you won’t be able to open a CD — no matter how competitive the rate.

Don’t Expect Too Much

Even with the highest rates available, you can’t expect too much from what passes as a high yield CD these days. Even jumbo CDs aren’t offering particularly high rates. In many cases, you will be luck to find a CD that offers 1.90% — and you’ll probably have to agree to lock away your money for five years or more. Before you decide on getting a CD, you will need to make sure that you are ok with the terms that provide you access to higher rates, since early withdrawal penalties can be quite onerous.

If you are looking for a safe place to park your cash, a high yield CD can be a reasonable choice. You can keep trying for promotional CDs and those from smaller institutions, regularly opening accounts and getting the best possible rate, until things change and rates begin rising.