Promotional CD Rates: How They Work

Banks may offer promotional CD rates as their most competitive yields, but they aren't generally the best deals around.
Spencer Tierney
By Spencer Tierney 
Edited by Sara Clarke
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Some banks offer promotional CD rates alongside their standard rates. These rates tend to be the bank’s most competitive CD offerings, but they don’t last forever and aren’t always the best deals you can find, so compare CDs across several banks and credit unions before opening one. Here’s what to know.

» COMPARE: Best CD rates

What are promotional CD rates?

Promotional CD rates, or CD specials, may have the following features:

  • Higher rates on shorter terms (at the same bank). For example, a bank’s promotional rate for a seven-month term might be higher than its standard rate on a five-year term. Typically, rates are higher for longer terms. Remember that a short term has less time to earn interest.

  • Unconventional CD terms, such as seven, 13 and 25 months. Standard terms tend to be easier to remember, such as one year, three years or five years.

  • Promotional rate that applies only to the original term. CD promos tend to renew for the same term or a similar one at a standard rate. For example, a 7-month special rate CD might roll into a 6-month standard rate.

  • A higher minimum deposit than a bank’s standard CDs. Wells Fargo, for instance, requires at least $5,000 to open one of its CD specials, and $2,500 to open its standard CDs.

  • No expiration date listed. Unlike bank bonuses, you won’t typically find expiration dates on promotional rates. Treat them like regular CDs in which rate offerings on new CDs are subject to change at any time.

CIT Bank logo
Learn More

Member FDIC

CIT Bank CD

CIT Bank logo
APY

4.60%

Term

1.5 years

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Member FDIC

Marcus by Goldman Sachs High-Yield CD

Marcus by Goldman Sachs logo
APY

4.40%

Term

1 year

Are promotional CD rates worth it?

Generally, no. Promotional rates are often at traditional banks with relatively low CD yields across the board. What they consider a deal might be far lower than the rates you can find elsewhere. Plus, promotional annual percentage yields may not last more than one term, so renewing can result in a lower rate.

Online banks may also offer promo rates that are as competitive as standard rates, but bear in mind that an unusual term length may make it harder to use certain CD strategies, such as laddering or stacking CDs of different terms.

If you’re serious about comparing the highest CD rates, check out online banks and credit unions on our list of the best CD rates.

Where can I find promotional rates?

Here are some brick-and-mortar banks, and a credit union, that offer promotional CD rates:

Other rate boosts that aren’t promotional

  • Relationship rates: Some traditional banks may offer slightly higher CD rates if you have another account, generally a checking account, at the same institution.

  • Step-up and bump-up CD rates: These two types of CDs offer rate increases within a CD term. For bump-up CDs, you must ask for a rate boost and new CD rates must be higher than your current rate. (Learn more about bump-up and step-up CDs.)

  • Loyalty rate bonus: At least one bank, Ally, offers customers who renew CDs a slight bonus on top of their rate.

If you’re considering a promotional rate CD, compare with high-yield online CD rates beforehand. What one bank calls competitive might be much lower than other banks’ standard rates.

Where to find better bank promotions

If you want to find sign-up bonuses or promotions for any banking account or product, you’ll have better luck and potential rewards by widening your search to sign-up bonuses for new checking and savings accounts as well as credit cards.

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