Promotional CD Rates: How They Work

Banks offer promotional CD rates as their most competitive yields, but they aren't generally the best deals around.

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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 before opening one. Here’s what to know.

What are promotional CD rates?

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

  • Higher rates on shorter terms. 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, you earn more interest on longer terms.

  • Unconventional CD terms, such as seven, 17 and 37 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 9-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 are subject to change at any time.

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Are promotional CD rates worth it?

Generally, no. You tend to find promotional rates 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 don’t tend to last more than one term, so renewing can result in a lower rate.

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. The boost is usually minimal, often less than a percentage point.

  • Step-up and bump-up CD rates: These two types of CDs have built-in rate increases once or twice per term. For bump-up CDs, though, you may not be able to ask for a rate boost if new CD rates stay lower than your current rate. (Curious about other CDs? See our post on nine types of CDs.)

  • Loyalty rate bonus: Some banks, including Ally, offer customers who renew CDs a few hundredths of a percentage more 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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