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CD Bonus Rates Index – July 2013

Banking, CDs

Even as rising interest rates on U.S. Treasuries continue to hit the news, CD rates (on average) have not followed suit. Compared to last month rates are still shockingly low, having remained stagnant or even declined. A once sure-fire way to find higher CD rates was to seek promotional rates that many banks and CUs offer to attract new deposits, or push them towards certain maturities. Unfortunately , this strategy is much more difficult these days. Only very short-term CDs (less than 12 months) are outperforming the non-promotional average. However this isn’t always the case. With a bit of shopping around you can find a CD earning twice the average rate or more. Read on for some examples of great CD rates across the country.

Reference Table: What are average rates and how do they compare to average promotional rates?

Length of Term (months) Average Promo APY Average Reg. APY
3 0.32% 0.14%
6 0.46% 0.23%
12 0.34% 0.34%
18 0.39% 0.39%
24 0.45% 0.53%
30 0.57% 0.52%
36 0.71% 0.70%
48 0.82% 0.86%
60 1.01% 1.07%

Bonus CD rates that beat the average

Institution State Term APY Notes
Vermont FCU VT 5 years 1.80% Min $500
Rate is 2.10% APY when opened for a youth.
UniWyo FCU WY 37 months 1.51% Min $250
Michigan Schools & Government CU MI 26 months 1.30%  Min $500
Winchester Savings Bank  MA 20 months 1.25% Min $500
Bay Cities Bank FL 13 months 0.85%  Min $1,000

Note: Promotional rates are subject to change. Make sure to confirm CD rates with your bank or credit union.

A Refresher: Why Promotional/Special Rates Make a Difference

CD rates are historically low, and are likely to remain so for the near future. Yields are primarily a product of two forces that are out of a consumer’s control: (1) economic environment and  (2) the fact that longer-term investments will demand higher returns.

There is however, one factor that offers more flexibility for consumers: individual banks and credit unions each have their own capital strategies, which cause them to offer different promotional rates for certain CDs (in an effort to drive  balances towards the most ideal deposit products for them).   Such promotional/bonus rates can easily outperform typical accounts of a comparable term and are worth looking for to help boost returns.

Bonus button image via shutterstock