3 Simple Ways to Find Higher CD Rates


Much of what you can earn on a Certificate of Deposit (CD) is based on factors out of your direct control. First, a traditional yield curve dictates that longer-term investments demand higher returns, so the longer you can lock away your cash in a CD, the more interest a bank is willing to pay. In addition, economic policies enacted by the government, as well as the overall economic environment, will affect the rates you can earn on deposits.

Currently, these forces are making it difficult for savers to find rates anywhere near those they came to expect in past decades. When even most five-year CDs offer interest rates of less than 2 percent, you’ll be struggling to pursue every bit of extra yield possible. Here are three relatively simple ways to make the most of your savings through the best CD rates.

1. Seek promotional rates. The inverse relationship between liquidity and yield, as well as the current economic climate, are out of your control. However, there is a third factor influencing CD rates. The individual pricing strategy that a bank pursues can be partially reflected through the use of promotional rates for certain CD terms. Market Rates Insight, a financial market data firm, explains that CD rate premiums—the difference between regular and special CD rates—are used to “drive balances towards the most desired deposit products” and are an “indication of the capital strategy” of each bank. As a result, consumers can potentially encounter promotional rates that go above and beyond the typical offerings.

Analysis of MRI’s CD pricing data over the past year revealed that banks could offer up to 0.68 percent of additional interest (expressed as an annual percentage yield) over the regular average APY. A bonus rate could even double your return. The average promotional APY for a 3-year CD was 1.38 percent—nearly twice the regular average.

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