Some banks offer promotional CD rates in addition to their standard rates. These rates tend to be the most competitive CD deals in the bank, but they don’t last forever and aren’t always the best deals you can find, so compare CDs from several banks before opening one. Here is what you need to know.
What are the promotional prices for CDs?
Promotional CD prices, or special CD offers, may have the following characteristics:
Higher rates on shorter terms. For example, a bank’s promotional rate for a seven-month term may be higher than its standard rate for a five-year term. Typically, you earn more interest over the longer term.
Unconventional CD terms, such as seven, 17 and 37 months. Standard terms tend to be easier to remember, like one year, three years, or five years.
Promotional rate that applies only to the original duration. CD promos tend to renew for the same or a similar duration at a standard price. For example, a 9 month special rate CD can become a standard 6 month rate.
A higher minimum deposit than a bank’s standard CDs. Wells Fargo, for example, requires at least $ 5,000 to open one of its special CDs and $ 2,500 to open its standard CDs.
No expiration date specified. Unlike bank bonuses, you generally won’t find expiration dates on promotional rates. Treat them like regular CDs in which price offers are subject to change at any time.
Are promotional CD prices worth it?
In general, no. You tend to find promotional rates at traditional banks with relatively low CD yields across the board. What they see as an offer may be much lower than the rates you can find elsewhere. Additionally, promotional annual return percentages typically do not last longer than one quarter, so renewal may result in a lower rate.
If you really want to compare the highest CD rates, check out the online banks and credit unions on our list of best CD rates.
Where can I find promotional rates?
Here are some physical banks and a credit union that offer promotional rates for CDs:
Other rate increases that are not promotional
Relationship rate: Some traditional banks may offer slightly higher CD rates if you have another account, usually a checking account, at the same institution. The boost is usually minimal, often less than a percentage point.
Progressive and progressive CD prices: Both of these types of CDs have rate increases built in once or twice per quarter. For replacement CDs, however, you may not be able to request a rate increase if the new CD rates remain below your current rate. (Curious about other CDs? See our article on nine types of CDs.)
Loyalty bonus : Some banks, including Ally, offer customers who renew CDs a few hundredths of a percentage more and more of their price.
If you are considering a promotional price CD, compare high yield online CD prices first. What a bank calls competitive can be much lower than the standard rates of other banks.