Promotional CD Rates – Advisor

With the average CD yielding just 1.49% APY or less according to FDIC data from Mar.

20, 2023, you might be tempted to park your money elsewhere. But you may want to consider a promotional CD. Promo CD rates can offer three times the national average rate with the same low-risk profile.

They’re offered by many banks and credit unions and can give your short-term savings a boost.

What Is a Promotional CD?

A promotional CD, also known as a bonus or special-rate CD, offers higher-than-average yields and for a shorter period than traditional CDs–typically a few months to a couple of years. Banks and credit unions offer promotional CDs to attract new deposits, although you may have to open them by a certain date or meet certain conditions to qualify. Here’s a rundown of their key features:

  • Unconventional terms. Traditional CDs are generally offered in terms such as three, six or nine months and one, three or five years.

    Promotional CDs might have unusual terms like 11 or 19 months. The terms are usually short, making them a good option for short-term savings goals.

  • No obligation past the promotional period. Once a promotional CD matures, you can collect your money, plus interest, or roll it into a new CD at any financial institution.
  • May renew automatically. Promotional CDs may renew automatically unless you withdraw your money during the grace period after the CD matures. If you forget or don’t take any action, the bank or credit union will likely roll your funds into a standard CD with the same term.

    This standard CD will often offer a lower rate.

  • May require higher deposits. Some banks require a higher deposit on their promotional CDs compared to their traditional CDs.
  • May require you to be a customer. Some banks and credit unions may require you to be a current customer to open a CD or receive the best promotional rates.

How Does a Promotional CD Work?

Like savings accounts, promotional CDs earn compound fixed interest, which means you earn interest on the principal and on your interest. Most CDs compound interest daily or monthly and credit the account monthly. But unlike savings accounts, the APY on a promotional CD stays the same for the entire term, so you know exactly how much you’ll earn.

For example, if you deposit £5,000 into a promotional CD offering 5.00% APY for 11 months, you’d earn £229 at maturity. Meanwhile, an average CD rate of 1.35% APY would only yield £62 during the same time period. You can use a CD calculator to figure out much you’d earn with different deposit amounts and APYs.

Keep in mind that some banks may require you to invest a minimum amount, such as £5,000, or lock up your funds for longer than a year to get the highest promotional rates. If you need to withdraw your funds early, a penalty will apply. Banks insured by the FDIC offer deposit insurance up to £250,000 per account, per person and per ownership category.

That means your funds–whether they’re in a traditional or promotional CD account–will be protected against bank failure. Credit union CDs are insured up to £250,000 per person through the NCUA.

How To Get a Promotional CD Rate

Getting a promotional CD rate is as easy as shopping around and opening an account. Here are the typical steps you’d take:

  1. Compare rates. Start by comparing promotional CD rates from different banks and credit unions for the term length you prefer.
  2. Open a CD account. Visit the bank’s website or go to a local branch to open the CD account.

    Many banks offer online applications.

  3. Provide your information. Be prepared to provide personal information, a government-issued photo ID and your Social Security number.
  4. Deposit your funds. If you’re approved for a CD, you can typically fund it using cash, a check or a transfer from an external account. However, online accounts typically don’t allow cash deposits.

When a promotional CD may be a good idea:

  • Your savings horizon is less than two years.
  • You want a low-risk investment backed by deposit insurance.
  • You want to earn a guaranteed APY.

When it may not be a good idea:

  • You want a long-term investment for retirement.
  • You may need to access your funds before the CD term ends. If so, a high-yield savings account would be a better choice.

How To Get the Highest Promotional CD Rate

To find the most competitive rate on a promotional CD:

  • Shop around. Use a search comparison tool to find the best CD rates for the deposit amount and term you’re looking for.
  • Consider an online bank. Because they have lower overhead costs, online banks typically offer the most competitive rates.
  • Consider a CD ladder. CD ladders involve opening multiple CDs with staggering terms.

    You could open a six-month, 12-month and 18-month CD and split your savings across the three to take advantage of higher promotional rates on longer terms while still being able to access your money every six months.

  • Look for relationship rates. Many banks offer relationship rates, which means you can earn a higher promotional rate on your CD just by being a customer.

Find The Best CD Rates Of 2023

Learn More

Tags:

beauty-works-online listed on couponmatrix.ukbulk listed on couponmatrix.uketihad-airways listed on couponmatrix.ukpdf-expert listed on couponmatrix.ukpockets listed on couponmatrix.ukthe-it-bay listed on couponmatrix.uk
beauty-works-online listed on couponmatrix.ukGive your mane a glamorous makeover and invest in the diverse range of hair extensions available from Beauty Works Online. Grab a Beauty Works discount code from us to cut the cost of your hair extension solution, and whether you want a clip-in or a weft to enhance your natural assets, you won’t have to break the bank. The Beauty Works collection offers sets that boost volume, length and body alike, so no matter what your requirements you can get creative with your look!
bulk listed on couponmatrix.ukBulk™ is an iconic supplements brand helping you achieve your fitness goals. Make the most of a Bulk Powders discount code to save big on everything from vegan protein powders to high powered vitamins—whether you're looking to slim down, tone up or increase muscle mass, Bulk has a range of science-driven products to help you achieve your goals.
etihad-airways listed on couponmatrix.ukEtihad, one of the most trusted and respected airlines in the world at the moment, currently travel to over 110 destinations across the world. Launched in 2003 and owned by the Abu Dhabi Government, Etihad has a mandate to run safely, commercially and profitably. The only way to do this is by offering a great service and they certainly do that. Experience their great quality flying for yourself and use an Etihad promo code, you might find what you're looking for at an even lower cost.
pdf-expert listed on couponmatrix.ukNo Apple device is truly complete without PDF Expert, the app that empowers users to become PDF experts. With over 30 million users and counting, PDF Expert equips you with the tools to edit, annotate, convert, sign and merge PDFs seamlessly from your Macbook or iPhone. You can acquire PDF Expert through a yearly subscription or a lifetime subscription, although it's important to note that the lifetime subscription does not include future updates. To simplify your PDF-related tasks, consider using a PDF Expert discount code to kickstart an affordable plan. If you're a student using this app for educational purposes, you may even qualify for PDF Expert's special 50% discount for students, making it an even more budget-friendly option.
pockets listed on couponmatrix.ukMen with an eye for the exquisite will love a little Pockets clothing in their wardrobe. Sporting a collection of men’s designer threads from high-profile brands like Lacoste, Belstaff and Ralph Lauren, imagine the amount you can save when you shop smart using a Pockets discount code. Backed by a beautiful array of designer shoes, accessories and smart wear, nothing makes you feel quite as fancy as a fresh outfit from Pockets. At Groupon, we understand that saving money is important to our customers. That's why we work hard to find the best discount codes for Pockets products.We search the internet for discount codes and share them with our customers. We also offer a variety of ways to save money, including coupons and deals. If you're looking for ways to save money on Pockets products, Groupon is a great resource. We'll help you find the best discount codes and deals so you can save money on your next purchase. Smart up in the snazziest shirts for your next social occasion with Pockets and you’ll be the most high-class man in attendance. Be it from the designers at Hugo Boss or Paul Smith, you can save up to a triple-digit figure by making the most of any Pockets promo currently running. Shop a sleeve size by the season and start setting trends wherever you travel with Pockets superior shirts.
the-it-bay listed on couponmatrix.ukWelcome to The IT Bay, where cutting-edge technology meets unbeatable prices! As a leading player in the tech and electronics arena, The IT Bay stands out for its commitment to providing top-notch products with low prices and free next-day delivery. The extensive inventory includes renowned brands such as Lenovo, Dell, Apple and ASUS, offering everything from student laptops to state-of-the-art 4K TVs. The IT Bay is your ultimate destination for all things tech. Be sure to visit Groupon to snag an exclusive IT Bay discount code that will make your tech dreams even more affordable.