| |
|
|
|
|
| Home
>
Personal Finance
>
Topics: Bank CDs |
|
| ----------------------------------------- |
|
| 10 Tips for Getting the Best Bank CD & Savings Rates |
Submitted by:
anonymous 12/05/2008 7:10 AM
|
| |
Here are 10 tips I use to find the best bank CD and savings rates:
1. Given our current economic situation it is wise to compare bank CD and savings rates often as banks are offering new rates all the time to attract deposits.
2. Be on the look out for special bonus or sign-up deals being offered by banks. Just yesterday I was offered a $100 sign-up bonus by Chase to open an account with Washington Mutual. One way to keep an eye out for these special bank deals is to setup some google alerts with keywords like “bank deal” or “sign-up bonus”.
3. If you see a great promotional CD rate you may want to move fast. I’ve had several CD rates I was considering vanish before I could lock them in.
4. Don’t always assume that a CD will offer a higher interest rate than a savings account. I currently have a savings account paying 4% interest which is higher than most 1-year CD rates.
5. If you find a great rate with a competing financial institution ask your local bank if they will match it. I’ve done this on several occasions and you would be surprised at how many times they come back to me saying they found some special promotional rate they forgot to tell me about.
6. Watch your bank statements like a hawk. More than once I’ve watched the savings rate I was promised suddenly drop. Understand all the conditions for a given rate of interest on your savings account. Ask your banker or customer service rep if the rate is locked in for a certain amount of time or if you need to maintain a minimum balance. Banks love to lure you in with an initial teaser rate and slowly drop it down figuring most people won’t notice or do anything about it. You need to be proactive with your savings and not be afraid to move your money from one bank to another if the rate changes or you find a much better deal.
7. Ask your accountant if there is any tax benefit for keeping your savings with a local bank. I believe Massachusetts charges a lower tax rate for local deposits than deposits with an out-of-state bank.
8. Don’t overlook credit unions. The membership requirements for some credit unions are so broad that nearly everyone is eligible. Credit unions sometimes offer really attractive CD and savings rates.
9. Ask your bank if there is any special savings rates for children. I’ve heard of one bank that offered a much higher savings account rate for children. If the purpose of some of your savings is for your child’s education you may want to look at this as an option.
10. Create a CD ladder. If you have, say $5000 in savings, and you know that you might need access to $1000 in the next 60 days, another $1,000 in 6 months, another $1,000 in a year, and you won’t need access to $2,000 of your savings in the next 2 years you can create a CD ladder to get a higher blended interest rate. In this case you leave $1000 in a savings account, put $1,000 in a 6 month CD, another $1,000 in a 1 year CD, and the remaining $2,000 in a 2 year CD.
|
|
---
sponsored: Find Money Budgeting Tips.
|
|
---
Tip Hero serves up new money-saving tips daily.
Get free updates via Email , RSS or Twitter.
|
| |
|
|
| |
|
|
| |
| |
|
|
| |
|
|
|
|
