Has a bank offered you a "Special" CD rate?

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123
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Has a bank offered you a "Special" CD rate?

Post by 123 » Tue Jul 05, 2016 2:20 pm

I handle some bank accounts for elderly family members. Recently a 5-year $200K CD matured and I phoned the bank branch that was holding it to receive the proceeds. The bank that held the proceeds had acquired the bank where the CD was initially deposited. Of course the branch person asked why I was redeeming the account and, of course, I explained that a better rate was available elsewhere. The branch person then offered to match the rate on a 3 or 5 year CD offered at Synchrony Bank if I would just let the CD rollover there. (I'm sure the acquiring bank simply wanted to hold onto all the deposits they could.)

While I proceeded with the withdrawal because the online banking features at Ally and Synchrony Bank make CD investing so much easier (and I wanted to split up the CD maturity) I'm curious if these kind of "Special" offers are common. Has anyone else gotten a similar "Special" CD offer (Has anyone asked for one or been offered one without asking)?
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ralph124cf
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Re: Has a bank offered you a "Special" CD rate?

Post by ralph124cf » Tue Jul 05, 2016 4:51 pm

I have had this happen to me at several banks. The important thing is mentioning a higher rate elsewhere.

My current smaller bank was recently acquired by a megabank, and the manager told me that they were no longer allowed any discretion on CD rates.

Ralph

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happymob
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Re: Has a bank offered you a "Special" CD rate?

Post by happymob » Tue Jul 05, 2016 5:29 pm

Yes. I've received changes from published rates and early withdrawal terms multiple times.

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whodidntante
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Re: Has a bank offered you a "Special" CD rate?

Post by whodidntante » Tue Jul 05, 2016 8:01 pm

I tend to buy large numbers of small CDs as a way of managing the EWP, so I imagine any bank would be glad to see me go.

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Abe
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Re: Has a bank offered you a "Special" CD rate?

Post by Abe » Wed Jul 06, 2016 10:19 am

Yes, all the time. Every thing is negotiable. But, you have to ask. Many times a bank will match another banks rate. Just recently, I had a CD mature at a local bank. I didn't like the new rate they offered. The girl I was talking with told me she would ask her superior if they could pay the rate I wanted. When she called me back she said they could not pay any more. I said, "okay, I can get a higher rate at xxx bank." Before I could get the words out of my mouth, she said they would match the other banks rate, so I knew her superior told her to give me the higher rate if I threatened to move the money.
Last edited by Abe on Wed Jul 06, 2016 10:29 am, edited 1 time in total.
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Toons
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Re: Has a bank offered you a "Special" CD rate?

Post by Toons » Wed Jul 06, 2016 10:22 am

I haven't purchased cds..
In a long ,long time.
Maybe I will look into it. :happy
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HueyLD
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Re: Has a bank offered you a "Special" CD rate?

Post by HueyLD » Wed Jul 06, 2016 10:39 am

ralph124cf wrote:My current smaller bank was recently acquired by a megabank, and the manager told me that they were no longer allowed any discretion on CD rates.
Yes, that's a real problem.

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mickeyd
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Re: Has a bank offered you a "Special" CD rate?

Post by mickeyd » Wed Jul 06, 2016 11:05 am

The only recent offer that I recall getting in the mail is from Discover Bank (I do not bank there) who offered 0.95% and a $100 bonus for the online savings account. Not an offer that motivated me.
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sport
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Re: Has a bank offered you a "Special" CD rate?

Post by sport » Wed Jul 06, 2016 11:22 am

I had one situation where a CD matured, and the new rate was not competitive. I told the branch manager that I would move the money if I could not get a better rate. The answer was "we do not negotiate our rates". That was the end of the discussion and I withdrew the money.

I had one other situation where I inherited a CD upon the death of the owner. Since it was due to death, I was free to withdraw the money without penalty. However, the rate was good and no longer available. I told the manager I would leave the money in that bank if they would continue the term and rate of the original CD. They agreed to do so, and I had a new CD in my name with the old maturity date and interest rate.

Jags4186
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Re: Has a bank offered you a "Special" CD rate?

Post by Jags4186 » Wed Jul 06, 2016 11:37 am

I'm curious why people are buying CDs these days. The best 5yr jumbo CD APY on bankrate.com is only 2.05%. I would think you could find an individual municipal bond that pays better than that. Or just keep it in a regular savings account for 1.1% and keep it liquid. Or just hunt around with your money for savings account bonuses if you're inclined for a little more work.

123
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Re: Has a bank offered you a "Special" CD rate?

Post by 123 » Wed Jul 06, 2016 5:35 pm

Jags4186 wrote:I'm curious why people are buying CDs these days. The best 5yr jumbo CD APY on bankrate.com is only 2.05%. I would think you could find an individual municipal bond that pays better than that. Or just keep it in a regular savings account for 1.1% and keep it liquid. Or just hunt around with your money for savings account bonuses if you're inclined for a little more work.
At times some investors are adverse to any risk whatsoever. It is not uncommon for investments by/for elderly individuals, who may have lived through the depression before FDIC insurance was available, to favor CDs. They don't want the risks that (non US Treasury) bonds entail.

Those that assist them with their investments have to respect their needs and wishes.
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protagonist
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Re: Has a bank offered you a "Special" CD rate?

Post by protagonist » Wed Jul 06, 2016 6:49 pm

Jags4186 wrote:I'm curious why people are buying CDs these days. The best 5yr jumbo CD APY on bankrate.com is only 2.05%. I would think you could find an individual municipal bond that pays better than that. Or just keep it in a regular savings account for 1.1% and keep it liquid. Or just hunt around with your money for savings account bonuses if you're inclined for a little more work.
1. CDs are actually quite liquid. A 2.05% APY with a 6 month EWP would yield essentially the same as the regular savings account you mentioned if you withdrew your money in a year, and progressively more after that. That said, 2.05% as a top rate is a bit low cf. what I was seeing a couple of months ago, when I purchased a CD yielding 2.57% (6 mo EWP), and 3% is available in an IRA. With larger investments, a difference of 1%-2% compounded is not trivial. Perhaps you have to look a bit further for a better rate.

2. TIPS yields are not much better these days, if that good (worse this year with virtually no inflation).....same with bond yields and treasuries. And CDs are safer than corporate bonds (the value of bonds will decline with increasing interest rates, whereas if interest rates increase you can sell your CDs and opt for a higher rate). So you are paying a risk premium with bonds and you have to ask if you are getting enough additional return proportional to your risk. To get any guaranteed inflation protection with TIPS you have to hold to maturity, and yields are pretty dismal these days. So what are the clear advantages of any of these options over CDs?

Savings account bonuses are great but they are usually limited- you wouldn't want to invest too much money in order to receive them.

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dm200
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Re: Has a bank offered you a "Special" CD rate?

Post by dm200 » Thu Jul 07, 2016 8:07 am

whodidntante wrote:I tend to buy large numbers of small CDs as a way of managing the EWP, so I imagine any bank would be glad to see me go.
You may be doing something completely unnecessary. It all depends on the "fine print" in the disclosure, but it is very common that the EWP applies only to the amount withdrawn early (or some near, round multiple).

So, for example, if you have one $30,000 CD - and want/need $5,000 early - the bank or credit union might only apply the EWP to the $5,000 withdrawn.

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janiebegood
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Re: Has a bank offered you a "Special" CD rate?

Post by janiebegood » Thu Jul 07, 2016 8:59 am

Jags4186 wrote:I'm curious why people are buying CDs these days. The best 5yr jumbo CD APY on bankrate.com is only 2.05%. I would think you could find an individual municipal bond that pays better than that. Or just keep it in a regular savings account for 1.1% and keep it liquid. Or just hunt around with your money for savings account bonuses if you're inclined for a little more work.
We have a chunk in a PenFed CD making 1.2%. I have another chunk making 1% in a credit union money market account. Just this morning I was considering whether to move the PenFed chunk to the credit union when it matures because of the complete liquidity of the MM account. But for some people, having that chunk unavailable is a good way to keep the chunk intact. In my mind, that CD is completely off-limits. So maybe that's another factor in decision-making around CDs?

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Tamarind
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Re: Has a bank offered you a "Special" CD rate?

Post by Tamarind » Thu Jul 07, 2016 9:55 am

Jags4186 wrote:I'm curious why people are buying CDs these days. The best 5yr jumbo CD APY on bankrate.com is only 2.05%. I would think you could find an individual municipal bond that pays better than that. Or just keep it in a regular savings account for 1.1% and keep it liquid. Or just hunt around with your money for savings account bonuses if you're inclined for a little more work.
Some might want to maintain an existing ladder (where other rungs have better rates) rather than worry about stashing the money in a separate account. As for me, it's the back half of my emergency fund, where the front is in a savings account at 1%. Hopefully I will never touch this money. I cannot do anything more exciting with it, so 2.25% on a 5-year works fine. In an emergency I would not mind the EWP.

Re: the OPs question, last year I got offered a special rate from a bank where I didn't even hold a CD! I'd closed my 0.5% MM account with a local credit union, and parked the money (around $30k of EF) in checking while I waited for Barclays to finish verifying my ID and accept the initial transfer. Suntrust called me up to advise me not to keep a high checking balance, then offered to match Barclay's rate if I'd leave the money with them! I opted not to, but clearly it takes very little to entice banks to offer special rates.

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dm200
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Re: Has a bank offered you a "Special" CD rate?

Post by dm200 » Thu Jul 07, 2016 5:58 pm

While it does not apply to the OP, nor to most folks here - almost all of the excellent money market rates commonly recommended (such as rates aroung 1% or more) are not available to organization accounts; they are just available for personal accounts.

FDIC or NCUA insured CDs/certificates, then, can make more sense for organizations.

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Re: Has a bank offered you a "Special" CD rate?

Post by Alan S. » Thu Jul 07, 2016 10:34 pm

I wonder if the ability to make exceptions to advertised CD rates might be possible in some states and not allowed under the banking rules in other states..................If so, would be nice to know about the individual states.

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