bank rates

CD Specials: What Banks And Credit Unions Seem To Be Demanding Of Savers

money tied with stringsI’ve noticed an influx of new-money-required CD specials at credit unions and community banks lately.

You know the drill: In return for depositing money not already in an account with that banking institution, you earn a higher CD rate than normal.

Or at least you should.

Granted, as Bankaholic’s CD rates blogger, I look at more than my fair share of rate pages every week. And “new money” is among my go-to search terms.

While this has always yielded some results, the interest rates I’ve found lately now are significantly higher than the top nationally available CD rates we track daily for our CD Rates Leaderboard.

Recent New Money Deals

Institution Term in months APY Availability
Select Federal Credit Union 60 2.50% Texas
HomeBanc 39 1.75% Florida
Cardinal Bank 36 1.67% Maryland, Virginia
Xceed Finanical Credit Union 17 1.50% National
Darien Rowayton Bank 17 1.50% National
Service 1st Federal Credit Union 24 1.50% Pennsylvania
Los Angeles Federal Credit Union 13 1.30% California
USAmeriBank 12 1.20% Florida

What I can’t help wondering is, why are there so many of these specials right now? (To be sure, our evidence that this is occurring more frequently is purely anecdotal.)

We suspect banks and credit unions are anticipating the Federal Reserve raising short-term interest rates.

But unlike savers, who’ve been waiting and waiting for this day, bankers are not nearly as excited about this move.

Why would they be?

They’ve been stuffing their coffers for years now with money they’ve been paying savers very little for – or getting for free.

Big banks: I’m specifically looking at you.

As we noted a couple of weeks ago, we’re sensing a bigger drumbeat for raising rates.

That doesn’t mean the Fed will raise short-term interest rates tomorrow, nor will the Fed’s action necessarily drive CD rates up immediately. Don’t get too excited.

But it’s coming.

And bankers know that eventually they’ll have to pay savers a decent yield.

Hence the urgency to grab more (relatively cheap) deposits through new money specials while they can.

It’s like a version of that old game show where contestants stood in a booth with blowing money, making a grab for as many bills as they could before the time ran out.

Too bad it’s bankers in the box grabbing cash.

Your cash.

For now.

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