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E*Trade CD Rates Dive To Appalling Lows

Posted in CD Rates by CrankySaver
January 31, 2010 08:30 AM - 6 Comments

Hey, E*Trade baby, here’s something worthy of your best “shocked face.”

Last April we called E*Trade out for offering ridiculously low rates on its 12-month to 24-month CDs.

Little did we know that the discount brokerage had just begun to slash its returns.

Last April we called E*Trade out for offering ridiculously low rates on its 12-month to 24-month CDs.Here are the waaayyy below average rates E*Trade is now offering on what it claims to be “High-Yield” certificates of deposit:

3-Month CD: 0.01% APY

6-Month CD: 0.05% APY

1-Year CD: 0.10% APY

5-Year CD: 1.10% APY

From top to bottom, these are about the worst rates anyone is offering. (Yeah, even worse than Chase.)

Since no one in their right mind would buy one of these CDs, we can only figure that E*Trade is trying to take advantage of customers who aren’t paying attention and allow maturing CDs to automatically rollover.

Clearly it’s time for anyone in that position to take E*Trade’s advice, “take control” of their investments, and dump these dogs.

Click here if you haven’t seen the latest E*Trade commercials.

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Comments (6)
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6 Existing Comments

  1. William S said:
    on January 31st at 02:47 pm

    Absolutely pathetic.
    BTW – I noticed that the federal funds rate was a whopping 8.00% in 1990! Does anyone recall what CDs and savings accounts were paying at that time?

  2. William S said:
    on January 31st at 02:47 pm

    P.S. Here’s the link to the funds rate history:
    http://www.federalreserve.gov/fomc/fundsrate.htm

  3. Lightrider said:
    on February 1st at 02:39 am

    I remember at one time in the early 70’s I believe, my parents had a 11 or 12 % CD. I could be wrong but I vaguely remember it.

  4. DealMaven said:
    on February 1st at 10:06 am

    Thanks for providing the link, William.

    With regard to your question about CD and savings yields in 1990:

    Jan. 1, 6-month 7.92% APY Dec. 26, 7.35% APY
    Jan. 1, 12-month 7.95% APY Dec. 26, 7.26% APY
    Jan. 1, 24-month 7.89% APY Dec. 26, 7.48% APY
    Jan. 1, MMA, 6.35% APY Dec. 26, 5.91% APY

    These are national averages as determined from a weekly survey conducted by Bankrate.com. No savings accounts data were available, but the MMA is probably close.

    As you can see, rates went down during the year. But they look great compared to what we’re looking at today.

  5. William S said:
    on February 1st at 10:21 am

    Thanks for that, DealMaven. Amazing APY rates! Can only dream of such returns today.

  6. DealMaven said:
    on February 2nd at 11:21 am

    When E-Trade recently released its 4th quarter financial statement, it became pretty clear why they’re paying such shabby CD rates.

    While the brokerage business is doing fine, E-Trade is taking a serious hit from bad mortgages. In fact, delinquent loans rose 16 percent to $2.29 billion and charge-offs were up by almost $19 million versus a year ago.

    How can E-Trade save money? Don’t pay anything for CDs, but more importantly, hope that current CD holders won’t pay attention and let their certificates of deposit rollover and collect these pitiful rates.

    And they’re paying $3 million for each 30-second Super Bowl TV ad. You’ve got to cut back somewhere.

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