We usually write about where to find the best CD rates.
But today we’re going to focus on where to find the worst deals.
We’re talking truly wretched rates such as 0.15% APY on a 6-month CD, or 0.25% APY for a 12-month CD.
Those are the kinds of deals you’ll find these days at the nation’s biggest banks.
JP Morgan Chase is the worst, but Citibank, Wells Fargo, PNC and all the others are nearly as bad.
These banks don’t have to compete for our savings because:
- They can borrow as much money as they need from the Federal Reserve for practically nothing. No, really, the rate for overnight loans is 0% to 0.25%.
- They don’t really need much money because they’re whacking billions from their loan portfolios every month.
That’s why you see one small bank after another take a turn at the top of our CD rankings.
These are banks that are still trying to grow by taking in new deposits and funneling that money to new loans and investments.
But so many savers rush to those small banks that more money than they can wisely use floods into new accounts.
Within weeks, sometimes days, they cut their rates to slow the flow of money into the bank and fall out of the rankings.
The bottom line for savers: We won’t see decent certificate of deposit rates again until the big banks, with their ability to put large sums of money to work, get back in the game.
Yet look at the shameful difference between what the big banks are paying and the best, nationally available deals from the smaller banks that lead our rankings:
Harris Bank is paying 0.15% APY on a 6-month CD. TotalBank is paying 1.65% APY.
JP Morgan Chase is paying 0.25% APY on 12-month CDs. Five small banks, including H&R Block Bank are paying 2.00% APY.
PNC Bank is paying 1.05% APY on a 24-month CD. Frontier Bank is paying 2.40% APY, 2.45% APY or 2.50% APY, depending on the minimum deposit.
Bank of America is paying 1.86% on 36-month CDs. Goldwater Bank is paying 3.03%.