bank rates

Wanted: A Few Good 2% CD Promotions

piggy bank on an orange backgroundI’ve changed my non-IRA investment strategy again.

In May, I wrote that in order to maintain a 2% minimum annual percentage yield, I was reinvesting the balances of maturing CDs in a combination of 3-year and 5-year replacements.

I’ve since modified that strategy in light of evolving conditions.

Although I continue to seek a minimum APY of 2%, I’m now attempting to achieve that goal with CDs having maturities of no greater than three years.

In other words, I’m trying to shorten average maturities without sacrificing yield.

Considering that the top nationally available 2- and 3-year rates on our CD Rates Leaderboard are currently 1.55% and 1.50% APY, respectively, this is no easy task.

However, given expectations of rising rates, I’m counting on more institutions seeking funds via CD promotions, with some offering the 2% minimum yield within the 24- to 36-month maturity parameters.

I expect to park money in savings accounts while I wait for the anticipated deals to materialize. (One of these accounts, at CSBdirect, has a six-month guaranteed APY of 1.06%, for minimum balances of $10,000.)

I’ve had some success this summer, taking advantage of promotions offered by “easy access” credit unions and institutions based in Southern California, where I live:

  • In June and July, I opened a pair of 2% APY, 30-month promotional CDs at Luther Burbank Savings Bank.
  • Last month, I opened three 2% APY, 24-month CDs at New Jersey-based XCEL Federal Credit Union.
  • I’ve also opened multiple 2%, 29-month CDs at San Diego County Credit Union, pursuant to a promotion (requiring active checking) that’s still going on.

We reported each of these deals on this website.

Last week, another Southern California institution – Kinecta Federal Credit Union – launched a 2% APY, 24-month CD promotion.

Kinecta is an easy-access credit union. Savers nationwide can become members by joining, through Kinecta’s online application process, Consumers Cooperative of Santa Monica, for a $10 one-time fee.

Unfortunately, this is a jumbo CD deal, requiring a $100,000 minimum deposit – an amount I can’t scrape together right now.

But I’ll have the required funds available from CDs maturing next month, and maybe the promotion will continue.

Of course, my crystal ball is no clearer than anyone else’s.

But I’m more optimistic regarding rates than I’ve been for years, so I’m going to discipline myself, when necessary, to hold onto maturing CD funds in the expectation that, before year’s end, more of these 2% minimum APY, 24- to 36-month deals will eventually drop into my lap.

If they don’t, well, I’ll be disappointed but not particularly surprised.

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