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Best CD rates don’t require big bucks

By Claes Bell · Bankrate.com
Monday, June 6, 2011
Posted: 11 am ET

People often assume that the bigger your deposit at a particular institution, the better you'll be treated by the bank in terms of CD rates. On average, CDs over $100,000 do get a slightly higher yield than smaller CDs, but as my colleague Sheyna Steiner noted in this space a few weeks ago, the difference has shrunk to just 5 basis points.

While that's probably not great news for those with large amounts of cash reserves, it's nice for savers just starting out to know they can enjoy some of the highest CD rates around even without a large amount of money to invest.

A look at Bankrate's most recent survey of the highest-yielding one-year CDs available nationwide shows that out of 25 banks, only one required a minimum to open of more than $5,000. Going down the line, 17 of the highest-yielding one-year CDs required $1,000 or less to open, and two of the top 10 CDs in terms of yield don't have minimum balance at all.

It's true that even the highest yield on the list, 1.4 percent, isn't going to put a whole bunch of money in savers' pockets. But I think removing barriers to saving is a good thing, and if not having minimum balance barriers around the best CD rates helps get people saving, that's a net positive.

What do you think? Are minimum balances a significant barrier to saving?

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