Looking for a high rate on a certificate of deposit? You might want to think small.
The top five banks in the U.S. pay CD rates a third as high as banks with less than $1 billion in assets, according to a new report from Market Rates Insight.
For example, on short-term CDs with a term of up to one year, the top five banks pay an average of 0.05 percent compared to 0.29 percent at smaller banks, according to the report. The same holds true for longer-term CDs. On CDs with terms of more than three years, the top five banks pay an average of 0.52 percent compared to 1.08 percent at small banks.
Of course, 0.29 percent isn't exactly a king's ransom. Ultralow interest rates have made it almost impossible to get a substantial return on your savings these days, no matter where you go. But if you want to stick with CDs, be aware there will be a tradeoff when you're choosing where to keep your nest egg. The convenience of banking at a massive, branch-on-every-corner bank is going to come with lower deposit rates.
What do you think? Do you find CD rates are better at smaller banks?
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