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Large banks stingy with CD rates?

By Claes Bell ·
Tuesday, February 12, 2013
Posted: 9 am ET

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?

Follow me on Twitter: @claesbell.

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johnny Doughboy
February 13, 2013 at 1:09 pm

Want a higher rate-- then check out PenFed FCU, USAA Savings Bank, CIT, Ally Bank and a host of others. The Big Banks are too parsimonious/inwardly frugal with their interest rates !! So Afraid interest will cost them a few pennies from their piggy banks !!

February 13, 2013 at 12:21 am

CD's? Savings accounts are worse. While a bank is paying only .10% interest on CD's, at the same time they're paying only .01% interest on a savings account.
Online savings account interest is as high as 1.0%, maybe slightly higher. Online CD's have higher interest too.

February 12, 2013 at 6:08 pm

I totally agree. you hear about all the reasons interest rates are being kept artificially low, but seniors needing interest earnings on savings in retirement are being hurt. It is unfair, especiaily when our politicians continue to say they are looking out for seniors.

thomas holder
February 12, 2013 at 5:03 pm

I bought less HOUSE THAN I could have bought. I PAID IT OFF QUICKLY. Never paid interest on a credit card, AND HAVE NO DEBTS;HOWEVER SINCE MY RETIREMENT INCOME IS TIED TO THE INTEREST ON MY SAVING I AM HAVING TO USE SOME OF MY SAVINGS TO PAY MY LIVING EXPENSE. YOU CAN NOT EARN $500. on a 100,000 cd. unlike many people today i do not want any hand-outs, but i do expect the goverment to stop controlling the banks to the extent they can not at least pay 5%