February 2013: CD Options

In an era of low rates on savings accounts, Certificates of Deposits are one product option that can help clients maximize the return on their unused cash. In this edition of Bank Monitor Report, we look at the individual CD options offered to prospects online, investigating the features, APYs and details of each. As we examined each bank’s CD offerings, we focused on the following issues and product attributes:

  • The type(s) of CDs offered by each bank
  • APYs available, noting any variations for the term-length and size of deposit
  • How prospects are able to access product details, and what those details include

Nearly every bank we track includes a CD option on its public site, with 88% of all firms including specific product information for in-house CDs online. Nine banks allow users to apply for each of their CD products online, while four restrict online applications for at least some CD-types and two final firms require prospects to visit a branch location in order to open a new CD account. In addition to offering standard or traditional CDs, many firms offer Special or featured CDs, limited time options with specific terms and higher-than-normal APYs. A few banks also offer alternative CD options, including Liquid CDs, Opt-Up CDs and Callable CDs, with three separate firms offering prospects four CD-type options for online opening.

While most firms promote CDs as an FDIC-insured way to earn decent returns in exchange for locking up funds for a set period of time, the APYs for standard CDs are still mired below 1%. In fact, for a standard $10,000 CD set for a 12-month term, all but one firm offers less than 0.5% as an APY, with the highest APY 0.97%. Only four banks offer Relationship Rates as a way for clients to boost their returns by holding additional firm accounts, and most no longer offer tiered interest rates for higher-value accounts.

Additional key findings from out report include:

  • All but two firms that offer CDs include a dedicated CDs mainpage on the public site
  • 33% of banks include a CD-related FAQs section accessible from CD product pages
  • The lowest amount required to open a standard CD is $250; the highest is $2,500