CD Deals: Get Them in Writing


You know the story: You go online looking for a generous certificate of deposit or savings account. You find a few promising candidates, phone for details, then send your money.

In most cases, we’re happy with the results. But not always. It’s one thing to rely on a faceless call-center voice when you’re trying to fix a glitch with your cell phone or computer, because if things don’t work you can always start over. But when it comes to critical financial decisions, it pays to know who you’re talking to, and to get your answers in writing.

These days, yield-hungry savers can go online to look for the best CD deals, shopping on a nationwide market. Some banks and credit unions really do offer better deals than others, even though you might expect supply and demand to make all deals about the same.

Better-than-average deals may be a result of an individual bank’s needs. A bank may be low on money to lend to home and car buyers, for instance, and will boost savings yields to attract more deposits.

Because savers are always looking for better-than-average deals, there are always a few unscrupulous outfits trying to entice them with deceptive ads. We hear stories of folks who bought big CDs but didn’t get the high yields expected. And when they pulled their money out, they were socked with big early-withdrawal penalties.

Here are a few simple precautions to help reduce that risk:

First, stick with a bank you already know and trust. That’s easier to do if you keep yields in perspective. Sure, it’s nice to earn an extra quarter of a percentage point from some bank across the country, but that’s just $25 a year on a $10,000 CD.

Second, don’t be rushed. Anyone who pushes you to make a quick decision is probably trying to prevent you from thinking about it, asking too many questions or shopping around.

An ad may offer an above-average CD deal “for a limited time only,” but if you miss that deal another one will crop up. You’re not going to lose much interest in a few days. In fact, at today’s rock-bottom yields, you’re not going to lose much even if you shop around for months.

Finally, have the terms on paper. You need to know the yield, how it will be calculated and what you’ll pay if you take your money out early. Also find out what happens when the term ends. Will your money be rolled over into a new CD automatically? How much time will you have to get your money out before that happens and you face an early-withdrawal penalty?

Answers received on the phone, and even on a recorded line, are worth as much as the paper they’re printed on: nothing. The recording can be used to resolve a dispute, but the firm really records the call to protect itself, not you. You may have a devil of a time getting access to it, besides.

Today’s low yields are exasperating, and are causing many savers to look pretty far afield. But, in a sense they can be liberating, because no matter how far you look, no CD will make you rich. If the difference is only a few dollars a year, there’s no reason not to go someplace familiar, like the bank down the street.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at

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