Today, the national average savings account rate is just 0.38%. However, you may be able to boost your earning power by depositing your money in a high-yield certificate of deposit (CD). Even better, several financial institutions are offering promotional CDs that exceed even the best CD rates on the market today.
Typically, banks and credit unions offer promotional CDs to gain new customers. These CDs typically offer higher rates than standard CDs, but they’re only available for a limited time.
The good news is that if you open an account, your interest rate is locked in for the entire term, guaranteeing your interest earnings. This can be particularly valuable if rates are expected to decline in the near future.
Read more: How to maximize your interest earnings following a Fed rate cut
Here’s a round-up of some of the best promotional CD rates available in August.
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3-month CD: 4.35% APY
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4-month CD: 4.4% APY
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6-month CD: 4.35% APY
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9-month CD: 4.2% APY
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12-month CD: 4.1% APY
For a limited time, State Bank of India (California) is offering several promotional CDs that pay highly competitive rates ranging from 4.1% to 4.4% APY, depending on the term. The minimum opening deposit is $1,000. Interest is compounded and credited quarterly.
Compass Financial FCU is currently offering a 9-month CD promo that pays 4.25% APY. However, you’ll need a large minimum opening deposit of $50,000 to qualify for an account.
Membership is open to anyone who lives, works, attends school, volunteers, or worships in several South Florida communities within Miami-Dade County. Family members of current Compass Financial members can also join.
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9-month CD: 4.15% APY
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12-month CD: 4.25% APY
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13-month CD: 4.05% APY
OMB Bank is currently offering three promotional online high-yield CDs, which earn up to 4.25% APY (for a 12-month term). There are no monthly maintenance fees, though the minimum opening deposit is on the higher end at $10,000.
Though OMB Bank is based in Missouri and Kansas, CDs can be opened from anywhere in the U.S. by filling out an online application. You can also visit an OMB Bank branch and apply in person.
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7-month CD: 4% APY
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14-month CD: 3.75% APY
Members Choice Credit Union currently has two promotional CDs available, which earn 4% APY for a 7-month term or 3.75% APY for a 14-month term. The minimum opening deposit is $500. Dividends are compounded and credited monthly.
To join this credit union, you must live, work, worship, attend school, or have a business based in one of the following Texas counties: Harris, Fort Bend, Brazoria, Montgomery, Austin, Chambers, Galveston, Liberty, Waller, or Warton. Alternatively, you can join if you’re a current or retired employee of a select employer group. Those who are related to or currently live in the same household as another MCCU member are also eligible to join.
Read more: 7 credit unions anyone can join
CD rates provided by CD Valet. Note that rates are accurate as of the publication date, but are subject to change at any time at the discretion of the financial institution. Please contact the financial institution directly to verify rates and account terms before opening.
If you’ve got your eye on a promotional CD, there are a few things you may want to keep in mind before locking in your funds.
Promotional CDs may require a higher opening deposit than a standard CD
Many promotional CDs require a higher minimum opening deposit and/or minimum balance compared to standard CDs. Pay close attention to the terms and conditions of your CD and the requirements for opening an account, and make sure you have enough in savings to qualify.
Read more: These 8 banks offer CDs with no minimum deposit requirement
Most CDs offer terms in three- to six-month increments (e.g., 6-month CD, 9-month CD, 12-month CD). Meanwhile, it’s not uncommon for promotional CD rates to be associated with irregular terms, such as seven months or 14 months.
This may not be a problem for you. But if you have a specific savings timeline in mind, you’ll want to make sure that the CD term aligns with your plans.
Read more: Understanding CD terms: How long should you lock in your money?
Promotional CDs are limited-time offers. Once your CD matures, if you decide to roll those funds into a new account with the same term, it’s unlikely you’ll be offered the same rate.
In other words, if your goal is to take advantage of a competitive rate for the short term, a promotional CD may be the right option. But it’s important to remember that these rates won’t last forever.
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