How bad CD rates have affected my behavior
Bad CD rates are causing me to act in ways I never have before.
I ask: Is this "normal"?
1. I spend a large part of each day looking for add-on CDs.
I started doing this when Ben Bernanke said the target Fed funds rate would stay at zero until mid-2013.
Before, I’d let add-on certificate deals sort of drop into my lap, without any effort to find them.
I’ve previously described the add-on certificates offered by Androscoggin Bank, which I stumbled upon accidentally.
My recent efforts have uncovered a new add-on CD at a new online bank -- CIT.
It’s offering a 12-month Achiever CD with a 1.15% APY that permits one additional deposit, in any amount, after the account opens.
(It also allows a one-time rate bump-up, if CIT’s posted rate increases.)
The great thing about this certificate is that, unlike most add-on CDs, its rate ranks among the highest nationally available for the maturity.
The bad thing is a $25,000 minimum opening deposit.
I won’t have that until another certificate matures at month’s end.
Will CIT’s rate hold until then?
2. I look for credit unions at which I qualify for membership.
I hardly knew what a credit union was until I joined my first -- Alliant -- a few months ago.
Today, I have more money at Alliant than at any other financial institution.
It’s not that I adhere to the Occupy Wall Street philosophy of joining credit unions to stick it to the big banks.
It’s just that many credit unions offer better yields than banks -- large or small.
I’m currently looking at federally chartered RAFE, which I can join as a California-licensed attorney living in Riverside County.
Although microscopic in size ($15 million in deposits), RAFE has great rates (e.g., 2.53% APY on 5-year jumbo CDs).
That’s what counts.
3. I read the FDIC’s Failed Bank List every Friday.
This is like reading the obituaries.
Actually, I’m looking for good deals.
In 2008-09, several banks, to avoid deposit base shrinkage, left temporarily intact the relatively generous interest rates of failed banks they acquired.
I benefited, for instance, when US Bank left Downey Savings’ rates untouched, although higher than its own.
Chase Bank did the same when it mopped-up Washington Mutual.
The Failed Bank List is a long shot, but worth a weekly look-see.
I guess anything and everything is "normal" in today’s CD rates environment.