whats the best going rate for a 11 or 12 month CD?

Question

my local bank, i don't belong, is offering 11 month CD's for 5.15%, but i have to join and get a FREE checking account. is this good, is there a better rate. richmond, va area, thanks

Answer 1

That's a great rate.

In fact, it's so good that it looks too good to be true. If this is a regular CD, then this is called a "loss leader" or a "teaser", where the CD rate is above market rates (about 4.8%) and bundled with something else to make back their profit (e.g. a checking account with fees, minimum balances and low interest rates).

I am a huge fan of Internet banking because I get good rates, good service (when was the last time you said that about your bank?) and don't need to walk into (or pay for) a branch to feel good about my FDIC insured money. IF you don't need to have a branch, go iBanking. I recommend ING because their rates are consistently high without messing with me with loss leaders. Netbank has the highest loss-leader CD rates now, great service, but the do tend to lower their rates down the road once you've signed up (e.g. my money market is 3.66% vs. Vanguard which gives me 4.98%). Netbank gives you 5.35% APY. Technically, there is one that is higher - AmTrust Direct - but I don't know them from Adam.

I actually prefer to invest in Vanguard money markets at 4.98%, which is lower, but I am only giving up 35 basis points of interest for instant liquidity and no penalties if I cash out.

Answer 2

depends on the bank some banks you need more money but on some other banks its could be 1% or less