Negotiate A Better CD Rate

Did you know that you might be able to negotiate CD rates with your bank? I didn’t, until I read a recent Bankrate post about it!

I always thought that certificate of deposit rates were non-negotiable. You looked at a list of CD rates, you picked the one or ones you wanted, and you opened the accounts. Apparently, I was wrong! Bankrate recently called thirty financial institutions, ten banks, ten thrifts, and ten credit unions (the largest in their category by deposits); to see if they could negotiate CD rates. They also included some community-size banks with fewer than $4 billion in deposits.

The result? Less than 25% would negotiate and some wouldn’t negotiate as a matter of policy. You might see that as confirmation of a long held belief but I saw it as an opportunity because 25% is greater than zero.

The key to getting a better rate is by simply asking for it and offering a compelling reason to get it. Many banks can’t negotiate as a matter of protocol, there’s no sense wasting your time there. Some will only give you a better rate if you open a Jumbo CD, where you must deposit more than $100,000.

My advice is to just ask – “What would I need to do to get a better CD rate?” and they’ll tell you. The bank branch is a lot like a showroom floor, everyone there wants you to open a new account and their compensation is, directly or indirectly, tied to the number of accounts they’re able to secure.

The lesson from this is that you should always try to negotiate, even in situations where you think it’s not possible. Where have you negotiated a better deal when others would’ve scoffed?

Jim regularly writes about banking and other money matters at, a personal finance blog.

(Photo: armydre2008)