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)


Edit Your Comment

  1. mac-phisto says:

    good post. here’s some tips:
    1) review your local paper for specials at competing institutions & review rates on bank websites – these can be used to make your case for a better rate. don’t walk in there with unrealistic expectations, or you’re likely to be denied.
    2) an institution is more likely to negotiate if it means remaining or becoming your “primary financial institution” – the one you use for most of your deposit/lending needs.
    3) from my experience, you have a much better chance of negotiating rates on “new money” (money that isn’t already in the institution).
    4) shop loans when you’re shopping cd rates. if a bank manager thinks s/he might also get you to open a mortgage, car loan or credit line, you’re more likely to get a better rate than usual.

    good luck!

  2. chai_tea says:

    Timely, timely. I’m just waiting for the bus to take me to renew my current CD. I spent last night researching rates at other institutions, but prefer to keep my money under one roof. I’ll definitely be asking what it might take for me to get a better rate this time. Also must investigate the option of laddering, with slim hope that things might move (up) in the next six months.

    • skycrashesdown says:

      @chai_tea: If you’re interested in laddering, the bank might not want to negotiate a new rate but might be willing to change the term/length of a CD for you. I’ve never seen the bank where I work change a rate for someone, no matter the dollar amount, but we can often alter the term of a CD for someone. For example, if they’re interested in our 18 month rate but don’t want to lock their money up for that long, we might potentially be able to get them the same rate for 12 months instead. So if the bank won’t negotiate rates, try asking for a shorter or longer term.

  3. CaptRavis says:

    As a matter of policy, you could not offer a different rate over the phone because a rate inquiry demanded that a CD rate disclosure be provided. In a similar vein, I have never sat at a “new accounts” desk (on either side of the desk) at any instituion that did not have a variance from the printed rate in order to either retain old/entice new customers.

  4. richcreamerybutter says:

    I wonder if this technique also applies to credit unions (though don’t they tend to offer better rates anyway)?

  5. chocolate1234 says:


    Credit Unions tend to have lower lending rates, but they also have lower deposit rates (CD’s, Money Markets, etc.). Lending and deposit rates are usually correlated. As a general rule, I would go to a credit union first for a loan, but a bank first for a CD. Although, if you’re looking for the best deal, check out online banks, just make sure they’re FDIC insured. They often have the best deals. This all depends on the institution though, so I would do my research first.

    Where I work, we used to give out bumps more freely, but don’t do it as often anymore. We usually can’t even consider giving a bump unless the CD is over $100,000, and even then it’s usually only .25% at this point. Still, better than nothing when the rates are so low. If you are looking to move your money, don’t be shy about asking if they can offer you a bump. They’ll never offer you one if you don’t ask!

    • mac-phisto says:

      @chocolate1234: i would have to disagree a bit here. credit unions often have comparable rates to banks. it’s true that lending/deposit rates are correlated, but since many credit unions have switched to risk-based pricing on their credit products, there’s not a direct correlation between the advertised loan rates & cd rates.

      to give you an example, there’s a credit union near me that currently offers 5.5% on a 55-month cd. that’s a pretty long term to be locking money up, but it’s also much higher than the other offerings i’ve seen here.

      don’t even waste your time at a credit union when it comes to MMAs though. credit union investment guidelines dictate that they can’t invest the same way banks can, so your return on this account type will be significantly lower than what you would find at a bank.

  6. chocolate1234 says:


    Like I said in my post above, that was just a generalization. I compare rates weekly to keep up with the competition in my area, and as a general rule, credit unions tend to have lower lower deposit unit rates. It doesn’t mean every credit union is going to fit into that category, but many of them do. With the craziness of the economy the last few months, rates have been all over the board, so I don’t doubt that more credit unions are offering competitive rates.

    If you’re willing to tie your money up for 55 months, you can get higher rates (although I haven’t seen 5.5% in my area). Still, most people aren’t willing to tie their money up for nearly five years.

  7. Rectilinear Propagation says:

    When I saw this I thought it was going to be about “Bump-up” CDs where they specifically say that they’ll let you bump up your interest rate.

  8. missy070203 says:

    I am a local banker in my community and the ability to negotiate rates is almost purely based on policy… the bank I work for will not allow any person in the bank to offer rates above current promotional or advertised rates and we are not allowed to rate match on cd’s either…

  9. YNinja says:

    Good luck though…if your local branch manager is a tightass, it won’t happen. Usually the manager is more worried about getting chewed out over giving a .15% higher rate than actually retaining the customer and doing good things for him. SAD.

  10. Bs Baldwin says:

    Look for cd sales, most banks do not negotiate unless you are dropping atleast 6 figures. oh and look, none of the fcu changed their rates.

  11. Anonymous says:

    This is actually a part of my job at a bank (I work in the regional administrative office). I do profitability models which tell how profitable bumping the rate on a CD or IRA will be. Banks will negotiate with you to some degree, but not if your relationship will ultimately have a loss of 20% or more (especially in this environment).

    The best hope you have for negotiating rates on a CD or IRA would be if you are being offered a better rate elsewhere, and if you already have an existing, non interest-bearing relationship with the bank (such as checking accounts). Having loans with the bank also helps.

    I do disagree with the article, though, where it states that managers’ compensation is tied to the number of accounts they open. That is definitely part of the equation, but if they open many very unprofitable accounts, that will take a bigger toll on their compensation in the long-run. I also agree with YNinja… the manager may be a “tightass” who stalls you in getting a better rate, but they are not going to worry so much about giving over a good rate. Because rate bumps need to go to a higher office for approval before they can even offer the rate.

  12. furseekr says:

    I’ll agree with everything mac-phisto said in his (her?) first post. At the CU where I work, you can get higher CD rates if you have some kind of direct deposit and have new money. The new money requirement is waived if you’ve been a member for 10 years or more. But that’s just what’s on paper. We have leeway to match other institutions’ rates even without meeting these requirements. We’re definitely interested in having your whole ‘banking relationship.’

  13. furseekr says:

    Also, some institutions allow you to make additional deposits to existing CDs. This means you can get the same rate until the CD matures. If it’s allowed, it’s a great option since CD rates have dropped recently.

  14. MooseOfReason says:

    You could get a better CD rate if the Federal Reserve raised interest rates. Since it’s at 0%, it really has nowhere to go but up – or, you know, stay there.