As of today, the national average interest rate for savings accounts stands at only 0.4%. To potentially enhance your earnings, consider placing your money in a high-yield certificate of deposit (CD). Many financial institutions are even offering promotional CDs that boast rates exceeding the top CD rates available today.
Promotional CDs are often offered by banks and credit unions seeking to attract new customers. These accounts generally feature higher rates compared to regular CDs but are available for a limited duration.
The advantage of these accounts is that once you open one, your interest rate is fixed for the entire duration of the term, securing your interest income. This can be especially beneficial if there are indications that rates may fall soon.
Find out more: How to enhance your interest earnings after a Fed rate cut
Below is a summary of some of the most attractive promotional CD rates available this August.
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7-month CD: 4.75% APY
Dort Financial CU is currently providing a 7-month promotional CD that requires a minimum deposit of $5,000. The base interest rate is 4.25% APY, with an extra 0.25% available by opening a Boost Checking account and setting up direct deposit in the first 90 days. Additionally, another 0.25% can be earned by obtaining a Visa credit card, reaching a total of 4.75% APY.
Dort Financial’s membership includes:
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Individuals living, working, studying, or worshipping in Michigan or in Palm Beach, Martin, Hendry, and Broward counties
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Immediate family members of current members
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Any legal entity largely comprised of the same general group as the credit union’s membership stated above
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Spouses of deceased members if they enroll before remarrying
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7-month CD: 4.4% APY
Flagler Credit Union, affiliated with Dort Financial, is also offering a 7-month promotional certificate with an APY of 4.4% and a minimum deposit of $5,000.
Membership is available to those living, working, studying, or worshipping in Michigan or in Florida’s Palm Beach, Martin, Hendry, and Broward counties.
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3-month CD: 4.36% APY
OMB Bank has launched a high-yield CD offering up to 4.36% APY for a 3-month period, requiring a minimum deposit of $1,000.
Though OMB Bank operates in Missouri and Kansas, applications for CDs can be submitted online from any part of the U.S. Alternatively, one can apply in person at an OMB Bank branch.
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6-month CD: 4.30% APY
Global Innovations Bank, founded in 1899 and located in Minnesota, is currently promoting a 6-month CD that offers an APY of 4.30%, requiring a minimum deposit of $5,000.
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12-month CD: 4.25% APY
For a limited duration, Compass Federal Credit Union is offering 4.25% APY on a 12-month CD with a minimum opening deposit of $10,000.
Membership is open to anyone living, working, studying, volunteering, or worshipping in several communities within Miami-Dade County in South Florida. Family members of current Compass Financial members are also eligible to join.
Find out more: 7 credit unions open for everyone
CD rates provided by CD Valet. Rates are accurate as of the publication date but can change at any time based on the financial institution’s discretion. Always verify current rates and account terms directly with the institution before committing.
If you are considering taking advantage of a promotional CD, there are key factors to remember before you tie up your funds.
Promotional CDs may demand a higher minimum investment than standard CDs
Many promotional CDs often have higher minimum deposit requirements than standard CDs. It’s crucial to read the terms and conditions carefully and ensure you have sufficient funds to meet the opening balance demands.
Find out more: Check out these 8 banks with no minimum deposit CDs
Most CDs are offered in standard terms of three to six months (e.g., 6-month CD, 9-month CD, 12-month CD), but promotional CD rates may offer unique terms like seven or fourteen months.
This may work out fine for you, but if you have a specific savings timeline, ensure that the CD’s term coincides with your plans.
Find out more: Understanding CD terms: Choosing the right duration for your funds
Promotional CDs are typically limited-time offerings. After maturity, if you choose to transfer those funds into another CD with the same duration, it’s unlikely that you’ll receive the same interest rate.
<pHence, if your strategy is to benefit from a lucrative short-term rate, a promotional CD could be a sensible choice. Just keep in mind that these appealing rates are transient.
