CD's - What % amount to change banks?

[Drake3287]

Like many others, I have several Money Market or CD accounts paying 1% plus an assortment of other investment's including a pension.

My question is, on let's say a $100,000. CD that's currently making 1% (or $1,000. annually). At what higher % of a rate does it take you to change Banks/Savings & Loan? For example many are now offering 1.25% which would be a $250. a year increase.

I hate going through the process of closing one account for another, but at the same time if it takes me a hour to do the process. Is that hour worth $250.?

I'm guessing with rates slowly increasing this will be a common situation.

[Braje]

What is it going to cost you to close the CD early?

[Drake3287]

*Based on the CD coming due or Money Market funds that are available.

[disneysteve]

Is that hour worth $250.?

I think most people would happily do an hour of work to earn $250.

[scfr]

Looking for the "best deal" on bank products is very important to me. I consider it part of my "job" of managing my household's finances.

I always shop around for the best available rate(s) on CDs and savings accounts. In addition to interest paid, I also look at the bank or credit union's financial strength and read customer reviews. So I don't necessarily go with the very highest interest rate; I'm looking for what I think I will be happiest with overall.

For CDs, the decision to change financial institutions is easy because the rate is going to be locked in for the duration of the CD. For savings accounts, the decision to change is a bit more difficult because unless there is a rate guarantee, I know that the rate can change at any moment.

Right now the tougher decision for me, given the slow rise in interest rates, is not whether to change financial institutions, but what is the proper length of a CD.

[StormRichards]

I think this is an excellent thread topic. Personally we do not own or shop for CDs, but have pondered the same question for our savings account. Many years ago we used to switch whenever we could find a better deal. For several years now, we honestly haven't paid much attention to it because of the low rates. We like CapitalOne, formerly ING, so if they are at least near the top then we probably won't switch.

[Drake3287]

To be honest, I just get tired of running across the street to the next bank for a 1/4% or so. I know $250. is $250. but I still hate it. Why they won't match %'s I'll never know.

Couple of years ago I was at one bank with a $100,000. CD that was coming due and the bank right next door had a 1/4% higher rate. I almost begged the bank to keep me from going next door. They simply didn't care. For the most part none of these banks really care about deposits, only loans.

I have one in an online bank (Capital One) so that at least makes it a little easier. Just not sure if I want all 3 of my accounts to be at online only banks.

[snafu]

Why hold CDs when a good, low MER, Bond Fund makes about 5% with no penalty to move if facts support change. Change merely requires a few computer minutes.

[scfr]

To be honest, I just get tired of running across the street to the next bank for a 1/4% or so. I know $250. is $250. but I still hate it. Why they won't match %'s I'll never know.

Couple of years ago I was at one bank with a $100,000. CD that was coming due and the bank right next door had a 1/4% higher rate. I almost begged the bank to keep me from going next door. They simply didn't care. For the most part none of these banks really care about deposits, only loans.

I have one in an online bank (Capital One) so that at least makes it a little easier. Just not sure if I want all 3 of my accounts to be at online only banks.

I agree that it's not prudent to keep all funds in online only banks. I keep some funds at a bank with a local branch even though I earn a bit less in interest.

As far as getting tired of rate shopping, I think the banks get a lot of business because of consumer inertia. I choose to fight it.

[disneysteve]

I agree that it's not prudent to keep all funds in online only banks.

Why? If the accounts are legit, FDIC-insured, what difference does it make?

[scfr]

Why? If the accounts are legit, FDIC-insured, what difference does it make?

I didn't write my post with the correct emphasis. I meant to say that I don't think it's prudent to keep ALL your funds ONLY in on-line banks. I have on-line only accounts, and yes, I believe they are safe if FDIC insured.

I do think it's also very important to have access to one brick & mortar local bank branch (immediate access to cash being the most important, but also services such as safe deposit box, notary & medallion signature guarantee, and cashier's checks).

[disneysteve]

I didn't write my post with the correct emphasis. I meant to say that I don't think it's prudent to keep ALL your funds ONLY in on-line banks.

Ah. I agree with that. Sometimes you do need an actual branch to conduct transactions. It doesn't happen often but at least 2 or 3 times each year I have some need to go into my local branch to get something done.

[Nutria]

I didn't write my post with the correct emphasis. I meant to say that I don't think it's prudent to keep ALL your funds ONLY in on-line banks. I have on-line only accounts, and yes, I believe they are safe if FDIC insured.

I do think it's also very important to have access to one brick & mortar local bank branch (immediate access to cash being the most important, but also services such as safe deposit box, notary & medallion signature guarantee, and cashier's checks).

Lucky for me that Capital One has branches in my city.

My checking and "working savings" accounts are with Chase, though, since they are the latest owners of local S&L where I opened accounts 40 years ago. Very little of my money is kept there permanently, though, since their interest rates are abysmal. At EOM, I just transfer a (big or small and sometimes negative, depending on needs) chunk from Chase to CO360. From there, I might open a CD at CO360, Synchrony or Ally.