Dedicated to Deposits: Deals, Data, and Discussion

Negotiating Higher CD Rates

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This Bankrate article reports on a study that it conducted in negotiating higher CD rates at banks and credit unions. It called 30 institutions including the 10 largest banks, the 10 largest credit unions and 10 community banks. As you might expect, community banks were the best place to negotiate. One interesting finding was that none of the 10 credit unions was willing to negotiate. I would suspect that the credit union CD rates were much higher with rates set without room for negotiations.

As you might expect, it's becoming more difficult to negotiate a higher rate in this current environment. The article claims the banks' spread has been cut in half so there isn't as much room to negotiate. The article also covers other issues that make banks less likely to negotiate.

I've covered this issue in this 2007 post. Here are a few tips to negotiate a better CD rate. If you have other tips or examples of successful negotiations, please leave a comment.
  • It's unlikely that you can negotiate a rate increase of more than a quarter percent.
  • Don't give up early. Request to speak with other representatives or managers. Branch managers often have authority to negotiate.
  • The more money that you're going to deposit, the better chance of receiving a higher rate.
  • Bring evidence of higher rates at the bank's competitor
  • Successful negotiations are more likely at banks where you have a long term relationship that includes other deposit products, services or loans
  • Banks are typically only willing to negotiate on their standard rates and not on their promotional rates.

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Comments
3 comments.
Comment #1 by Anonymous posted on
Anonymous
I have not found promotions to be a deterrent to negotiating rates. More important issues are the amount of deposits in question, evidence of competitive gap and desire of bank for deposits.

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Comment #2 by Anonymous posted on
Anonymous
I think rates should be negotiable like haggling over the price of a car or shopping for an airline ticket. Not everyone pays the same price for a given car model or seat on a plane. Overseas, you can negotiate with street vendors when buying any item.

1