Late last week Synchrony Bank increased the rate on its 14-month CD by 40 bps to 5.65% APY. According to Synchrony Bank’s small print, the CD offer is available “until 11:59 PM Eastern Time on December 4, 2023.” This is the highest CD rate that Synchrony Bank has offered in its history, and it’s one of the highest CD rates from a well-established online bank. The rate is tied with BMO Alto’s 12-month Online CD rate (5.65% APY), and it’s higher than the top CD rates at Sallie Mae Bank (5.55% APY, 15-month) and at Barclays (5.50% APY, 12-month).
If you’re hoping to lock in today’s high rates on a long-term CD before rates fall, Synchrony Bank, like most of the major online banks, has been disappointing. Synchrony Bank’s long-term CD rates haven’t increased for more than a year. For the 60-month CD, the rate hasn’t increased since November 16, 2022, when the rate increased 29 bps to 4.30% APY. The rate then fell to 4.00% APY on April 13, 2023, and it hasn’t changed since. The 48-month CD rate has also remained at 4.00% APY since April 13, 2023. The 36-month CD rate didn’t fall in April. Its rate has remained at 4.30% APY since November 16, 2022. The 24-month CD rate has gone up slightly in the last few months, but not much. Its rate increased 5 bps to 4.35% APY on August 1st, and another 5 bps in September to 4.40% APY.
|24 Month CD
|36 Month CD
|48 Month CD
|60 Month CD
I was hoping we would see more rate hikes of long-term CDs when long-term Treasury yields increased to near 5% in October, but few online banks followed by raising their long-term direct CD rates. Instead of raising their direct CD rates, several online banks, including Synchrony, issued higher brokered CD rates. In late October, Synchrony Bank issued non-callable 5-year and 3-year brokered CDs with rates of 4.85% and 5.05%, respectively.
Now with long-term Treasury yields on the way down in November (the 5-year T-note yield has fallen from 4.67% on November 1st to 4.29% on November 28th), I’m not optimistic about higher long-term CD rates.
For the full list of Synchrony Bank online deposit rates, please refer to the rates section of our Synchrony Bank page.
Many thanks to DA reader, RichardW, for posting on this 14-month rate change in this DA Forum thread.
Synchrony High Yield Savings (HYS) and Money Market (MM) Accounts
Synchrony Bank’s HYS account has held steady at 4.75% APY since September 13th. It’s on the high side for the well-established online banks, but it’s far below the rate leaders and the target federal funds rate.
While the HYS has remained competitive when compared against the well-established online banks, the same can’t be said of the Synchrony MM account. The Synchrony MM rate is way behind the rates of other MMAs such as Ally Bank and Sallie Mae Bank.
|High Yield Savings
|Money Market Account
The High Yield Savings account has no minimum balance requirement or monthly service fees. An optional ATM card is available and can be used at ATMs and for making purchases with a PIN. Synchrony Bank offers an ACH bank-to-bank transfer service that allows customers to link up to five accounts at other banks (per FAQ - It used to be ten.) Once the link is established, the customer can initiate electronic deposits and withdrawals to and from those external bank accounts.
Besides the interest rate, the difference between the two accounts is that the Money Market has check writing abilities, while the High Yield Savings account does not. When you open the Money Market account, you can choose to receive checks, which should be received in ten business days.
Synchrony CD Features
The minimum deposit for Synchrony CDs and IRA CDs used to be $2,000, but it’s now $0. Synchrony’s CDs (including this 14-month CD) are also available as an IRA (Traditional and Roth) earning the same APYs, with the same funding requirements.
Synchrony’s FAQs describe several important features of the CDs. Below are a few FAQs on CDs that I thought would be worth mentioning.
One downside with Synchrony Bank’s 14-month CD as compared with its 12-month CD (besides the longer term) is an early withdrawal penalty (EWP) that is double in size (180 days rather than 90 days of interest). The full details of the EWPs are described in Synchrony’s FAQs:
Q: Is there an early withdrawal penalty for CDs?
An early withdrawal penalty may be assessed if you make a withdrawal prior to the CD maturity date, which is the last day of the CD term. The penalty is applied to the amount of principal withdrawn (no penalty on interest). The bank does not charge an early withdrawal penalty on a CD for the death of an account owner with proper verification.
- Terms of 12 months or less: 90 days of simple interest at the current rate.
- Terms of more than 12 months but less than 48 months: 180 days of simple interest at the current rate.
- Terms of 48 months or more: 365 days of simple interest at the current rate.
The EWP only impacts early withdrawals of principal. As described in the following FAQ, interest can be withdrawn at any time without penalty:
Q: Can I withdraw my interest from a CD?
You can withdraw interest paid during your CD’s current term anytime without penalty. You can transfer the interest to a Synchrony Bank High Yield Savings or Money Market Account or a non-Synchrony Bank account. For help withdrawing your interest, call us at 1-866-226-5638.
There’s one FAQ on the 15-day rate guarantee period that changed in 2018. This FAQ now reads as follows:
Q: Are there rate guarantees for CDs?
The Bank will give you the CD interest rate in effect on the day the CD was opened as long as we receive and process your opening deposit on or before 15 calendar days from the opening date. We will not go by the postmark date of a deposit. If we receive your deposit within the 15-day period and the current rate for your CD term is higher on the date we receive and process your deposit, the Bank will give you the higher rate. Your interest rate is locked for the term of your CD once we receive and process your deposit.
For IRA CDs, the bank will give you the interest rate in effect on the day the CD was opened as long as we receive and process your opening deposit on or before 60 calendar days from the opening date and you are actively participating in the account opening process. This means all appropriate paperwork must be completed and that funding or appropriate account funding documents must be provided.
The rate guarantee is important in a rising interest rate environment. According to this current FAQ, “If we receive your deposit within the 15-day period and the current rate for your CD term is higher on the date we receive and process your deposit, the Bank will give you the higher rate.” Previously, the FAQ stated that “if the bank rates go up during the rate lock period, the Bank will give you the higher rate.”
Headquartered in Draper, Utah, Synchrony Bank is an internet bank that offers its services and product line to U.S. citizens and “U.S. lawful permanent residents” who are 18 years or older, have a permanent U.S. residential address, and possess a valid Social Security number.
Synchrony Bank accounts can be opened online, but IRA and Trust accounts require paper forms. Funding an account can be done with an electronic funds transfer. This is done by providing Synchrony with the account number and routing/transit number of an external bank account. If Synchrony can’t automatically verify your external account, it’ll use a trial deposit system. Once the online application completes, Synchrony Bank will mail a welcome kit within 7 to 10 days. The welcome kit includes a signature card that must be signed and mailed back. In addition, the welcome kit includes a deposit slip. If you decide to fund the account with a check instead of an online transfer, a check must be mailed with the deposit slip.
The online application can accommodate up to four beneficiaries per account. Unlike some other financial institutions, Synchrony Bank does not require Social Security numbers for person beneficiaries: only name, address, and date of birth are necessary to add a beneficiary. Non-person beneficiaries can also be designated. Only equal allocations are allowed for the beneficiaries. Percentages cannot be specified. After your account is opened, beneficiaries can be managed online.
According to the CSR, there’s no hard credit inquiry that can ding your credit score. The CSR stated that they “only do soft inquiry to verify your identity."
Synchrony Bank has an overall health grade of “A" at DepositAccounts.com, with a Texas Ratio of 7.70% (excellent), based on June 30, 2023 data. In the past year, Synchrony Bank’s non-brokered deposits increased by $8.92 billion, an excellent annual growth rate of 15.86%. Please refer to our financial overview of Synchrony Bank (FDIC Certificate # 27314) for more details.
Synchrony Bank can trace its origins to a brick-and-mortar institution, the Monogram Bank, USA, which was established in Ohio in 1988. From 1989 to 2014, the Bank moved its headquarters four times and re-branded five times, with the current name change occurring in June 2014. Prior to the name Synchrony Bank, the Bank was known as GE Capital Retail Bank, reflecting its tie to GE Capital, its parent company. In January 2013, GE Capital Retail Bank acquired the deposit base and online deposits business of MetLife Bank, N.A.
Currently, Synchrony Bank is the 33rd largest bank in the country with assets in excess of $100 billion.
How the 14-Month CD Compares
When compared to similar length-of-term CDs tracked by DepositAccounts.com which are available nationally and have minimum deposit requirements of $10k or less, seven credit unions and three banks have a higher rate than currently offered on the Synchrony Bank 14-month CD. The following table compares the 14-month CD to the two highest-rate CDs from credit unions and to the two highest-rate CDs from other banks.
The above information and rates are accurate as of 11/29/2023.
To look for the best CD rates, either nationwide or state-specific, please refer to our CD Rates Table page.