Do banks really get customers to bite when they offer absurdly low cd rates? I can’t believe anybody would even be remotely interested in say a five year cd at igobanking for .35%. Hey, if you want to double your pleasure they also have a ten year cd at the same .35%. They do offer 1.75% on a seven year cd but for me to go that long the rate would have to be a lot higher than the Mendoza line.
I had a cd at Igobanking a few years ago with a decent rate and had a good experience dealing with them so not picking on them. I am just curious why even offer these rates if people do not buy. Unless people are buying them, then I would be interested to know WHY. In today’s market, unless it is for a very short term, I can’t see obtaining any cd under 1% when there are money markets/savings accounts that can offer virtually the same rate. I understand the cd would offer a guaranteed rate and many of the money market accounts have a limit on how much you can have to earn their top rate but for my own curiosity can anyone that owns a low rate cd explain their reasoning to me?