Will A Bank Or CU Freeze A Rate While Funds Are Being Transferred?

John Sears | Mar 19, 2016 | 67 posts since 2015

I had a rude shock yesterday, I set up a Savings Account with Synchrony to move funds when my Ally Bank 5 year CDs expire end of May. I thought they could idle there a little, possibly going into Synchrony if they had a good rate.

I went looking for the bank's profile later in the day and couldn't find it; it had dropped from 2.05% to 2.0% on 5 year CDs within hours.

The way things are going now, it's conceivable that the rate could drop big time while the money is in transit.

Any suggestions?

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Answers

Inflation_Hawk | Mar 20, 2016 | 107 posts since 2016

These days I never open a new CD by transferring the proceeds to a CD at another instituion. Most of the promotional CD rates come with a disclaimer that they are subject to change without notice. So, I just create a savings account at the new institution and dump the money into it. Then, if the CD rate at the institution still is favorable by the time that the money makes it into the savings account, I just transfer the money into a CD at the new institution. This can usually be done the same day. It doesn't solve the problem having a good rate disappear. However, it does give you the option of not funding the CD if the rates at the new institution drop lower than what you can get somewhere else.

John Sears | Mar 20, 2016 | 67 posts since 2015

Probably one of the more helpful comments I've read, thanks!

tck | Apr 1, 2016 | 15 posts since 2016

Thanks for sharing. I agree, that is a good practice.

paoli2 | Mar 20, 2016 | 2,641 posts since 2011

I have had banks in the good "old days" agree to hold a certain rate for me but only if I made a concrete purchase with them beforehand. Some would open the new CD I wanted over the phone and agree to give me a certain amount of time to ACH or wire the funds to them. I don't think you will find one who will just "hold" a rate for you these days since as you realize rates are changing even overnight. They have to have something to show you have actually put a purchase through for the CD.

What I like about our brokerage accounts is that when one of our CDs in the account is ready to mature, I can put in a purchase for another one for the same amount even before the matured CD funds go into their Cash Reserves. It is called a "pending" purchase but I don't think you will find banks that work like this. If I were you, if I found a bank with the rate I needed, I would call a manger and just ask them if they can work out something with me so that I can get the rate and assure them I would wire the funds to them as soon as they were available to me. If yours are in a savings account, you can wire them immediately. The $15.00 domestic wire fee which most banks I use charge is worth it to me if I can lock in a 2% 5 year CD rate these days. You may luck out and find a bank with a good rate who will do an ACH withdrawal of the funds for the new CD for you which is usually free if you decide to do it that way.

Bozo | Apr 4, 2016 | 1,375 posts since 2011

You might want to consider State Farm Bank. You can purchase a CD through your local agent, and the rate is locked.

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