Why aren't major banks raising CD rates? (loans, borrowing, mortgages)

[Preston3124]

Originally Posted by FrannyBear

Was this a brokered CD? Care to share where it wa purchased? Thanks.

Also is it callable? All the 10 year CD’s I’ve seen on the Fidelity site are callable which means if rates go down they can pay you the face value of the CD and basically refund your money. I only buy call protected CD’s.

[loves2read]

Originally Posted by thrillobyte

Wells Fargo CD: 0.01%


Chase CD: 0.02%

Because they don’t have to
They can raise their loan rates/credit card rates but keep their CD/saving accounts as low as they want

And make even more money for themselves

[bpollen]

Originally Posted by thrillobyte

Wells Fargo CD: 0.01%


Chase CD: 0.02%

Ally Financial has raised theirs. The rates were almost nonexistent before. Now:

12mo - 1.5%
18mo - 1.75%

But what's odd is that the 3mo & 6mo rates are LOWER than its regular savings rate, which is now .90%.

It also has a "raise your rate" CD. If you get a 2yr CD, the rate is 1.75%, but you can raise the rate to the going rate once in that 2 yr term.

We're still losing money because of inflation, but the rates are going up at least somewhat.

[bpollen]

Originally Posted by thrillobyte

Wells Fargo CD: 0.01%


Chase CD: 0.02%

Wells Fargo CD @ 0.01% is only for 3 months. I guess that's why. My bank, Ally, also has lower rates for its CD less than one year, but not THAT low!

Ally Financial's 3 mo. CD rate is 0.50%. (it's an online bank. They don't have the expense of physical locations.)

[thrillobyte]

Originally Posted by loves2read

Because they don’t have to
They can raise their loan rates/credit card rates but keep their CD/saving accounts as low as they want

And make even more money for themselves

Yeah, but aren't people going to see the FED raising the prime and say, "Hey, I should be getting 2% on my money. I"m going to take my money out and put it somewhere that will pay me a better rate"?


B of A prime is now 4%

[Willy702]

The banks don't want deposits right now, it's pretty simple supply and demand. The big banks have a lot of this cash the Fed has created, for lack of a better word, and in Quantitative Tightening they are going to absorb some of it back. The Fed wants less money in the system so the big banks don't want more on their balance sheets. Last I read the big banks basically have $3 trillion in net deposits the Fed holds so as they get them to remove their funds thats money the banks dont have a real use for.

There is a sense of obligation to offer CDs to customers so yeah here is your 0.01% which a sane customer would understand as please take your money elsewhere. Credit Unions and community banks are not really impacted by the Fed's moves to reduce money in the system so they pay more because they remain in the business of taking deposits and lending them out at a spread.

[foulball]

Originally Posted by FrannyBear

Was this a brokered CD? Care to share where it wa purchased? Thanks.

Yes, brokered CD via TDAmeritrade.

[foulball]

Originally Posted by Preston3124

Also is it callable? All the 10 year CD’s I’ve seen on the Fidelity site are callable which means if rates go down they can pay you the face value of the CD and basically refund your money. I only buy call protected CD’s.

Yes, callable in a year. I've always been OK with bonds or CDs being called. I can always find something to do with the funds that are returned.

[tickyul]

Some banks a jacked to the gills with deposits, they have no need to pay for more.

Well Fargo is still under a Fedgov-ordered asset-cap, so I assume that has something to do with it.

[JohnMuirTrailNirvana]

My local credit union is advertising 5 year CD's with a 3.01% rate. I am tempted to park the $500 minimum in one and see if rates go further up this summer.