As interest rates go up, more people are eyeing CDs – possibly multiple ones in a strategy called ladders – as where they want to put their money, according to an article in the New York Times.
“CDs are what most customers are interested in because they want the protection of FDIC insurance compared to other investments,” said Randy Laycock, Lubbock National Bank vice president.
“We have special offering – 2.25 annual percentage yield for 13-month CD,” said Laycock, which is well above the 12-month CD 1.25 APY.
CD rates were low for a long time after the economic downturn. But the Federal Reserve has gradually raised its benchmark rate over the past few years and yields have been moving up, said the article.
If people want multiple CDs, they can buy them over different periods so they mature at different times.
“It’s time to take CD ladders out of the attic, Chris Horymski, a senior research analyst at MagnifyMoney told the Times.
Laycock said this special rate is just one benefit of Lubbock National Bank now being owned by Amarillo National Bank.
“With our ownership change we can be more aggressive in deposit pricing. Our customers will see many more of these type of opportunities,” he said.
Laycock said another goal of the special CD offering is to bring more customers to Lubbock National Bank.
“We want them to get used to our style of banking, meet our personal bankers and officers and hopefully want to do more with us,” he said.