We thought we’d cover PNC Bank’s CDs this week, despite them being offered with all-time low APYs, because they are being packaged with features that stand to be very beneficial to consumers when the interest rate environment finally begins to climb.
Our favorite deposit products offered by PNC are there “Step Rate” CDs and their “Variable Rate” CDs due to the advantages they provide in an increasing rate cycle.
With the “Step Rate” CDs PNC bank will raise your APY every 6 months to a predetermined interest rate. They will also give consumers the chance to make penalty free withdrawals at this time as well.
Their “Variable Rate” CDs also allow for a rate increase during an upward interest rate environment. The rate increases on these products are directly correlated to the 3 month treasury bill.
Despite these interesting features, we expect PNC Banks deposits to remain fairly unpopular until 2015 (FED’s latest time-frame of rate hikes).
Income investors whom are relying heavily on interest rates will likely opt for products featuring slightly higher yields such as the ones found from online banks (view charts comparing these products below), but will likely switch to ‘step-up’ type deposit products at the first sign of rate hikes.
PNC Bank is the fifth largest bank in the US by deposit size with a little over $177 million in overall deposits. In the past, PNC bank has offered many promotional CD rates with exceptional APY’s however in 2012 their rates have struggled to keep up with the national average.
The CD rates we’ve compiled below were gathered from PNC Bank branches in California. They come with a minimum deposit requirement of $1,000 and are FDIC insured.
PNC Bank CD Rates 2013 Edition:
(Rates accurate as February 2013)