Capital One CD rates

[almost_there]

Thinking about getting a CD. Since I already have a savings account with Capital One, I looked at their offerings first.
The below link has the CD rates for Capital One. What seems unusual to me is that their best rate is for a 1 year CD. Why would a 1 year CD have a rate better than their longer term CDs? Is there a catch somewhere that I am missing? I always thought the longer the term the better the rate?? Why would someone tie up their money for a longer period at a LOWER rate?

https://www.capitalone.com/bank/cds/...d_cdratesterms

[GrayHare]

Probably because they expect long term rates to be lower. Beware Capone's CD breakage policies, some take more than just earnings.

[njhowie]

Quote:

Originally Posted by almost_there What seems unusual to me is that their best rate is for a 1 year CD. Why would a 1 year CD have a rate better than their longer term CDs? Is there a catch somewhere that I am missing? I always thought the longer the term the better the rate?? Why would someone tie up their money for a longer period at a LOWER rate? https://www.capitalone.com/bank/cds/...d_cdratesterms

Banks frequently provide promotional rates on different maturity CDs - happens all the time. You participate in the CD & MM Rates thread - we see it all the time.

A couple months ago I picked up a 18-month 3% CD from a credit union. Rates for every other maturity, both shorter and longer were lower.

[pb4uski]

2% for a one-year CD is pretty good.

[Carol1862]

I also think some people get lazy. The $ comes due in a year and they just let it roll over. Perhaps they check around and other institutions aren’t offering a great deal to make it worth switching over.

[Texas Proud]

The bank has to manage its liabilities with its assets... they could have a bunch of longer term deposits and want shorter term...