By in Saving

“It’s learning how to negotiate to keep both sides happy – whether it’s for a multi-million dollar contract or just which show to watch on TV, that determines the quality and enjoyment of our lives.” Leigh Steinberg 

Continue reading and find out who won during the NEGOTIATION for a higher interest rate at my bank.

Yesterday I talked about how I left a ton of cash in a LOW RATE account without realizing that even a bit over a 1% interest rate is better than a close to 0% return. I went on to discuss my concerns about withdrawing invested funds from some of the internet banks. Next, I related my attempts to match the internet interest rates at my local branch. I left off with the NEGOTIATION.

The importance of this conversation goes beyond just THIS SITUATION, but transfers across many contexts. Negotiating for a better price whenever possible can save you thousands of dollars per year. In fact, at the end of this article I provide a list of other “negotiating” links.

Recap from Yesterday……

Step five: Called the 800 number of my existing bank and asked what type of rates they could offer on my cash. Of course the rate was not the high 1.35%  of the internet banks’ but the customer service representative said they had a promotional 1.1%. In order to avoid opening a “new” account at my bank, I must visit the branch and they would apply the promo rate to my existing account.

Step six: Not so easy. This promo rate was NOT AVAILABLE FOR EXISTING FUNDS, just new funds…….

Step seven: NEGOTIATION TIME! Watch and learn:


 Me: I like this bank, have been with you a long time and do not want to open another account. I know you don’t want to lose my business either.

Bank associate #1: Yes, we want to keep you as a customer. Let me check out our promotional rates. Oops, I’m not authorized to give you a promotional rate, let me  introduce you to someone who can.

Me:  I like this bank, have been with you a long time and do not want to open another account. I know you don’t want to lose my business either. The individual from the bank 800 number said you could give me 1.1%. I would be willing to accept that rate to avoid the hassle of opening a new account, even though I can get 1.35% on-line.

Associate #2: Unfortunately, I can’t give you that rate and I need to call corporate for an authorization. I will call you within the next day or two.

What do you think happened?

One day later…. Ring ring……the call came.

Associate #2: Corporate has authorized your account for the promotional rate of 1.1% for 3 months.

Negotiating Summary


I love to negotiate and am one of those who tries to negotiate a better price whenever possible. Here’s a simple interpretation of how this negotiation succeeded:

  1. Understand who has the upper hand. In this case, I did because I had the money and the freedom to move to another bank. If you didn’t have much money, or had not been a valuable customer, the bank would not care if you stayed or left.
  2. I informed the bank of what I brought to the table; money and longevity.
  3. I empathized with the bank, I understood their position; “You don’t want to lose me as a customer.”
  4. I explained clearly what I wanted; “The promotional rate that I was promised on the phone of 1.1%”
  5. I was courteous and understanding, but firm.
  6. In every negotiation, consider how both parties can leave SATISFIED. In this case, the bank was satisfied because they kept my money and made me happy. I was satisfied because I didn’t have to go through the inconvenience of opening a new account.

Historical Perspective

I would be remiss if I didn’t mention the humor in fighting for a “high” rate of 1.1%. For those younger readers, the interest rate climate of today is the lowest in decades and far below recent historical averages in the 3% – 4% range for bank money market accounts. It is with that perspective that I chuckle that 1.1% is seen as a high interest rate. For me, this was an important financial activity to maximize the return on our cash. One thing my longevity in the financial markets has given me (other than a few crows feet 🙂 ) is the knowledge that every environment will change at some point. Thus, it is wise to focus on making the best financial decisions for not only your personal situation, but for the present economic scenario. And of course, when saving for retirement, you won’t make much progress with a one percent return!

Do you regularly negotiate to achieve better returns? What is your take on this story? How are you coping with the low interest rate environment?  


Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Practice negotiating to build up your confidence. Start with something small, and go on to bigger challenges. Strong negotiation skills can definitely increase your wealth in life.

image credit: US Mission


  • Free From Broke – Sure Fire Tips for Negotiating Your Credit Card Debt
  • Car Negotiation Coach-How to Systematically Negotiate a Low Car Price
  • Foreigner’s Finance’s – How to Negotiate Overdraft Fees
  • Redeeming Riches– Negotiate Your Home and Auto Insurance
  • Canadian Finance Blog – How to Negotiate a Deal