Merchants Bank, N.A. ($1.65 million, Winona, Minnesota) is attracting deposits from Boomers and other rate-shopping markets with a limited-time “Growth Spurt” CD special.

Here are the details of the CD offer: 

25-Month CD Term—

  • Earn 1.28 percent APY with a minimum deposit of $10,000 of new money
  • Earn 1.40 percent APY with a minimum deposit of $25,000 of new money

45-Month CD Term­—

  • Earn 1.58 percent APY with a minimum deposit of $10,000 of new money
  • Earn 1.70 percent APY with a minimum deposit of $25,000 of new money

Supporting loan growth

Sue M. Savat, SVP/Chief Financial Officer, explains that the commercial bankers at Merchants have done a tremendous job at growing commercial loans by double-digit percentages over each of the past three years.

“So one of our business initiatives this year was to grow deposits to support our loan growth,” she says.  “We did a detailed competitive analysis of Certificate of Deposit offerings within our markets, and continue to track frequently.”

She says the bank chose terms that would be attractive to customers in their short- and long-term planning, and would provide stable deposits for its balance sheet.

“Rates we chose were slightly higher than what we found during our competitive analysis.”

According to Savat, the 25-month term is marginally more popular.  “But we’ve seen good mix between the two terms.  Even though the 45-month is an extremely attractive rate, people still seem reluctant to tie up their funds for more than a couple of years.”

She says the bank’s markets typically offer one or two CD specials based on market competition. 

“This is the first time in recent history we have offered a company-wide CD special to attract new dollars.  We are pleased with the new deposits generated to date.  Our customers have responded well to the CD terms and we are generating the deposit growth desired to support our loan growth.”

Employee conversations 

She says employees are assisting customers in discussions about CD laddering and what terms would be most beneficial for each individual customer. 

This CD special is simply another tool in their tool box to serve our customers and build relationships.”

The bank is also using the following channels to promote its CD specials, based on its markets and demographics:

  • Newspaper
  • Radio contract spots were switched to CD (no additional radio was purchased)
  • Lobby digital signs
  • Drive-up signs
  • Customer handouts
  • Website feature ad
  • Outdoor billboard
  • Television billboards
  • Facebook targeted ads
  • Corporate LinkedIn posts
  • Digital ad contracts in specific markets were switched to CD ads
  • E-mail campaign with retargeted Website ads in one market
  • Online banking ad
  • Consumer and Business eNewsletter articles

“We have not used all channels in all markets,” says Savat.  “We are tracking response rates to determine which advertising we continue running and which advertising we have decreased or eliminated completely.”

The bank began offering the 25-month and 45-month CDs on June 10th. 

“At this time, we anticipate the special offering running through the middle or end of September, but it could end earlier or be extended depending on our balance- sheet position,” says Savat.

“Future CD offers and special pricing, just as regular CD pricing, will be based on competitive analysis and our need for deposits.”

Source:  Sue M. Savat, SVP/Chief Financial Officer; Mary R. Gordon, Vice President/Director of Marketing, Merchants Bank, N.A., Winona, MN; phone (507)494-0573; e-mail

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