We regularly monitor rates from over 200 banks and show the highest CD rates. Certificate of Deposit rates are fixed for the term of the CD. You may be penalized for withdrawing funds before your certificate of deposit matures. The highest CD rates usually require longer terms. Bank and credit union CDs are insured up to $250,000 per depositor by the FDIC or NCUA.
Certificate Of Deposit Rates
A Certificates of Deposit (CD) is a financial product usually offered to consumers by credit unions, banks and thrift institutions. When you buy a CD, you invest a fixed amount of money for a fixed duration of time, and in exchange the issuing financial institution pays you interest, usually at regular intervals. When you redeem your CD, you get the money originally invested, as well as any accrued interest. However, if you choose to redeem your CD before maturity, you might have to forfeit part of the interest earned. CDs with longer maturities pay higher rates than CDs with shorter maturities. When you leave your money with the bank for a longer time, they reward you. However, the economy in general determines interest rates, which in turn influences the CD rates. Rates may rise or fall. You will need to decide whether you should tie up your money long term for higher rates or whether you should first wait and see if rates will improve in the near future.
You will need to shop around to get the best CD rates. Check your local credit unions and banks to see if anyone is having a ‘sale’. Quite often, you will find an institution which needs to get deposits in the books fast, and are therefore offering the best CD rates obtainable locally. These offers are usually advertised in the newspapers or banners. Another ideal place to shop is on the internet. Online banks offer some of the most favorable CD rates that you can find. They have lower overheads than physical banks and thus can pass some savings on to you. Another place to shop is in a brokerage firm. Though you may not be aware, your financial advisor might have some of the most favorable CD rates obtainable. Advisors can get access to brokered CDs, which are usually sold in larger blocks. However, make sure you consult someone trustworthy and that you understand the risks. It can be expensive to pull out of a brokered CD before maturity. Personal finance blogs on the internet are another good source for ideal CD rates. Finally, financial institutions present the best CD rates to their valued customers. To qualify for their favorable CD rates, you might need to satisfy a minimum investment requirement. You need to find out how much investment is required to get a higher rate. If it is within your means, take advantage.