Making Your Money Work Harder: A Guide to the Best CD Rates

Exploring the World of Certificates of Deposit

Are you looking to make your money work harder? Certificates of Deposit (CDs) are a great option to secure solid returns while locking in your funds for a specific time. In this article, we’ll explore the world of CDs, the best CD rates, and how to maximize your savings with this low-risk investment option.

How CDs Work

CDs work similarly to online savings accounts or money market accounts in terms of offering great returns with zero risk. The difference is that CDs "lock your money up" for a specified period of time. To access your funds before the term ends, you’ll have to pay a penalty.

Benefits of CDs

Although CDs offer less liquidity than a regular checking account or savings account, you might get a higher rate of return with this financial product. This is especially true if you open a CD account with a longer timeline; for example, a 60-month CD instead of a 12-month CD.

Current CD Rates

According to the Federal Deposit Insurance Corporation (FDIC), national average CD rates range from 1.33% to 1.84% depending on the CD term, as of writing. However, many banks offer vastly superior CD rates to consumers who do their research. We’ve compared dozens of banks and financial institutions to find the best CD rates today.

Important Factors for Certificate of Deposit Accounts

When considering a CD account, keep the following factors in mind:

• CDs are for long-term savings. Since CDs lock your funds into the account for a specific term (usually 12 to 60 months), they aren’t ideal for money you might need to access in the short term.
• CDs offer security for your funds. CD accounts are a secure place to stash your money and earn interest, thanks to FDIC insurance.
• Check for CD fees. Most CDs charge fees if you need to access your money early. Make sure you understand these fees before opening this deposit account.
• Online banks might offer better rates. Although brick-and-mortar banks offer their own CDs, you might find better rates through online banks. Compare legacy banks and online institutions to find the best CD rates.

Best Certificate of Deposit Accounts – Reviews

We’ve selected the best CD accounts based on their rates, terms, and fees. Here are our top picks:

• PNC: Offers a variety of popular banking products, including CDs. Its CDs don’t require any monthly maintenance fees, and you can monitor your account at any time online or with the mobile banking app.
• CIT Bank: Known for its popular high-yield savings account, CIT Bank also offers an array of CDs with excellent terms. Its 11-month, no-penalty CD stands out since it offers an excellent return rate. There are also no penalties if you need to access your money early.
• Discover: With Discover, you can open a CD that lasts anywhere from three months to 10 years. There are no fees to open a CD, including account opening fees or maintenance fees, although the minimum opening deposit is $2,500.
• Marcus by Goldman Sachs: A popular online bank, Marcus by Goldman Sachs offers rewarding CDs. Terms range from seven months to six years, with a minimum deposit of $500.
• Synchrony Bank: We chose Synchrony Bank for our ranking due to its no minimum balance requirement and competitive CD rates. Its 15-day guarantee allows you to raise your rate if the advertised rate increases within 15 days of your CD purchase.

Conclusion

Investing in a Certificate of Deposit (CD) is one of the safest ways to grow your money. CDs offer low-risk investments with guaranteed returns, so they can be an excellent choice for those looking to diversify their portfolios and lock in higher interest rates. By considering the factors outlined above and comparing CD rates, you’ll be able to find the best CD account for your needs.

FAQs

1. What factors should I consider when looking for the best CD rates?

Some of the key factors you should consider when searching for the best CD rates include the length of the term, any penalties for early withdrawal, and minimum deposit requirements. You’ll also want to compare the annual percentage yields (APYs) of different products to ensure you’re getting a good return on your investment.

1. How often do CD rates change?

Certificate of deposit (CD) rates may fluctuate throughout the year as interest rates change. It’s important to keep an eye on current market conditions in order to maximize your earning potential by investing in CDs with higher rates.

1. Is it possible to get a higher CD rate than what is advertised?

Yes, it is possible to get a higher APY than what is advertised by banks and credit unions – especially if you are willing to negotiate or shop around at online banks that offer competitive CD rates. Additionally, certain banks may offer promotional offers or discounts that can result in even better returns on your investment.

1. What should I consider when comparing CD rates?

When comparing CD rates, consider the length of the term, penalties for early withdrawal, minimum deposit requirements, and the annual percentage yield (APY). The APY reflects the effective interest rate, including compounding.

1. Can I negotiate for a higher CD rate?

While advertised rates are set, some banks, especially online ones, may offer negotiation options or promotional offers. Shopping around and researching online banks could help you find institutions that offer competitive rates or special deals.

Author: www.goodfinancialcents.com

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