A certificate of deposit (CD) is a deposit account that works much like a savings account, with a few exceptions. In fact, taking advantage of current CD rates with a certificate of deposit account can help you grow your savings faster, while keeping funds safe and secure.
The best CD rates tend to be higher than savings rates in order to provide incentive for account holders to keep their money on deposit longer. While you can usually withdraw your money from a savings account whenever you want, certificates of deposit require you to agree to a fixed term – anywhere from six months to several years – during which you aren’t supposed to withdraw your money. In return for agreeing to the term, you are rewarded with the best interest rates.
There are many different types of certificate of deposit accounts, all with different rates. Different certificate of deposit terms will be associated with different interest rates, so it’s important to know what type of account suits you best before you begin to compare CD rates.
Generally, the most popular CD interest rates are 6-month CD rates, 12-month CD rates, 2-year CD rates and 5-year CD rates. Additionally, if you have an exceptionally large amount of money you want to invest in a high interest CD, you may be able to take advantage of jumbo CD rates, which tend to be slightly higher than regular bank CD rates.
Certificate of deposit rates can vary widely, from practically nothing at all to highly competitive. Usually, the key to getting the best CD rates is by choosing a long term CD– the current CD rate on a 2-year CD will almost always be higher than that on a six-month CD. However, it’s important to note that the highest CD rates aren’t always the best interest rates on certificate of deposits.
That’s because while it might make sense for one person to lock in their money to a long-term account and get a high interest CD rate, it might not be for you. Liquidity is something you should keep in mind when choosing an account, because withdrawing from bank CDs early usually results in a penalty of some or all of the interest earned. Picking highest CD rates within the term that best meets your needs will be the best choice.
Just about every bank and credit union in the country offers some type of certificate of deposit account, which makes it tough to compare CD rates and find the best ones — there are thousands of options! That’s why we developed our CD interest rates table, which collects CD interest rates from local, national and online financial institutions across the nation, making the best CD rates easy to find no matter where you live.
Rather than looking up individual banks and credit unions and spending hours trying to find the best CD rate currently available, you can check out the rates table (which lists certificate of deposit rates in descending order) and see an up-to-the-minute listing of current CD rates from local and national financial institutions.
A Certificate of Deposit or CD is a special account offered by most banks to help consumers save more money than a standard account. CDs are similar to savings accounts in that they are insured and thus virtually risk-free because they are insured by the FDIC (Federal Deposit Insurance Corp).
They are different from savings accounts because a CD account has a specific, fixed term anywhere from a few months to a few years. The Interest Rate is also typically fixed and can often be higher than other savings account because a consumer is committing their money for a longer time to the bank, and the bank can use that money to lend and make loans.
Fixed interest rates are common, but some banks offer CDs with various forms of variable rates and special offers as well.
Do you have money in the bank that isn't earning you any interest or very little interest? Have you thought about investing your money in the stock market, but decided not to in the end because you don't want to risk losing all your hard-earned money?
More people are investing in Certificate of Deposits (CD) these days and are finding that high CD rates are a great way to build their personal financial wealth without all the risk. Remember, time is money; get started on a CD account today.
You definitely don't need to be a financial expert to build your wealth - the following articles will show you how CDs work and strategies to build your wealth.