How do I Choose a High Yield Certificate of Deposit?

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  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 25 January 2020
  • Copyright Protected:
    Conjecture Corporation
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Choosing the best high yield certificate of deposit may require a bit of work on your part. You may start by researching and comparing the rates offered with different certificate of deposits. You may also compare the terms of the certificate of deposits you are considering, their maturity dates, and the penalties for early withdrawal. Additionally, you may consider whether or not a certificate of deposit account that interests you will be insured before you make a selection.

When you want to choose the best high yield certificate of deposit, you may do well to research and compare rates. One of the most convenient ways to do this involves using the Internet. You can find websites that provide comparison tables for certificates of deposit on a national or local level. You may also find websites that offer a comparison of a mixture of both national and local rates. These tables can provide a good starting point for choosing a high yield certificate of deposit.


As with any type of certificate of deposit, it is important to consider the penalties for early withdrawals. In most cases, you will be required to keep your certificate of deposit for a specific amount of time to avoid penalties. You can withdraw your money before the term ends, but you will then have to pay the penalties described in the certificate of deposit's documentation. As such, this may not be the best savings option for you if you will need the money in the short term or do not have other sources of funding for dealing with emergency situations.

It is also important to learn the terms of a high yield certificate of deposit before you purchase it. This may help you avoid unpleasant surprises later. For example, a bank may have the right to terminate a certificate of deposit early in the event that interest rates fall. You may decide the best high yield option for you is one that does not require you to accept this risk. On the other hand, however, you may decide that a high yield certificate of deposit is worth the risk if the interest rate is high enough.

You may do well to ensure that a high yield certificate of deposit will be insured before you commit to it. Often, certificates of deposit offered by banks are insured up to a certain amount of money. This means if the bank goes out of business, you won’t lose the funds that were in an insured deposit account. Deposit insurance terms may vary by country, however.

To choose the best high yield deposit, you may also consider the maturity dates of those that interest you. In general, later maturity dates lead to higher yields. As such, the high yield certificate of deposit that provides the best return may also be the one that requires you to leave your money with the financial institution for longest.



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