How do I get the Best CD Rates?

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  • Written By: Amy Hunter
  • Edited By: Andrew Jones
  • Last Modified Date: 27 February 2020
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To find the best CD rates, shop around before investing. Traditional banks, including the one where you currently bank, online banks, and brokerage firms all offer certificates of deposit. Contacting more than one institution allows you to find the best available rate. The interest rate paid on a certificate of deposit is referred to as the APY, or annual percentage yield.

Even the best CD rates are lower than the interest paid for other types of investments. CDs are insured by FDIC, making them one of the safest types of investment. This also means that the best CD rates are lower than rates in mutual funds and other riskier choices. While low, the interest paid on a CD is higher than that paid on a savings account, however the money is just as safe. The drawback is that you cannot access the money in a CD until it matures, without paying a penalty.


Local banking institutions often hold sales, which are periods when the bank needs to record deposits. One of the quickest ways to gain access to quick deposits is to offer higher interest rates on CDs than competing banks. Traditional banks may have more than one interest rate for CDs. They may offer one rate for anyone interest in buying a CD, and another rate for those that have a current account at the bank or who are considered a valued customer at the bank. It may be worthwhile checking into special programs the bank offers for its customers when checking the interest rate.

Online banks are also a good source of high CD returns. Without the overhead of traditional banks, online banks can offer a higher return on investments. Before investing money in an online bank, ask if the bank's funds are backed by FDIC insurance. If so, the bank is under federal regulation and is just as safe as a traditional, brick and mortar establishment.

Finally, check brokerage firms when looking for high CD rates. Brokerage firms often trade large blocks of CDs. They resale these CDs individually, which allows for a higher rate of return. Brokerage firms offer other savings vehicles as well, and a broker may be willing to discuss the advantages and disadvantages of CDs over other types of long and short term investments.

After compiling a list of the best CD rates it is important to compare them equally. Investing longer-term typically yields higher interest rates than short term, so expect a 30 day CD to pay a lower rate than a 10 year CD. Investing a great deal of money often leads to higher interest rates as well. Jumbo CDs, which require a $25,000(USD) investment, offer a higher rate of return than smaller investments. When comparing interest rates, make sure that you are comparing CDs that have the same requirements.



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