The Best CD Rates (4% or more APY)
Grow your money safely: higher yields with a Certificate of Deposit for guaranteed returns.
Didn’t find what you’re looking for?
There are other account types that may be a better fit for your financial goals
Maybe a Savings Account would be better for your needs
A Savings or Money Market Account has much more flexibility than a CD and currently with higher rates in most cases. You can deposit and withdraw money as needed without penalties.
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A Cash Management Account could also be a good choice
A Cash Management Account gives you a high rate of return with the flexibility to access your funds without penalty. It also often provides additional banking services like ATM access and check-writing capabilities.
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Get similar returns as CD accounts with an Annuity
An Annuity is an ideal product type for those looking for a stable, long-term plan – particularly for retirement. Keep in mind they come with fees and reduced liquidity, but they can offer guaranteed income with tax-deferred growth and a variety of options like fixed, indexed, or deferred. Who doesn’t want a steady stream of income? Typically, Annuities are most ideal for those 55 and older.
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FAQ’s
What Is a Certificate of Deposit (CD)?
A Certificate of Deposit (CD) is a type of savings account that offers a fixed interest rate for a specified term. In exchange for leaving your money deposited for the full term, banks typically offer higher interest rates than regular savings accounts. The term length can vary from a few months to several years, and at the end of the term (known as the maturity date), you receive your original deposit plus the accrued interest. However, once you deposit your money, it’s locked in for the term of the CD, and withdrawing it early could result in penalties.
How Does an Online CD Differ From a Traditional CD?
An online CD operates in much the same way as a traditional CD, but it is offered by online banks. These banks can typically offer higher interest rates because they have lower operating costs than brick-and-mortar institutions. The process of opening and managing the CD is done entirely online, which can be more convenient for many customers.
Why Should I Consider an Online CD Over Other Savings Options?
Online CDs can be a good option if you have a lump sum of money that you don’t need immediate access to and you want a guaranteed return. Often, they offer higher interest rates than regular savings accounts, and the fixed rate means your return is predictable. CDs are also a safe investment, as they are typically insured by the FDIC up to $250,000 per depositor, per bank. If you’re looking for a low-risk way to grow your savings, an online CD might be a good choice.
Are Online CDs Safe?
Yes, online CDs are safe as long as they are offered by FDIC-insured banks. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per bank, which means your money is protected even if the bank fails. Always ensure that the online bank offering the CD is FDIC-insured before opening an account.
What Are the Penalties for Withdrawing Money From a CD Early?
Withdrawing money from a CD before the term ends typically results in a penalty. The penalty can vary depending on the bank and the term of the CD, but it is usually a portion of the interest earned, such as three to six months’ worth of interest. In some cases, withdrawing early could even result in losing some of your principal. It’s important to understand the specific penalty terms before committing to a CD.
How Do I Open an Online CD?
Opening an online CD is straightforward. You’ll need to provide your personal information, such as your Social Security number, a valid ID, and your address. You will also need to choose your CD term and the amount you want to deposit. Once you’ve made your selection, you can fund the CD by transferring money from an existing bank account. The entire process is usually quick and can be completed online from your computer or mobile device.
What Happens When My CD Reaches Maturity?
When your CD reaches maturity, you have several options. You can withdraw your original deposit plus the interest earned, roll it over into a new CD, or transfer the funds to another account. Many banks offer a grace period of a few days after maturity to decide what you’d like to do. If you don’t take action, some banks will automatically renew the CD for the same term at the current interest rate, so it’s important to review your options as the maturity date approaches.
What Should I Consider When Choosing an Online CD?
When choosing an online CD, consider the interest rate, term length, penalties for early withdrawal, and whether the bank is FDIC-insured. It’s also important to think about when you’ll need access to your funds, as you won’t be able to withdraw the money without penalties until the CD reaches maturity. Compare different offers to find the best CD for your financial goals.