How to get the best CD interest rate
Certificates of deposit (CDs) are a popular savings option for consumers who want to earn a higher interest rate than what traditional (and even some high-yield) savings accounts offer. They're reliable, low-risk and can help you capitalize on high interest rates before they go down.
But with so many options available to you, you want to be sure to find the CD with the best interest rate that also meets your budget and savings goals. To do so, there are several things to consider.
Start exploring your CD options online now to see how much interest you could be earning.
How to get the best CD interest rates
To find the CD that best suits your needs and gives you optimum returns, take the time to do the following.
Compare CD account offerings
While many banks offer CD accounts, they're not all equal So, take the time to shop around and compare interest rates from multiple financial institutions, including traditional banks, online banks and credit unions. Make a list of the banks offering the best CD rates and narrow down your options based on your preferences and savings goals.
Begin by comparing CD accounts here.
Choose the right CD term
CD term lengths vary from a few months to several years. The longer the term, the higher the interest rate they typically offer.
However, in exchange for these higher rates, you agree to keep your funds in the account until it matures. If you need to access the funds before then, you'll face an early withdrawal penalty, which eats into any interest you may have earned. So, calculate when you will need the funds and choose the best rate available for a CD that fits that time frame.
Check out today's top CD rates online now.
Keep an eye on interest rate trends
CD interest rates fluctuate according to economic trends and market conditions. But when you open a CD, the rate is locked in for the duration of the term, even if overall interest rates go down.
So, pay attention to interest rate trends. If rates are expected to go up, you may want to wait until then to open a CD. If they're high, it's wise to open a CD now to take advantage of that. Since CD rates are currently high, with top accounts offering 4.00% to 5.00% APY or greater, now is a smart time to open a CD.
Consider CD laddering
If you need to access some funds sooner than later, CD laddering can provide you with this liquidity while also allowing you to take advantage of higher interest rates offered by long-term CDs.
With CD laddering, you divide your savings into multiple CDs with different maturity dates. When one CD returns, you can withdraw the funds or reinvest them in a new CD at a higher interest rate. This can give you a good balance between liquidity and returns.
Find the best CD for you — see your options here.
The bottom line
Investing in CDs is a great way to save money and enjoy predictable returns. And finding the best CD interest rates doesn't have to be a daunting task. By following the tips above, you can maximize your returns while ensuring your account suits your investment needs and goals.
