Best Certificate of Deposit Rates: A Guide to the Different Types of CD and APY Accounts
Looking to open a well-performing savings account? Perhaps the best place to start is with an online bank. They are in a better position to offer the best certificate of deposit rates as they operate primarily online and have no physical branches to fund. CDs are often considered the “next level” after a savings account. However, you will be required to keep your funds locked for a specified period of time. Depending on the bank, there may or may not be a penalty for an early withdrawal.
Some banks offer a few different types of CD accounts, including term CDs, in which the interest rate is locked in without having to worry about the drama of market volatility, as well as a “no-penalty” CD, which lets you allows you to maintain access to your funds while still having the security of a certificate of deposit. Some other types of CDs are designed to balance your investments and help you maximize your return.
With a traditional CD, you may not be able to make additional deposits. If you want to add money later, the bank must offer the option to update an existing account.
Best Certificate of Deposit Rates at Online Banks
The great thing about online banks is that they really do offer the best certificate of deposit rates, which can exceed 2.0% APY. It is ideal to choose a bank that automatically renews accounts upon maturity. The more mature the account becomes, the higher the APY percentage. Ideally, there should be no fees for opening an account.
Consider the term of your certificate of deposit before opening an account. How long can you afford to keep that money locked in the account? If you think you might need it in less than a year, look for a bank that offers a six- or twelve-month term and doesn’t charge you a penalty for taking it out. On the other hand, if you are interested in saving for the long term, such as for your child’s retirement or college tuition, choose a bank that will continue to increase the% APY the longer the account expires.
Confirm that the CD is secured. Avoid any bank that is not backed by the FDIC. Also, check a bank’s background to make sure they haven’t experienced any financial problems in the past.
You’ll find a variety of CD account types to choose from, as well as the best certificate of deposit rates at CIT Bank. It is insured by the FDIC and is among the “Top 50 Banks in America.”
