A Guide To Finding The Highest CD Rates

CD’s are certificates of deposit. CDs guarantee higher interest than regular savings accounts if the minimum balance is maintained for a specified time period.

A guide to finding the highest CD rates.

The best place to start a search for the highest CD rates is your own branch bank. At many banks the branches are allowed to make a better offer than the advertised rates. This helps the branches retain and grow more deposits. Most banks have telephone service representatives that can quote current rates for callers. Many banks have special interest rates for online CDs. Always make certain the CD has FDIC coverage. As of October 23, 2009, there were 106 bank failures this year alone. The FDIC coverage will protect your CD if the bank should fail. If you find a bank paying a much higher rate than other banks, it may be on the verge of failure.

Why do banks offer CDs to customers?

Banks offer CDs to attract large deposits for a certain time period. The maturity date for a CD can run from 7 days to several years. These maturity dates allow banks to use the money to fund loans. Since the higher interest rate is paid on the condition that the money be kept in the CD until it matures, do not get a CD for a long maturity date. If the funds are withdrawn before the CD matures the higher interest rate will be lost. Interest will be paid but it will be at a much lower rate and some of the interest will not be paid as a penalty for the early withdrawal. Also, interest rates are now at an all time low point. As the economy recovers, interest rates will start to go up and CD rates will increase as well.

Related posts

1. Which Banks Have the Highest CD Rates?
2. How Do I Find The Highest Cd Rates?
3. How do I Purchase a Certificate of Deposit?
4. Is a Certificate of Deposit Considered a Deposit?
5. What is a Certificate of Deposit

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