Best CD rate for High yield CD
Published 1/6/09 (Modified 3/3/14)
Updated list of certificate of deposit rates
If you're searching for a definitive and regularly updated list of the best CD rates currently available in the market, you've come to the right place. In the CD rate table below, I've compiled a list of the top nationally available certificate of deposit bank offers featuring the highest annual percentage yields (APY). While CD rates and certificate of deposit offers rise and fall with market interest changes, they tend to promote much higher interest rates of return than other forms of bank or credit union deposits, such as high yield savings or money market accounts. The trade off in order to enjoy the higher interest rates that CDs afford, is a certain degree of liquidity and access to your money. When you put your savings in a CD account, the money is momentarily locked up for the duration of an agreed upon fixed CD term period. In exchange, banks are willing to pay you a much higher interest rate for your savings than they'd otherwise compensate you for a regular savings account. Typically for certificate of deposits, the longer the CD term you are willing to lock yourself into, the higher the CD interest rate you will receive in return.
For the sake of brevity, I have chosen to only list the best CD rates for 12 month certificate of deposits. Along with the top CD rates, I have also provided comparative rate offers from popular brick and mortar retail banks as well, since many consumers have a lazy tendency to automatically buy CDs from their local banks or credit unions rather than take the time to conduct a thorough online search for better deals. One thing to note when it comes to CDs is that the best CD rates are rarely offered by large retail banking giants like Citibank, Bank of America, JP Morgan Chase, or even Wells Fargo. Usually it's the small to medium size, or even online banks that market the best CD rate offers.
Comparison Shop For The Best CD Rates and High Yield Savings Accounts
While I believe the updated CD rate chart below reflects the best CD rates available, I also believe in the importance of thorough price comparisons and digestion of all CD rate reviews and bank rate alternatives. Currently there is a rather highly touted online service that's growing in popularity called - Lending Club, where consumers can engage in peer to peer lending and the average net annualized return for Lending Club notes are between 5.57% for grade A notes and 9.16% for grade C notes. While not fully protected by the FDIC the way ordinary bank CD's are, the impressive rates of return of Lending Club are at the very least worth some consideration by CD rate chasers.
List Of The Highest Yield Bank CD Rates For 12 Month Deposits (1 Year)
*These rates are subject to change at any time by the respective banks. Check the banks website for current rates, fees, terms and additional information before applying.
**E-Loan APY for balances $10,000 - $49,999.99
***Citibank APY for balances below $10,000, rate collected within: NY
****FlagStar Bank 12- 17 Month CD rate collected within: 49201 (MI)
*****Capital One Bank rate collected within: 10025 (NY)
High Yield CDs and Savings Accounts Are Protected By FDIC Insurance
CDs and certificate of deposits are sought out by savvy investors primarily because of the higher interest rate of return that they offer in comparison to other types of bank account deposits. While investments such as stocks and mutual funds usually offer higher rates of return over the long haul during ideal economic times, during periods of major recession or credit-crisis-induced financial turmoil, the benefits of FDIC insured bank deposits really shine. Bank deposits and CD accounts are fully protected from loss in the event of a catastrophic bank failure by the federal government's FDIC insurance up to the current individual maximum FDIC coverage limit of $250,000 per bank. Backed by the full faith and credit of the U.S. government, bank savings and CDs offer the maximum amount of financial protection afforded in the market today.
Keep Your CD Deposits Accessible and Liquid By Setting Up A CD Ladder
As is generally the case, the longer you are willing to have your CD investment locked up, the higher the CD interest rate your bank will offer you. When you buy a certificate of deposit through a bank or credit union, you transfer money into a CD savings account for a fixed amount of time and agree not to pull the amount out until the time period matures or expires. In the event of a premature CD withdraw before the term limit is up, there is a hefty penalty fee you must pay to the bank. So long as there's no early CD pullout though, upon maturation, you are free to withdraw your money out along with the accrued interest and decide whether you want to roll it over into another CD deposit or walk away.
However, the best way to maximize your CD rate of return and ensure a reasonable degree of accessibility to your CD money is to set up a CD ladder. A CD ladder is simply an expense-free investment strategy used to manage CDs that both maximizes liquidity and interest rate (by managing multiple long duration CDs utilizing smaller amounts), and at the same time minimizes risk and the potential drawbacks of freezing up your savings for an extended period of time. The process of laddering CDs requires the bank account holder to initially purchase multiple CD's with different term limits so that they ultimately mature at fixed regular intervals. By staggering multiple CD deposits so that each individual CD account matures at set intervals, this affords the deposit holder additional liquidity, allowing him or her to take advantage of rising interest rates and still be able to continuously seek out the best banks with the highest CD rates possible.