Money Blue Book

Updated List Of The Best Nationally Available Bank CD Rates Below

Below, I’ve included a list of the best CD (certificate of deposit) rates presently found online – periodically updated by yours truly whenever I am alerted to major changes in the rates. All of the bank CD rates listed below are nationally available and not restricted to residents of any particular state(s). While national annual percentage yield (APY) rates for banks have fluctuated and dropped across the board due to the economic troubles we’ve been experiencing, the interest rates offered by CD’s still remain consistently higher than that offered by other forms of FDIC insured deposits such as savings accounts and money markets.

For many years now, I’ve kept my short term cash and emergency fund money saved in a variety of online savings accounts and online CD’s – jumping from one bank to another in pursuit of the highest interest rate yields. To maximize my money to its highest passive income potential, I never keep my short term cash idle for too long. At the very least I always ensure that they are properly invested in the best interest bearing accounts offering me the most competitive yields based on what I’m willing to give up in terms of account accessibility and liquidity. While I keep my most short term emergency funds stored in ultra accessible savings accounts, I store the bulk of my regular cash savings into certificate of deposits, neatly arranged into CD ladder setups for maximization of return and liquidity.

Contrary to some views, CDs are not all that difficult to use effectively. They are nothing more than time deposit products offered by banks that offer fixed rates for the life of the CD term. The biggest difference they have with savings accounts is that the funds deposited into CD’s are held for pre-set terms that range in duration from as short as 1 month to 10 years or longer. In exchange for the customer’s agreement not to withdraw the funds for the predetermined period of time (and consent to face an early withdrawal penalty fee if he or she does), the servicing bank pays the CD account holder a higher rate of interest on the deposited funds than it would otherwise pay for a readily accessible savings account. It’s a trade-off consideration between the customer’s preference for instant account accessibility versus interest rate of return. Typically, the longer the CD term the bank customer agrees to, the higher the CD rate offered in return. Obviously, one should not put funds into a CD that one would expect to absolutely need within a very short period of time.

Online CD Deposits Offer Much Better CD Rates Than Traditional Banks

While anyone can easily visit their local bank or neighborhood credit union and open a new certificate of deposit account, you’ll find that the rates these brick and mortar sources provide are rather limited compared to the higher rates that online banks and Internet based lending institutions are able to offer. The top online banks can afford to provide their customers substantially higher rates on their CD deposits and investments due to the much lower overhead costs associated with running web-based services. Because they don’t have to maintain as extensive of a network of branch offices and don’t need to spend as much money hiring a large staff of employees and bank tellers to run their operations, online banks are better situated than traditional banks to pass on that extra savings to their depositors. As such, the high yield savings accounts, money market accounts, and CD rates you’ll find with online only banks such as EverBank, Ally Bank, and HSBC Direct will almost always beat out the interest rate offerings of more well known financial institutions like Citibank, Bank of America, JP Morgan Chase Bank, and Wells Fargo.

Even In The Event Of An Emergency, Online Bank CD Deposits Are Fully Protected

While these online banks perhaps don’t have the same brand name recognition and years of extensive and proven reliability as many one of the too-big-to-fail U.S. banking giants, all of the various deposit accounts they offer all enjoy the same equal protections and solid depositor guarantees afforded to the bigger name banks and credit unions. In the United States, the vast majority of bank accounts and CD deposits are fully protected from loss in the event of any unforeseen system collapse, theft, or potential run on the bank – backed by the full faith and credit of the U.S. government up to the current maximum FDIC coverage limit of $250,000 per depositor, per bank. Unless the federal government suddenly collapsed, ceased to exist, thereby dissolving the entire nation into Armageddon and social anarchy – your money, whether deposited in a savings account or stored in a certificate of deposit account – is 100% safe.

List Of The Highest Yield Bank CD Rates For 12 Month Deposits (1 Year)

For consistency and comparison purposes, I have chosen to only list the best CD rates for 12 month certificate of deposits as opposed to listing every conceivable CD duration out there.

Compare CD Alternatives For Offers That Exceed Even High Interest CD Rates

Of course, you should never commit to any agreement until you’ve conducted some research, properly compared offers, and first shopped around for the best CD rates and deals. You should never solely take my word for it without performing your own due diligence. I highly encourage you to check out the various rate disclosures to confirm for yourself.

Alternatively, if you’re looking for a super competitive rate of return, you may wish to consider options beyond just high yield CD’s. Those willing to swap a little bit of the iron clad protections afforded to CD’s by FDIC insurance may want to check out P2P social lending networks where yields for investors are currently averaging over 9.60% APY for those willing to lend money out to prospective good credit score borrowers. The rates offered by sites such as Lending Club and Prosper.com tout APY offers that greatly exceed anything offered by bank CD’s. The impressive rates of return as reflected in this review of Lending Club are at the very least worth some consideration by prospective CD rate chasers.

Review Of The Balance Transfer Credit Cards I Use To Pay Off Debt

As a fan of balance transfers and zero percent credit cards, I’ve been feeling rather forlorn these past few months. With the recent enactment of new laws and regulations clamping down on how credit card issuers run their practices, it seems the era of 0% balance transfers and 0% APR deals has finally reached its apex and is now beginning its downward decent into the annals of credit card lore. Only a mere few years ago, one could effortlessly lighten the burden of high interest credit card debt with the assistance of balance transfer offers – lucrative deals that dangled everything from waived transfer fees to long term interest free durations that extended into perpetuity for the entire life of the loan. At its heyday, it was a common place to hear stories of those who were able to engage in balance transfer arbitrage and profit immensely from the 0% APR offers that credit card companies issued to attract new card members to the fold. Back then, the savvy and opportunistic card arbitrager could simply apply for a credit card, obtain a 0% balance transfer, pay no money up front, and immediately transfer the free funds into a remarkably high yielding (5.00 – 6.00% APY) online savings account – reaping what was essentially free interest profit.

Sadly for those of us who once depended on these types of offers for so long, those days are now sorely missed and all but gone, as such once abundant deals are edging ever closer to extinction. With the devastating credit crisis having made its presence keenly felt in all aspects of the U.S. economy, credit card issuers have pretty much pulled out their most lucrative balance transfer offers. Nowadays, balance transfer durations are getting shorter, the balance transfer fees are getting higher, and ordinary purchase interest rates at the conclusions of promotional periods are all witnessing substantial increases.

Compare These Factors When Reviewing Prospective Balance Transfer Cards

But while harder to find, balance transfer cards still exist, at least for the time being. For those who wish to take advantage of these limited time offers, it’s important to recognize the critical ways that today’s balance transfer offers have changed compared to years past. Here are the crucial balance transfer terms and conditions to always consider:

1) Length Of Time Of the Promotional Periods: Presently, zero percent balance transfer periods range from 6-12 months with only a few rare programs that offer terms beyond a year. Obviously, the longer the term the better, but even enjoying a 6 month promotion at 0% APR is less onerous of an interest penalty burden than enduring the same time period at a whopping 15-25% APR or more (which is what many credit card companies are gouging their customers with these days).

2) Balance Transfer Fees: While introductory 0% APR no balance transfer fee cards are still around, they are increasingly very difficult to find. Currently, the standard balance transfer fee for most cards is slated at 3% of the total amount transferred. While there are still a few offers out there that do offer the next best alternative – capped balance transfer fee charges at a maximum of $75.00 or so, those types of attractive offers are dwindling as well.

3) Credit Card Sign Up Bonuses: While 0% credit card promotions are dwindling, incentive rewards and sign up bonuses are still plentiful. It’s best to seek out cards that offer special sign up rewards whenever possible. There are actually quite a few offers out there that pay anywhere from $50 to $100 or more for new members. By taking advantage of these sign up rewards, one can greatly minimize the impact of the 3% balance transfer fee charges that many introductory balance transfer offers impose.

4) Annual Fees: Avoid credit card offers that levy annual membership fees if possible. There is simply no reason to pay such petty charges as there is a wide selection of no annual fee cards out there to choose from. The exception to the rule is if the card offers a special sign up bonus that pays for the annual fee altogether.

The Top Balance Transfers: 0% APR Credit Card Offers That I Use

While it’s presently no longer reasonably profitable to continue playing the credit card arbitrage game, balance transfer cards can still be a reliable method of debt reduction and a source of emergency funding for those drowning in debt or suffering from a bout of unemployment. While a host of alternatives to balance transfers have emerged, they still remain very effective and accessible solutions for individual and families looking to manage their debt.

If you’re looking for breathing space and extra time to pay down your existing credit card balances without the stifling pressures of the high interest gun pointed at your head, a balance transfer credit card that offers a 0% APR introductory rate may be right for you. But here’s a little warning. While 0% and low interest balance transfers are effective tools for reducing the burdens of existing credit card debt, if you aren’t diligent in ensuring that you follow the appropriate rules and conditions to the letter, you may unwittingly put yourself in a worse off position than before. When you obtain your balance transfer offer, you should never use your promotional credit card for additional purchases but instead focus exclusively on using the interest free grace period towards paying down existing high interest debt. Remember, you ought to engage in 0% balance transfers only if you’re serious about getting out of debt, not merely as a way to engage in delayed gratification by using the interest free funds to go on a self defeating shopping spree.

As I frequently get emails and requests from readers asking me for recommendations on what I believe are the best balance transfer offers available today for those looking to pay down debt, I’ve included a very short list below of my conclusions. The following is a list of what I would personally use for balance transfer purposes. Note that a few of the balance transfer cards below even offer zero percent rates on purchases along with the balance transfers to boot. A few even tout special sign up bonuses as well.

1) Discover More Card – No annual fee. Offers 0% APR on balance transfers and purchases for 6 months, with a 3% balance transfer fee. However, all new accounts receive a $50 cash back bonus after $500 in purchases is made with the card. At the conclusion of the balance transfer period, the card reverts into a handy cashback rewards card of 5% and up.

2) Citi Platinum Select Mastercard – No annual fee. This very popular offer from Citibank offers 0% APR on balance transfers and purchases for up to 12 months. There is a balance transfer fee of 3%. As a non-rewards card, the Citi Platinum Select’s natural interest rate is also comparably lower than other reward based cards.

3) Citi Forward Card – No annual fee. This Citibank credit card offers 0% APR on both balance transfers and purchases for 7 months, with a 3% balance transfer fee. But with this special link, new card accounts can get a sign up reward that’s equivalent to a free $100 gift card at a variety of stores, trade-able for cash. To qualify, you’ll need to make at least $250 worth of purchases and elect to receive paperless statements within 3 months of account opening. The Citi Forward card is a very highly touted cashback rewards card as well.

4) Escape by Discover Card – This special Discover travel credit card promotion offers a 0% balance transfer and 0% purchase period for 6 months, with a 3% transfer charge. It also offers new card members the mile rewards equivalent of a free $100 gift card. The new bonus miles earned upon sign up can be exchanged for cash, gift cards, or other travel rewards.

5) Miles Card by Discover – No annual fee. Get a 0% APR offer on balance transfer and purchases for 6 months, with a 3% balance transfer fee. While there is no official cap on balance transfer fees with this offer, the Miles Card by Discover does offer a nice sign up bonus that’s enough to instantly redeem for a versatile $100 gift card - swappable for cash, statement credit, or free airline tickets – thus reducing your effective balance transfer fee burden.

6) Citi mtvU Platinum Select Card – No annual fee. Based on credit history, student applicants who qualify can receive 0% APR on balance transfers and purchases for 7 months. The Citi mtvU card is one of the best, if not the best card for students looking to rack up lots of free money in the way of cash back rewards for purchases at the conclusion of the balance transfer period.

As a long time apartment renter for many years, I’m finally on the verge on purchasing my very first home. As such, I’ve been super keen on tracking my credit reports and credit scores closely in recent months to boost my attributes as a prospective mortgage loan seeker. For a while now, I’ve been spending a tremendous amount of time learning everything I can about home mortgages and figuring out how to position myself to ultimately qualify for the very best rate on a home mortgage  loan. One of the most crucial pre-requisites I’ve discovered about interest rates for mortgages and personal loans in general – is the shear importance of having a clean credit report and a good credit score. Banks, credit unions, mortgage brokers, and even credit card issuers utilize credit reports and credit scores to ascertain the credit worthiness of loan applicants – mulling over everything from the number of timely on-time credit payments and the severity of late payments, to the age and number of active credit accounts. Such historical data is compiled and reviewed by the lender to determine the appropriate interest rate the lender must charge the loan applicant to compensate the lender for the level of credit risk that it must expend. Those applicants with banged up credit histories and low credit scores tend to get slapped with higher interest rate fees on their loan offers than those with stellar credit histories. Individuals who have decent credit reports with good credit scores to match almost invariably enjoy much greater access to the best mortgage rates and the best credit card offers than those without.

Credit scores are important because they are basically summary reflections of what’s found on your credit reports, and are one of the primary quick and easy short cut tools that lenders use to predict how likely you are to make your future credit payments on time. Thus the revealing nature of your numerical credit score has a direct impact on what type of mortgage loan rates, credit card offers, balance transfer deals, and auto insurance rates you can qualify for. Clearly, having a good credit score makes your financial life a lot easier and helps you save money in the form of lower interest charges whenever you need to apply for a loan or tap into credit based products.

The Definition Of A Good Credit Score Depends On What You Intend To Do With It

For starters, it’s important to understand that the importance of your credit score is relative and contingent on what you intend to with the score. Its utility also depends on which particular credit score you are talking about. While it’s always a great idea to monitor your routine credit score changes if you’re one of those like myself who occasionally depend on 0% balance transfer credit cards and balance transfer alternatives for emergency fund purposes, only if you’re planning on seeking credit or a loan within the next year would I recommend that you place so much immediate attention on your score. If you are not in the market at the present time for a mortgage or aren’t planning on applying for a P2P personal loan or credit card within the next 12 months, your credit score is certainly not something you ought to overly fuss over. While one’s credit score has far reaching effects beyond just loan applications and approvals (impacting prospects such as employment screenings and housing background checks), its primary purpose still revolves around its importance in helping you secure the very best interest rates and terms when you need access to immediate credit. If you’re thinking of getting a mortgage loan for example, knowing your credit score is important because it may let you know if you need to take immediate action to improve your score so that you can push yourself into a higher credit score tier and thereby increase your chances of qualifying for a lower interest rate on your loan application.

A Good Credit Score Also Depends On What Credit Scoring Formula and Range You’re Using

Other than the purpose of what you intend to use it for, another important factor of what constitutes a “good credit score” is also determined by what credit scoring methodology you are using. While all of the different credit scores out there are calculated by information contained in your credit reports, including payment history and ratio of actual credit usage to total available credit, the various scores out there differ in their numerical scoring ranges. Currently, the most popular and widely used scoring system is the FICO credit score formula (the myFICO.com score) developed by the Fair Isaac Corporation. Take a look at my article about FICO credit scores if you want a good background overview on how the scores are calculated and determined. FICO scores range from 300 to 850, with average FICO scores ranging between 680-700 depending on which of the 3 major credit bureaus’ data (Experian, Equifax, or TransUnion) you’re using. Presently in the United States, the median FICO credit score is 723.

While there is no current standardization on what exactly a good FICO credit score is, generally a good number is regarded as FICOs that are at least above average or above the median score (anything above 700). If your FICO score is at least 720 or higher, I would say that you are in pretty good shape as far as your credit rating goes in terms of your chances of securing top interest rates for your loan requests. In the past, most mortgage lenders and banks have traditionally lumped those with FICO credit scores of 720 or higher with those in the 800’s – deeming both groups to be very low default risk borrowers – equally qualified for the best interest rates.

Good Credit Score Standards Have Increased In Recent Years

However, one thing to bear in mind is that credit scoring standards have increased substantially during the last few years. Particularly as a result of the recent credit crisis and subprime mortgage debacle, lenders and creditors have grown more strict in what they demand out of borrowers for the lowest interest rate offers. The definition of what’s considered a good credit score has definitely gone up the last few years. Not too long ago in 2006 for example, a FICO credit score of around 620-650 would have been regarded as a “good credit score” and more than sufficient to qualify for the cheapest mortgage rates. Those days are long gone and lenders today now demand scores in excess of 750 or more for the top mortgage rates, along with high down payment percentages of 20% or more for home loans. While FICO credit scores of 720 or higher may still be regarded as the baseline standard of constitutes a good credit score, to truly snag the best interest rate offers, you’ll likely need premium FICO’s of 750 or higher.

The Effect Of Good FICO Credit Scores On Interest Rate Qualification

As noted above, the numerical range of what constitutes a good credit score is relative, and depends on what you want to do with it. Different types of lenders implement different credit scoring ranges in their categorization of prospective borrowers in terms of credit risk. Take a look at the two FICO score tables below (one for mortgages and the other for auto loans) to get an idea of how scoring ranges relate to the interest rates each range would generally command from lenders. As you’ll note, mortgage lenders tend to demand stricter FICO credit score standards than say – credit card issuers and even car loan lenders.

Example: 30 Year Fixed Mortgage Rates For A $300,000 Mortgage Loan

Looking at the above sample interest rates on a hypothetical $300,000 home mortgage application as provided by the myFICO.com website, it’s clear that the best interest rates on home loans are available to those with FICO scores in excess of 760 or greater. Of course, it’s also important to remember that such rates are rarely exclusively determined by FICO scores alone. Mortgage lenders also rely heavily on the applicant’s documentation of income sources and available assets when determining appropriate interest rates. Let’s look at auto loans:

Example: 36 Month Auto Loan Rates For A $25,000 Car Loan

As you’ll note from the table above, the best auto loan rates can generally be qualified by individuals with FICO credit scores in excess of 720 or greater. It’s an over simplification, but it sort of gives you a broad view of what constitutes a good credit score in terms of qualifying for the best rates.

If you don’t know where your official FICO credit score currently stands or what’s on your triple credit reports as compiled by the three major credit bureaus of Equifax, Experian, and TransUnion, I recommend finding out sooner than later. You might not need to tap into your credit rating at the present moment, but it’s always good to know where you roughly stand. Here are a few ways to get your FICO scores and credit reports for free.

• Free credit scores – via myFICO.com trial offers
• FICO discount codes – for credit score savings
• Free credit reports – obtained from the federal government’s official AnnualCreditReport.com website

It’s time for my monthly net worth report. As long time readers know, for months now, I’ve been calculating my networth changes and posting an analysis at the end of every month to chart the step by step progress I’ve been making in my lifelong financial journey. The purpose of such networth updates is not to necessarily boast about monetary successes or lament about the investment mistakes made during the preceding month – but rather, it’s to serve as a routine reminder that the daily decisions, actions, and inactions in one’s life truly have a ripple impact on one’s long term financial health. While I post my own financial net worth reports throughout the year for my own statistical benefit and to share with readers a little about about what I’ve been up to during the previous weeks, this habitual exercise is also to encourage others to do the same as well.

It’s About Time – I’m Finally Looking To Buy A Home For The Very First Time

This month has been a bit more hectic than usual. For one thing, I’m in the early stages of becoming a first time home buyer. Right now, my anticipated home purchase date is still likely months away, but I can already envision the prospect of finally moving out of my longtime apartment rental after all these years and into my very own single family home or town house for the very first time. If you’ve been following my previous networth reports, you probably already know that I’ve been mulling the advantages and drawbacks of buying a single family home or townhouse, versus a condominium. After much thought and back and forth debating, I’ve finally decided to focus exclusively on town homes and single family houses at this point. My goal is to find a nice home where I can reside for many years – at least 5-10 years or more. I think a condominium is well suited for single young professionals or busy working types who live in an urban setting and desire maintenance-free living with a kick-ass commute – but I don’t think it’s as appropriate in terms of investment upside or as a long term dwelling for individuals like myself who work from home and anticipate future family plans. I’m not presently married, but that stage in life is something I can see see and taste in the not too distant future. I think a house and particularly a single family residence, will better suit the future plans I have projected for myself.

In terms of housing location, I’ve yet to come to a definitive decision. As a long time resident of the Washington D.C. suburbs, I would very much like to stay in the same relative metropolitan area. However, due to the fact that I run my network of businesses from home, proximity to work and commuting time are not factors I have to really take into account. Thus, I am amicable to the prospect of moving out to the less crowded and less traffic jammed boonies of Maryland – areas like Ellicott City, Gaithersburg, and Germantown. For now at least, I’m passing on the resales, and focusing exclusively on new housing developments. There’s something sparkling refreshing about owning a brand new home that greatly appeals to me. Particularly in a down housing market as it is now, due to all of the amazing closing incentives and free options that new home builders are shelling out for prospective buyers, it makes a lot of sense to purchase a new home instead of buying an existing one. As I don’t have any immediate plans to move out of my current rental as of yet, I’m willing to be extraordinarily patient in my housing search – intending to move on to the next housing prospect if I can’t sufficiently price gouge the prospective home builder to my utter capitalist satisfaction. Sure, I’m being a rather greedy profiteer about this whole thing, but I’m just doing my part to ultimately and forcibly put the pricing equilibrium back into this housing market. I still think housing prices remain grossly overpriced in most areas.

Hopefully I can work the plunging home value and foreclosure supply pain felt by the major home builders to my advantage as I negotiate prices, option upgrades, and improved floor plan bump outs. As a prospective first time home buyer in the aftermath of the worst real estate market collapse in decades, I’m so thankful to have dodged the housing bubble bullet just a few years. I almost purchased a starter condominium home a few years ago at the height of the boom. I missed out big time on the housing surge, but thankfully also wasn’t locked in for the pricing collapse that ensued. My hope now is to snap up a great deal at the present time as housing prices are in the doldrums – and ride the price elevator up when the market recovers years from now. Those of you who are also prospective home buyers, don’t forget to take advantage of President Obama’s $8,000 tax credit incentive for new first time home buyers (assuming you qualify and aren’t phased out due to your income).

My Current Net Worth and Financial Status Update Compared To Last Month

Planning Ahead and Saving Up For A Home Mortgage Loan Down Payment

In anticipation of my upcoming home purchase (hopefully sometime in the next few months), I’ve been saving up cash for the 20% down payment I’ll inevitably need for a 30 year – 20% down – home mortgage loan within my approximate price range. If my dream of purchasing a brand new home at pre-construction comes to fruition, chances are I will probably only need to put down around 5% as a contractual security deposit for now. The rest of the money and even the mortgage application won’t be needed and processed until the home is actually entirely built 6 months from the date that I authorize the home construction to begin.

Usually, the vast bulk of my savings are duly invested in stocks, exchange traded indexes, and mutual funds. However, to ensure that I set aside the necessary amount of funds for a potential mortgage down payment sometime in the near future and to protect myself from unwittingly investing the funds away, I’ve transferred a sizable amount of funds from my discount broker accounts into various high yield savings accounts at a number of online banks for more liquid access should I need to call upon them at the desired time.

Boosting My FICO Credit Score To Qualify For The Best Home Loans and Mortgage Rates

In my earlier days, I used to take advantage of the availability of free credit report and free credit score trial offers to check my FICO score and credit report history (promptly canceling each individual trial offer after I had obtained the desired information for no money down). But now that I’m more financially established and can actually afford to purchase more advanced credit management applications, I’ve been using the MyFICO Score Watch tool to track my FICO credit score updates and changes on a regular basis. The MyFICO tool automatically monitors my triple credit reports and FICO credit score – emailing me instant alerts whenever my FICO score changes due to sudden updates to information on my credit reports (doubling as a useful identity theft prevention tool as well). The best part is that whenever the online credit score tool informs me of an increase or decrease to my credit score, it also informs me of the reason why my FICO score changed the way it did. For example, about a months ago, my FICO score suddenly and rather inexplicably dropped 15 points. The culprit (as was automatically reported to me by the online tool) was a sudden increase in my overall credit limit usage due to several large credit card purchases I had recently made.

Because I am now on the verge of purchasing a new home and anticipate the need to take out a home mortgage loan in the coming months, I’ve been taking appropriate actions to improve my credit report history and boost my FICO score to the highest it can reasonably be. Because one’s overall credit utilization ratio is such a major component piece of the FICO credit score pie, by making frequent extra payments towards my existing credit card balances and reducing balance transfer loads, I’ve been able to essentially reduce my credit usage ratio to nearly zero. As a result, my FICO credit score has recently enjoyed a very positive and significant spike. Due to aggressive and corrective actions I’ve been taking, my FICO score now stands at 813 – on a scale of 300-850. Generally 750-775 is sufficient to qualify for the lowest prime interest rates. My goal is to keep that number high – at least until I have completed the home mortgage loan process (whenever that may be). As home lenders rely heavily on an applicant’s credit scores and credit reports to gauge risk level and to assess interest rates, it’s in my own self interest to keep my credit rating as pristine as possible for the next few months.