Best CD Rates – Certificate of Deposit Rates

You know — they are playing a psychological game with us right now — they are hoping we’ll see it’s futile to save so we won’t bother. RESIST!!

I think that it is wrong to look at savings vs. CD interest rates and choose one based on the interest rate. The real criteria is what you want to accomplish?

–Do you want immediate, ready access to your cash? Go with a savings or checking account.

–Do you want safety for your principle, and don’t want it to be too easy to access (or is it a retirement account)? Go with CDs.

Unless you have high balances (like, the $100K variety, the real difference between 0.75 and 0.5% interest, or 1.25 and 2% interest — is negligible enough that it really doesn’t matter.

The real choice is — given that a savings account is right for a given pool of money, where can I get the best interest rate on savings accounts?

Or, ditto for CDs.

Not for one vs. the other. If you’ve got $1,000 or $5,000 in the bank, it’s really not going to matter that much to chase a .25% difference in interest.

While I wish that my credit union was even half as competitive as yours, J.D., it’s still beating all of the other banks in my area and the online banks, as well. It cannot be repeated enough–check out your local credit union!

Not worth it. Just get the Smartypig 3.25% savings account.

if you want to do good in the world with your money AND make a nice return, look into http://www.microplace.com
This is a cutting edge way to loan money to microfinance clients – the world’s poorest, hardworking entrepreneurs for whom borrowing money at fair rates can help them provide a secure future for themselves and their families – mostly they’re women.
Microplace is currently offering 5%. Pretty good, considering how well your money will be used before you get it back!

There is a difference between the HSBC rates: http://www.us.hsbc.com/1/2/3/personal/savings/deposit-rates
and HSBCDirect rates for the online CD: http://www.hsbcdirect.com/1/2/1/default/learn-more/ocd?code=CSM0000630&WT.ac=HBUS_CSM0000630

Here’s a thought of why interest rates are so low. Banks can borrow from the Fed at 0% or even better, get bailed out by our socialist government.

@BPT, I agree. Microplace is a great investment in interest now and socially. My goal is to invest $100 per month for 10 years with them. Too bad the 5% isn’t available in my state, but 3% is nothing to sneeze at now. And Yes, after >6 months of investing the interest is paid and principle returned into the account the money was invested from.

Even though this is a riskier path, what about considering a stock such as HSBC Finance Corp (HTB)? They are paying an amazing dividend when compared to their stock price (approximately 12%).

Hey JD – I know you just did this yesterday, but you may want to update already. ING dropped rates effective today.

Depending on the purpose of the money, the early withdrawal penalties can play a big role. I just moved my eFund into cds at my local CU. With a measly 6mo cd, I can beat ING’s rate, and there is no danger of losing my principle except if I withdraw within the first 7 days (which is required by law?regulation?something!) Worst case is simply losing my interest (up to 90/180 days). So if I don’t use it, I make a little money, if I do use it, I don’t have to worry about losing some of my money to penalties.

Generally, I’d lock in longer terms as soon as I see rates falling, and use shorter terms while the rates are rising. That way, you lock in the longer terms near the top, and you’re not locking in a lower interest rate at the bottom.

Right now, rates still seem to be falling, so I’d lock in what I can for about as long as I think things will keep falling. Admittedly, that’s just guessing, but that’s pretty much what picking a cd term comes down to. (Unless you have a time frame for needing the money.)

While the Treasury rate is plummetting, and with it the APY of seemingly every form of savings account, the credit card companies are raising their rates. I’ve been paying steadily on my Capital One card and they’ve raised my already unimpressive 14.99% APR to a nearly usurious 17.99% (let’s not discuss the positively usurious default rate, hovering around 35%, as I recall) due to “economic pressures”. It’s action like this that clearly shows how the banks are shutting down credit, even for “customers” with a good payment record.
Fortunately, my debt snowball is just starting to roll over this account; I’ll have it paid off within the next month. I’m seriously considering closing the account, right now I’m still weighing it against potential impact on my credit score.

Check out the Nationwide Bank (http://nationwidebank.com). They have pretty decent rates for local banks. Until about two years ago, they were a credit union that became a bank.

If you go to http://www.hsbcdirect.com , it’s showing a 12 month cd at 2.5% and a 18 month at 2.75%. Of course, online only, but still decent.

I figured the reason to put your money into a low-interest CD is the fear that interest rates are going to continue going down. A 1.5% CD seems pretty good, if you’re worried that rates will go down to 0.8% (as my money market fund fund is currently yielding). Of course, given that the prime rate is currently at just above zero, I don’t know how much lower people actually expect it to go…

Personally, I’m going to cash out my ING CD when it matures this month and transfer it over to SmartyPig (which, as others have mentioned, is one of the higher yielding bank accounts out there, and was yielding more than ING’s CDs even last year, before the precipitous drop in saving account interest rates).

BEWARE HSBC ONLINE CD’s !!!!!Hsbc has an online form that you use to sign up for a choice of CD’s. You check off the length and the rate as part of the form. The funds I used were from an existing online account through them. Just to make sure the rate was secure even though the form listed it I call twice with various questions and was assured that the rate was what I checked off on the form. The next day I checked and they had given me a lower rate and could really care less. Two weaks later and three long phone conversation with a few people half way around the world and still no call back. What a joke and very decieving. My account is pretty darn big too. Cant believe it!!!!!!! Dont get involve. Even my online savings had some issues.

Another good place to check for rates is AAA (www.aaa.com/deposits). I used several of their CDs to build a ladder, along with my credit union and another bank. If you’re going to use a ladder for a combination of short-term liquidity and better savings rates it might give you what you need… and if you’re a AAA member it’s a great way to get more out of your membership.

It is available for moneyrates.com only or cd rate is the same for all cd online?

Hi! I heard that as of Nov.2009 , that US savings bonds were paying 3 . something % , which ios better than the banks.

Just a word regarding previous commentor’s post on the Schwab cd’s. While it is true that you will not be penalized for withdrawing funds prioe to maturity…BEWARE, if you do opt to sell prior to maturity, the brokerage will sell the cd at “market value”. If you’re real close to maturity, you’ll probably make out by getting principle plus most of your accrued interet, BUT if interest rates go up from what you’ve locked in, you CAN lose some of your principle (albeit a small sum).

EWARE HSBC ONLINE CD’s !!!!!Hsbc has an online form that you use to sign up for a choice of CD’s. You check off the length and the rate as part of the form. The funds I used were from an existing online account through them. Just to make sure the rate was secure even though the form listed it I call twice with various questions and was assured that the rate was what I checked off on the form. The next day I checked and they had given me a lower rate and could really care less. Two weaks later and three long phone conversation with a few people half way around the world and still no call back. What a joke and very decieving. My account is pretty darn big too. Cant believe it! Dont get involve. Even my online savings had some issues.
Generally, I’d lock in longer terms as soon as I see rates falling, and use shorter terms while the rates are rising. That way, you lock in the longer terms near the top, and you’re not locking in a lower interest rate at the bottom.

Right now, rates still seem to be falling, so I’d lock in what I can for about as long as I think things will keep falling. Admittedly, that’s just guessing, but that’s pretty much what picking a cd term comes down to. (Unless you have a time frame for needing the money.)

To answer your inquiry about why anyone would invest in a CD from HSBC when their savings account return is at a higher rate, the answer is: most people won’t and that’s exactly why the bank sets the rates that way.

When the economy is having good times the “yield curve” goes up. That is to say interest rates for CD/savings/etc. looks like this:
1yr – 1%
2yr – 1.5%
3yr – 2%
etc.

If you graph this with years on the x-axis, and percent return on the y, this forms a line that goes up (the “yield curve”). The logic behind this is simple: banks (and anyone else receiving investments/savings) want you to invest your money for the long haul. They want to have a guarantee of your money for as long a they can get it. So, they incentivize saving longer by higher interest rates.

But in a recession, the yield curve reverses. Short term investments (savings) earn at a higher rate than long term (48 month CDs) – just like we see in some of these instances above. Why? It seems counterintuitive, right?

Not if you’re the bank. They are facing defaults from people they’ve lent to, and they’re facing people pulling money out of their long term instruments (cracking open the CD piggy bank to make mortgage payments) – they don’t need a guarantee of future money, they need to make sure they have money NOW.

So, they incentivize this by raising short-term returns, while lowering or keeping steady long-term rates.

The fact that there’s still an inversion in some of these rates shows that, at least in the banks’ view, the recession is still in force. It’s actually kind of a depressing thing when you find it.

My emergency fund has been at GLD since 2004. No penalty for early withdrawal and a great rate too.