Best CD rates | Certificate of Deposit rates

Certificates of deposit (often simply called CDs), by definition are time deposits. You give your money to the bank and then promise not to touch it for a specific length of time. In general, the longer you agree to let the bank keep your money via a CD investment, the higher the interest rate you will receive.

If certificates of deposit offer higher returns than a savings account, then why doesn’t everybody use them? The primary reason is that a CD investment is less liquid than a savings account in that you can’t just move money in and out without penalty as you can in a savings account. You can take your money out of a CD before it “matures,” but you are docked interest when you do. In fact, it is typical for a bank to penalize the interest amount even if it hasn’t been earned (meaning you could lose part of your principal if you close your CD early).

Anatomy of a CD

I was fortunate to win a $1,000 6-month certificate of deposit from ING Direct recently. (I never win anything!) Looking at it might be instructive:

Reviewing this screenshot, you can see that a certificate of deposit has an initial value (in this case, $1,000), an interest rate (3.50%), and a term (6 months). In other words, this is very much like a loan that I am making to the bank.

You can also see that the bank has an “Early Redemption Policy” that states that I would sacrifice three months’ interest if I chose to redeem this CD early, whether the interest has been earned or not. Because I have held the CD less than a month, I would actually sacrifice part of my principal if I were to close the account now.

When this CD investment matures on April 9th, I will have $1,017.28. Obviously $17.28 isn’t a huge return, but it’s important to remember that interest rates are low right now. (Also consider that if my $10,000 emergency fund were all in CDs, I would earn $172.80 in six months.)

Another important difference to be aware of is that, unlike a savings account, a certificate of deposit ends after a set amount of time. What happens at the end of the term depends on the arrangements you have (or have not) made with your bank. (I explain this further below.)

CD Tips and Tricks

A certificate of deposit is a great way to put your savings on steroids, so to speak, but there are ways to make them even better. Here are a few tips and tricks that can help you get the most out of your investment.

Use CDs to beat falling interest rates. When the Federal Reserve cuts short-term interest rates, you feel the pinch in your savings account. Certificates of deposit are a great way to buy yourself “protection.”

When you see a rate drop coming, open another CD. For example, the Federal Reserve just cut short-term rates another 0.50 percent last week. I would be shocked if banks didn’t follow suit, lowering the interest on their savings accounts. ING Direct could go as low as 2.25 percent.

When you see an interest drop coming, take some money from your savings account and throw it into a 6- or 12-month certificate of deposit, locking in the higher rate. (My web research hasn’t revealed what causes CD rates to move, but they do not move in lockstep with savings accounts.)

Climb the CD investment ladder. Just as you might use dollar-cost averaging to profit from fluctuations in the stock market, you can use a “CD ladder” to profit from fluctuations in interest rates.

Say you have $5,000 to invest. To build a CD ladder, you would invest the money in CDs with staggered maturation dates:

  • $1,000 in a one-year CD
  • $1,000 in a two-year CD
  • $1,000 in a three-year CD
  • $1,000 in a four-year CD
  • $1,000 in a five-year CD

As each CD matures, you immediately invest your money in a new five-year CD, effectively maintaining the one-year stagger, or ladder. You won’t earn the best possible rate of return, but you will earn a good one, and your income will be relatively constant. The CD ladder is also a form of diversification: you’re not betting all your money on one interest rate.

Protect yourself with parallel CDs. One of the biggest risks to your investment in a certificate of deposit is the need for early withdrawal. What if something happens and you need to pull the money out? As we’ve seen, this can be expensive. Nickel at Five Cent Nickel suggests mitigating your risk with parallel certificates of deposit.

Again, assume have $5,000 that you’d like to put into CDs. Instead of opening a single certificate of deposit for the full amount, consider opening multiple CDs. You might open three CDs at once, for example: two $1,000 CDs and one $3,000 CD.

This gives you a buffer in case you need to get at the money early. If you find you need $500, you can break a single $1,000 CD and the rest of your money is safe from penalty.

Related >> Beginners’ Guide to Investing

Beware of auto-renewals. Nicole wrote last week because she was surprised to find that her certificate of deposit at Countrywide had automatically renewed at the maturation date. Many (most?) banks will do this unless you instruct them not to.

If you know you’re ready to pull your money out of a certificate of deposit, be sure to contact your bank to find out the proper procedure for doing so. Nicole found herself locked into another twelve month CD when she needed the money now. If she broke the contract, she would be forced to sacrifice 180 days interest, whether earned or not.

(Note that Nicole’s story had a semi-happy resolution. She knows to speak up when something seems wrong. Countrywide wouldn’t let her out of the CD investment entirely, but “I was able to negotiate a compromise to transfer the money to a 3-month CD, rather than the 12 month CD. Although the interest rate is lower, I will be out in 3 months, which isn’t too bad.”)

Shop around. As with any financial decision, it pays to shop around for CD rates. You may find that your local bank actually offers a better deal on certificates of deposit than the online banks.

For example, my local credit union only offers 0.35% on its regular savings account, but its CD rates are competitive with (and sometimes higher than) ING Direct. Since I keep my checking account at the credit union, it might make sense for me to hold my CDs there. (In this case, however, they’re not high enough to make me switch; I’d rather track everything in one place at ING.)

Here’s my list of current CD rates from online banks.

CDs in Practice

I’m new to the certificate of deposit, but I can already see some uses for it. My $10,000 emergency fund, for example, is currently earning 2.75%. I may instead create a series of parallel CDs, as described above.

Also, I’m saving for my Mini Cooper. That money is also earning 2.75%. I’m nowhere close to buying the car, though, so I might as well put it into a certificate of deposit, too.

Though certificates of deposit are new to me, I’m sure that most of you have been using them for years. What tips and tricks can you offer? Do you have favorite sources for CD investments? How do you decide which money to keep there and which to keep in a savings account?

Identifying the Best CD Rates

It is important to think through how best to use a certificate of deposit in your overall financial plan, but it starts with understanding your goals and how a CD can help you reach them. Interest rates change constantly, so having up-to-date rate information is critical to identifying the best CD rates and terms to make the most of your investment. We have made the whole process easier in a convenient page that is updated weekly with the most current interest rates.

Different strategies can help you capitalize on fluctuating interest rates too.
A CD ladder can help you maintain a relatively constant income no matter how current CD rates change. A parallel CD strategy can help you maintain some accessibility to your funds during the term. Richard Barrington’s post can help you understand how to find the right CD but do shop for the highest CD rates and terms regularly to maximize your return. Bookmark this page as well so you can easily come back to our table to check rates and terms as often as you want.

Current Certificate of Deposit Rates

An online account is arguably one of the most convenient ways to manage CDs and, generally speaking, online banks offer higher rates than traditional brick-and-mortar institutions. The following listings of online banks are updated weekly too, and a little more information about each bank is given next to each listing as well. Credit unions and savings associations are also sources of CDs and other deposit accounts.

CD Basics

A certificate of deposit, or CD, is a deposit account that is generally considered a very low-risk investment. You might also hear it described as a time deposit because it is not a liquid asset that can be accessed on demand. Instead, the amounts deposited into a CD are expected to remain untouched for a specific period of time, which is the term of the CD. In exchange, the bank will pay you a fixed rate of interest.
Example investment: You put $10,000 in a 5-year certificate of deposit at an interest rate of 1.75%. At the end of five years, with interest compounded daily, you would have $10,914.

Early withdrawal penalty – The full value of the CD (your principal plus the interest earned) is accessible when the term has been reached; however, there is usually a penalty if you withdraw your funds before the end of the term. This means that the bank will keep a portion of the interest earned, which could also cut into the original principal balance if the CD has not accrued enough interest to satisfy the entire penalty yet.

For example, if a depositor wishes to close a one-year CD account after two months but the bank’s policy states that an early withdrawal penalty equal to three months’ interest would be due in that event, then the bank will dip into the depositor’s principal balance to make up for the shortfall between the interest earned and the penalty. Early withdrawal penalties vary from bank to bank, and this is another important item to consider as you shop for the best CD rates and open your new account.

Fixed interest rates – Even though interest rates change regularly, banks usually offer a fixed interest rate that doesn’t fluctuate, allowing you to lock in that particular rate for the entire term of your CD. Banks are willing to fix the interest rate, which is generally higher for certificates of deposit than for most savings accounts, because the funds remain on deposit with the bank untouched for that specific period of time. (In general, the longer the term, the higher the interest rate for a CD.)

FDIC insurance – The Federal Deposit Insurance Corporation insures most certificates of deposit so that the balance of your CD will be paid to you even if the banking institution becomes insolvent for some reason. The standard deposit insurance coverage limit is $250,000 per depositor, but it is important to verify the amount of FDIC insurance that applies to the particular CD accounts you open.

High Interest CDs that Can Double Your Interest Income

According to the FDIC, five-year CD rates (certificates of deposit or CDs) are currently averaging just 0.75 percent nationally. Fortunately though, not all CDs are created equally. Here are 10 CDs that offer at least double the interest income that today’s average account provides:

  • iGOBanking. Forget the awkward name and focus on the rate: Annual percentage yield (APY) is 0.35 percent on a five-year CD. iGOBanking is the online division of Flushing Bank. Though Flushing Bank is quite small, with deposits of less than $600 million according to FDIC data. The minimum deposit is just $1,000, so the iGOBanking CD is readily accessible. The penalty for early withdrawal is 12 months now. (Rate as of July 5, 2016.)
  • EverBank. EverBank has made a commitment to offering high interest rates by pledging to keep its CD rates in the top 5 percent of comparable products. With a 1.76 percent APY on its 5-year CD, it seems to be living up to that pledge. (Rate as of July 5, 2016.) EverBank’s 17 branches are all in Florida, but its products are available to a national audience online, and with more than $10 billion in deposits, they have built up a fairly substantial customer base. The minimum to open is a reasonable $1,500, but the only catch is a hefty penalty for early withdrawal — equal to 900 days of interest on its five-year CD.
  • Nationwide Bank. This online banking affiliate of the insurance giant offers a five-year CD with a 1.95 percent APY for balances between $0 and $9,999.99 and a minimum of $500 to open. That APY bumps up to 2.00 percent for deposits of $100,000 or more. These strong rates do require a long-term commitment, since the early withdrawal penalty is 360 days of interest. (Rates as of July 5, 2016.)
  • Barclays Bank. Barclays is an international banking powerhouse, and it offers a very competitive five-year CD with a 2.65 percent APY. This rate applies to its online CD, which has the added advantages of having no minimum balance requirement and the penalty for early withdrawals is 180 days. (Rate as of 05 March 2018.)
  • GS Bank. GS Bank’s five-year CD has a 2.00 percent APY and a user-friendly $500 minimum deposit to open. There is a 270-day early withdrawal penalty, so make sure you are committed for at least a couple years if you choose this product. (Rate as of July 5, 2016.)
  • BBVA Compass. Though most of these highest-yielding CDs are found at online banks, BBVA Compass also offers a traditional, branch-based alternative with 716 locations. The account minimum is just $500, and the rates may reach as high as 2.00 percent APY for a four-year term, depending on which branch location you visit. Rate collected within: Birmingham, AL: 0.50%(Rate as of July 5, 2016.)
  • Ally Bank. One of the leaders in online banking, Ally has built itself up to more than $40 billion in deposits. The 1.65 percent APY on its five-year CD is well over twice the national average, but there is a 150-day early-withdrawal penalty. Still this CD is an excellent choice even if you think that rates might rise within the next five years. (Rate as of July 5, 2016.)
  • Sallie Mae. Sallie Mae is probably better known for student loans, but it also offers online deposit products, including a five-year CD with a 1.80 percent APY and a $2,500 minimum deposit. The early withdrawal penalty is equal to 180 days of interest. (Rate as of July 5, 2016.)
  • Discover Bank. Though the Discover name is more commonly linked to credit cards, Discover Bank also has more than $40 billion in deposits. Its five-year CD rate offers an APY of 1.85 percent with a $2,500 minimum deposit to open and an early withdrawal penalty equal to what can be up to 18 months of interest. (Rate as of July 5, 2016.)

The above are not necessarily the 10 highest-yielding five-year CDs in the country. They were chosen because their rates are at least twice the national average, they are available in multiple states and they have relatively user-friendly websites. You may find additional options in your area, but the points discussed above can still provide you with some framework for what criteria to consider — including rates, minimums and penalties — when choosing a CD.

Have you been able to find CD rates that rival these? If so, please add a comment below. Don’t forget to include the details: name of the bank, state, rate, when you opened the account with this rate, and whether you can open the account online or must appear in person.

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There are 152 comments to "Best CD rates | Certificate of Deposit rates".

  1. Cameron F. says 31 January 2008 at 11:26

    Each time the feds cut rates, I keep being tempted to move some of my savings account into CDs. Then I remember that, in theory, that’s an emergency account, and that CDs aren’t sufficiently liquid for emergencies and I resist.

  2. DebtKid says 31 January 2008 at 11:36

    I agree with Cameron…as tempting as a slightly higher rate from a CD is, for emergency account purposes I don’t know if it’s worth the loss in liquidity.

  3. Moxiequz says 31 January 2008 at 11:36

    Cameron – you can set up a staggered CD system to compensate for that. In addition to a one month liquid emergency fund (to cover you your first month into a job loss or some other emergency) you would have a CD maturing each month of the year. Each CD would contain one month worth of expenses and mature shortly before the beginning of the next month. For example a $2000 dollar CD to cover your Feb expenses which matures on Jan 26th or so (to give you time to transfer the money into a more liquid account). I have something like this set up (though not yet for all 12 months – still working on that). The easiest term to use is 1 year. After a year you can decide if you want to roll the CD over or move it to another investment vehicle or account.

    It takes a bit more active managment of your finances but most of the work is up-front in setting up the CDs. After that it’s easy to just sit back and let them do their work.

  4. Ed says 31 January 2008 at 11:39

    While ING’s interest rate drop isn’t instant, it is pretty darn close. I like ING and use them, but I have noticed that they are about the quickest to drop when the fed does.

    @Cameron:
    Do a CD ladder so you can have access to cash every month or two (depending on the ladder you set up).

  5. Cameron F. says 31 January 2008 at 11:43

    The staggered CDs are a clever solution, but doesn’t that approach assume that the only potential emergency is being out of work?

  6. Josh says 31 January 2008 at 11:52

    For whatever reason EmigrantDirect does not drop as fast (or maybe just not as much) as ING. After the fed cut last week they did drop but only from 4.55% to the current 4.3%. Just a friendly FYI.

  7. Girls Just Wanna Have Funds says 31 January 2008 at 12:03

    This is a fantastic idea, I didnt even think about that. Still, Ive always been wary of CDs because of the penalties incurred if you need your money in a hurry, ie emergency. ING has disappointed me but hopefully when I check out bank deals, they’ll have something in the works. Unfortunately with all the rates going down though, it looks bleak. But the good idea as you’ve suggested is to lock it in a CD so you’ll be afloat even while rates go down.

  8. Moxiequz says 31 January 2008 at 12:11

    “The staggered CDs are a clever solution, but doesn’t that approach assume that the only potential emergency is being out of work?”

    Good point. I mentioned keeping one month’s expenses in the liquid account but you can keep more there if that’s more comfortable or if it’s likely your emergency might be an expensive house or car repair.

    It’s a trade-off. In general the more liquid your funds the less they’ll earn in fixed interest. So you have to weigh the likelyhood that you’ll encounter a *major* emergency (one that would exceed one month of living expenses) before your next CD matures.

    To be honest that’s what I do. I have about 3 months living expenses in a liquid account and then CD’s spotted throughout the year. I don’t expect any emergency – even a major hospitalization – would require over one or two months of living expenses *immediately*. Payment plans (or at the very worst family loans or credit cards) can cover the shortfall.

    Another option is to set up the CDs with minimal amounts (the opening minimum) and see how the whole idea works for you. That way you’ll have most of your emergency fund available and when the time comes to renew or cash-in the CDs you’ll have (hopefully!) more money to allocate to them. This way you can build up your CD ladder without locking up your immediate emergency funds.

  9. Anne says 31 January 2008 at 12:11

    IMO, an emergency fund is money you plan on not spending. So it doesn’t matter if it’s in CDs. In the worst-case, emergency scenario, you liquidate the CDs and pay the early withdrawal penalties, which usually means forfeiting a few months’ interest–not a big deal.

    One way to mitigate this is always to open a CD with only the minimum deposit. So if you have $10,000 to put away and the CD rate is valid on deposits as low as $1,000, open ten $1,000 CDs instead of one $10,000 CD. If you need $2,000 in a hurry, you can liquidate two of the CDs and leave the other $8,000 intact. Combining this strategy with laddering is even better.

  10. NickK says 31 January 2008 at 12:16

    A decent idea – but with early-withdrawl penalties, look out! Also, you’re playing the rate game, which subjects you to interest rate risk. If you lock up your money for a year or two (or longer), it’s possible the fed funds rate could rise and drop back down again during that time – leaving you unable to take advantage of higher rates in the interim. I like having maximum flexibility with my money.

    Smart in some cases, but probably a wrong idea for “emergency, on-hand” cash. I like to use CDs when I have a goal in mind for my money, like saving for next year’s Christmas shopping or a trip I want to take next summer.

  11. singlemomindebt says 31 January 2008 at 12:19

    I think once my finances settle down a bit (mid to late 2009), I’m going to explore the CD idea further, and perhaps look at some other investing options as well. I have so much in flux at the moment that I don’t dare tie my money up in any way because I’m quite sure when I’m going to need it. haha, I’m afraid of commitment, where are the one month CDs!?!

  12. Angie says 31 January 2008 at 12:27

    Anne hit the nail on the head. The penalty for early withdrawal of a CD is a few months’ interest, at least at the few insitutions where I’ve ever had them. For a $1000 CD at 4% annual interest, that’d be on the order of $10. Not a big bite.

    We have a little bit of a CD ladder. One of my financial goals for the next several years is to beef it up considerably. I find that having that money locked in is a nice barrier against spending it. When I think about “cash on hand” for everyday expenses, even unanticipated/atypical expenses, I don’t even usually think of the money we’ve got in CDs.

    However, when I do mentally map out what we’d do if we had a really big financial problem (like job loss), it is nice to know that it’s there if/when we need it.

  13. Heidi says 31 January 2008 at 12:40

    Check out this post I wrote last week on CD laddering – that’s what’s being described here. I have several clients who do this and it works very well.

    http://bankergirl.com/archives/56

  14. GDad says 31 January 2008 at 12:42

    Due to a variety of happy windfalls, I’ll be coming into a nice chunk of change in a couple of months. In order, the priorities are:

    1. Pay off remaining credit card balance.
    2. Put a couple kilodollars in son’s 529.
    3. Pay a couple of months ahead on car loan.
    4. Use what’s left to open six six-month CDs, so one matures each month. Consider this the emergency fund.

  15. Chris says 31 January 2008 at 13:12

    CD laddering is a great option, but BOA used to have a “no risk” CD that paid out at near regular CD levels, but allowed you to pull money out at any time (but in person) with no penalty.

    I’ve been using one as my “savings account” for almost a year now.

  16. Brian says 31 January 2008 at 13:17

    Hi. I’m the Brian mentioned in the post. I wanted to address a few things from the comments.
    1) About the emergency fund. First, my savings account is not exclusively my emergency fund. It’s my savings account. I have an emergency fund in a local bank that I’d have quicker access to than ING.
    2) Also about the emergency fund. Notice what I said in my email to JD: I only have 40% of my money in CDs. Id love to have put 100% in, but I specifically did not to be on the safe side. I’m just pointing out that you can shelter SOME of your money. If you only had $100 in your ING account, you could take out a $10 CD. ING doesn’t care. The whole point is to make those few extra pennies interest on some of your money.
    3) I wholeheartedly endorse the laddering comments. Again, ING has no minimums for CDs. You could set up a quick and simple ladder with $30 say. Get a six month, nine month and 12 month cd. Repeat every month. After 12 months, you’d have the same amount coming due every month as invested.
    4) About timing… look, it’s not foolproof… but all week if you paid attention to the stock market AT ALL, basically they were saying the rate cut was coming. So I took a calculated risk. If I was wrong, then eh, I was tied up for 6 months. But I bought a couple of days before the announcement and was rewarded. I’m not talking about logging in 5 minutes after the Fed announced… I’m talking about anticipating likely cuts and buying a couple of days ahead of time.
    5) Penalty for taking money out of ING CDs is 3 months interest, I think. Really not that damaging.

  17. Justin says 31 January 2008 at 14:03

    @Chris[13]

    As far as I know, that offer is still good. In fact, I just signed up for one with about 70% of my savings last week. I’m a huge advocate for using something like this, since the biggest risk of CDs – timelock – is almost completely mitigated out (the fine print states that a week’s warning MAY be required to withdraw without penalty). If one has a BoA account with a bunch of money just sitting around, there’s really almost no excuse to NOT have one of these.

  18. Jeffeb3 says 31 January 2008 at 14:04

    I don’t have any CD’s but if you were in a rate “slump” with CD rates you hold greater than the current CD rates, you can often sell them if you want you money out. I only know this because a friend of mine bought some CD’s at Edward Jones, and this is the system he described. Apparently, Edward Jones does the work of selling them for you.

  19. Mary Sue says 31 January 2008 at 14:18

    I’ve been using INGDirect CDs for my emergency fund. Every month I opened another one, term 6 months, because I used to have a serious ‘borrowing from myself’ problem. It’s not yet under control, but I’m working on it.

    I emailed and asked, ING has no limit on the number of CDs you open, and no limit on the dollar amount. So, I have a couple of $25 CDs. But they’re earing about 1.75% more than the cash in my savings account right now.

    I’ve stopped opening new CDs for a while, just ’cause the interest rate on the short-term CDs is the same as that for my savings accounts. And now that I have several dedicated savings accounts that I don’t dip into (and a Sonic Screwdriver Fund, that’s what other people would call a “Freedom Account”) I’m less likely to go spend-crazy.

    Just… smack my hands if I try to purchase a Nintendo DS Lite before March, okay?

  20. KC says 31 January 2008 at 14:18

    I know some people say keep your emergency fund completely liquid in case you need it immediately, however, I believe differently. In JD’s case he has (or plans to have) $10k. If he or his wife were to lose their job then they would need this money. But they wouldn’t need it all at once. You would need it as bills came due. So you could keep part of your emergency money (maybe 20-30%) in 6 month CDs. That way, by the time you get around to needing it (if you ever do), then it would have come due and you could use it w/o penalty.

    My father actually uses a series of six, 6 month CDs. One matures each month. If he doesn’t need the money it is automatically rolled over to another 6 mo. CD. This way he has something available each month if needed.

    Of course, everyone is different. Again, to use JD as an example, he is about to be self-employed. He’s probably a bit more at risk of needing his emergency fund than others (like a tenured teacher). In other words the amount of risk you have in your life would be a determining factor in just how liquid all of your emergency fund is.

  21. Dickey45 says 31 January 2008 at 14:25

    We got a CD a couple weeks ago at our local CU. The rate was 4.5% for a year. I’ve never had a CD before and didn’t realize that a rate cut could affect the rate that quickly. Our Money Market savings is at about 2.3%.

  22. Daniel says 31 January 2008 at 14:47

    Another vote here for ladders. With regular income coming in, I keep a spare month’s expenses in checking (or more if I know there’s a big expense coming up, like the new roof), and the rest in treasury bills. They pay less than CDs, but are also exempt from state and local taxes. They are incredibly easy to purchase through Treasury Direct, in 1-, 3-, and 6-month bills, $1K and up.

    I switched to treasuries when I got annoyed that my bank wouldn’t let me close a money market without charging fees (then waiving them when I called to complain), and not wanting to keep shopping for the bestest of CD rates.

    (Disclaimer: My credit union messed up my ladder by offering me a 7+% special rate last year, limited time offer.)

  23. Aleks says 31 January 2008 at 14:50

    Is a CD the same thing as a GIC?

    I keep somewhere between $3000-100000 in my savings account for emergencies and larger expenses. I don’t worry about ear-marking money, I just dump it all in the one account and take it out as needed. When my savings balance gets too high, I put it in something longer term.

    I used to use ING GICs for this, but the rate of return is not that great. As they’ve matured I’ve moved my GICs into a bond fund with the same company that manages my RRSP and long-term investments. Historically, the return has been better than one-year GICs and instead of being locked in, you merely have to deal with fluctuations in the market. But it’s not so volatile that the money won’t be there when I want it (for a car or a down payment on a house).

  24. Christine says 31 January 2008 at 14:53

    Another thing to be aware of when using short term CDs for emergency money is that you don’t loose that much if you have to cash them in before their maturity. Be sure to ask what the penalty is for early withdrawal.

    When I had less money than I do now I laddered some emergency money in CDs to get a little higher interest. I was pretty sure I wouldn’t need the money but not absolutely sure. As things happen when you are living on a small sum, my living expenses ended up being a little higher than I expected. Switching my son to a better day care was real important to me. So I went to the bank where I had CDs and said, “hey I need some of this money”. The banker very nicely sat down with me and figured out which CD I could cash with the least loss of interest. There was no loss of principal and at 4% interest, the penalty (I believe it was not all of the interest accrued but just some of it) was not that much either. Since this is the only time I needed the CD money for an emergency it was well worth the extra interest I got the rest of the time.

    Even if something more catastrophic had happened, the loss wouldn’t have been that great.

  25. Sarah says 31 January 2008 at 15:09

    I can understand the argument against CD’s and the early withdrawal penalties, but I look at it this way: It’s not a REAL emergency if it’s not worth forfeiting the interest. I keep a lot of my emergency money in CD’s because it keeps me honest and removes temptation. I can’t just “borrow” $50 here and $30 there when I come up short at the end of the month. And, in the event of a true emergency, I won’t care about forfeiting interest because it will be a true emergency. Make sense?

  26. Hopkinton MA Real Estate says 31 January 2008 at 15:12

    The difference in rates between a CD and a money market fund are really not great enough to want to have the money tied up for an extended period. Unless this is money that you have no need to utilize for a generous period of time why would you do it. The spreads used to be greater and it made more sense….I don’t see that today. There are a few places where you can get a really good interest rate on a money market account. Eloan and Countrywide come to mind.

  27. Dave says 31 January 2008 at 15:14

    re: CD ladders – some talked about setting them up to be available shortly before the end of a month, in case you needed the funds. This is a great idea but it actually doesn’t work very well in practice, at least for the shorter-term CDs. They may be marketed as 3 or 6 month CDs, but they are actually 90 or 180 days. So if you opened a 90 day CD on Jan. 1 this year, it’d come due on Mar. 30, and when renewed, the new date would be Jun 29, and so forth. It doesn’t take many cycles before your CDs are all coming due at odd days in the middle of the month. Still worth doing, just don’t expect that you can set it up so you’ll always have your funds available on a certain day of the month (i.e. the 23rd).

  28. Dave says 31 January 2008 at 15:36

    I must say that I am quite upset with INGs rate drop on savings accounts. I realize that other banks are doing this as well, just not quite as much as ING. That being said I did look into the CDs on INGs website. It appears that all of ING’s CD rates are 3.65% which is the exact same as their savings rate. Now why the hell would anyone in their right mind take out a CD and get locked into a 1,2, 5 year commitment when you can put your money into a savings account and have access to it. CDs generally do earn a higher rate but you sacrifice accessability. What is up with ING? Do they think their customers are that stupid?

  29. Anne says 31 January 2008 at 16:53

    @Dave: Well, as this post points out, the CD interest rate is fixed for the term of the CD, while the savings account rate can drop at any time.

  30. Ed says 31 January 2008 at 18:04

    @Dave,

    I expect ING to be dropping their savings interest anytime up to 0.4% to match what the fed did. The CD rate will probably stay the same or drop a hair and that will be the difference in earnings between the two.

  31. Brett says 31 January 2008 at 18:47

    Working for a large bank, I’ve suggested that to several customers who still continue to keep large sums in a savings account. Most give me the the same response about how they’ll come in “next week” to set one up, yet I’ve seen the rates for our CDs drop every day or two since the fed cut interest rates. Gah! It’s so frustrating to see people with more money than they know what to do with not take simple advice because they’re more worried about me trying to “sell” them something.

    If you want to make the most out of your money and can handle keeping it away for 3 to 6 months at a time, why not?? There’s even CDs out there that will keep your funds “semi-liquid” allowing to take money out at certain times without getting a penalty fee.

  32. Frugal Dad says 31 January 2008 at 18:47

    Wish I had locked in a higher rate sooner! I’m always concerned with the early cash-in fees associated with CDs, when I’m probably losing out more than that in a much lower interest rate in passbook savings accounts.

  33. Heather says 31 January 2008 at 18:59

    a money hack a friend taught me for her emergency savings, that you might consider:

    Open three three-month CDs, each with a third of your emergency fund. Have each one roll over on the same day of the month, for three months in a row. That way you have your savings secure, earning a higher interest rate than a savings account, but still easier to get to than a longer term CD. I did this with my emergency savings at my credit union, and when I had to cash them out, I was only penalized on 3 months interest on 1/3 of my fund, rather than the entire amount. Make sense? It’s a bit of a psychological hack, but I found it made me a lot less likely to dip into the emergency fund than if it was just in a no-penalty-for-withdrawal savings account.

  34. Brian says 31 January 2008 at 19:01

    Frugal Dad:

    What if the fees associated with CDs are lower than what a rate drop would have cost you? I’m willing to bet… CDs win.

  35. Cinnamon J. Scudworth says 31 January 2008 at 19:40

    It seems like a lot more micromanagement for not much (if any) more interest than you would get from a decent money market fund. It’s not FDIC insured, but MMF rates decline more slowly than bank savings accounts, just like CDs, precisely because their underlying holdings are CDs and other fixed-term debt instruments.

  36. Early Retirement Extreme says 31 January 2008 at 19:54

    Erhm, doesn’t the CD rates drop with the fed rate as well? While it might have been smart to lock in a CD rate when the fed drops their rate, the opposite holds, when the fed raises their rate. If chasing a few extra basis points (compared to a savings account) my vote is on the money market fund as well.

  37. escapee says 01 February 2008 at 06:30

    I opened an ING CD in Nov when I had about 12k in my ING direct savings account. When it matures I’ll have earned $236 in interest. That’s free money!

    One word of caution- remember you can’t touch the money before maturation so make sure you have enough extra in your emergency fund. ING charges a 3 months interest penalty for early withdrawals, so if you withdrew too early (ie before 3 months) you could actually *lose* money and end up w/ less than you started with!

  38. elisabeth says 01 February 2008 at 07:52

    one of the banks I work with has CDs to which you can add money — so if rates go down, I can put funds into an existing CD with a higher rate instead of the rate that is current. Also, if you watch for “specials,” you can often get some very nice rates even for short term funds, (one back here ran a special for its anniversary that was more than a point above rates at other banks at that time span..). CDs are more of a “snowflake” than a snowball in terms of savings, but they do add up over time…

  39. SJ says 01 February 2008 at 09:47

    CDs work really well for me as an emergency fund – we have about 12K in CDs, plus a “liquid” emergency fund with on average $7000 in it – as other posters have said, I find myself using that fund to cover larger type expenses that come up here and there over the year, but the CDs keep me from touching the larger pot unless it was a TRUE emergency, and then it would be worth forfeiting a few months of interest.

    I use a credit union, and they constantly have some sort of promotion to get a higher rate on one of their CDs – so my CD ladder isn’t exactly a ladder, but I have an assortment of three 12-18 month CDs. It doesn’t seem like much interest in the short term, but the key here is that I’ve basically left them alone and reinvested over the past few years, and it adds up – thus making my emergency fun that much stronger (necessary, as my living expenses get larger with kids).

  40. MITBeta says 01 February 2008 at 15:56

    I use CDs for my emergency fund as well. But unlike most here, I have them laddered in 1-5 YEAR CDs. So on the 5 yr CD I have a 5.3% interest rate. I don’t know what the penalty is, but I’m not planned to EVER have to use that money. If I do, I’ll eat the penalty and be glad for it.

    The problem now is that I’m wondering what to do the next time a CD matures given that rates are so low. I don’t want to lock in 3% for 5 years…

  41. Tom says 02 February 2008 at 13:17

    Has anyone invested in Intervest Bank before? They show up a lot with great rates but I never hear anything about them.

  42. lorax says 02 February 2008 at 17:36

    Careful with those high-rate banks. Many are based offshore and aren’t regulated by US laws.

    BTW: If you have many short term CDs that are automatically rolling over, you might just look into something like Vanguard Prime money market fund. They do the CD investing for you. There’s a downside risk, if rates fall, but CDs have a downside risk if rates rise too.

    Prime MM is yielding around 4.3%.

  43. Pat with SPI says 03 November 2008 at 05:18

    I really have to start looking at CDs because I use paypal to hold my emergency funds, and it used to be above 5% interest, but now it’s almost below 2%.

    This is a perfect and very timely post. Thanks J.D!

  44. Robert says 03 November 2008 at 05:30

    I’ve been considering setting up a series of CDs (a ladder as you refer to it) with my emergency fund. I’d like to get a rotation going where I have a 1-year CD maturing roughly every other month, and then I can gradually bump them up.

    Since my goal is to have an emergency fund to cover 1 year’s worth of expenses, I’m not sure I want to go with longer term CDs. If I do need to survive for a year due to a layoff, I’d rather not have to worry about breaking CDs, but simply let them expire and take the cash over that year as I look for work.

  45. Pete says 03 November 2008 at 05:39

    “In fact, many (most?) banks penalize the interest amount, even if it isn’t earned (meaning you could lose part of your principle if you close your CD early).”

    Dang. I’m going to avoid CDs at all costs. I would hate to lose my principles. 😉

  46. Sam says 03 November 2008 at 05:51

    We recently transferred $5000 from our ING emergency account to an ING 1 year CD to get a better return. It was super easy.

  47. Don says 03 November 2008 at 05:55

    Right now, dollarsavingsdirect.com is offering 4% if you open with $1000 (but there’s no minimum balance). It’s the same bank as emigrantdirect.com, so I’m not sure exactly why the latter is only offering 2.75%. In any event I now have accounts at both and I’ve transferred to dollarsavingsdirect.com to earn as-good-as-CD rates with complete liquidity.

  48. Sammy says 03 November 2008 at 05:57

    Saving is good! It makes me feel a little more secure.

    However, savers in the USA penalized with low interest rates.

    The interest rates you quote on CD’s for example–the rate of inflation is higher. The interest you earn is taxable, too.

    What’s a saver to do?

  49. Megan says 03 November 2008 at 06:17

    I have to agree with Don. I have a dollar savings direct account and wouldn’t dream of losing the liquidity for a lower interest rate. Even with the recent changes in prime, the rate has stayed at 4%. JD, I’m amazed that you haven’t made a post about this new product since the rate chasing thread had such a response.

  50. shalom says 03 November 2008 at 06:23

    One thing I like about ING is that their CDs have no minimum deposit requirement, so you can open them in amounts as small or as big as you like.

    Our emergency fund is in a CD ladder — 12 CDs, each with a 1 year term, 1 CD maturing each month. Also at ING, if you let your CD automatically renew (or “roll over”) for a new term, they often will give you an extra .10% in interest — so, if their normal rate is 4.25% for a 1 year CD, when you roll over a CD, they give you 4.35%.

  51. Jim says 03 November 2008 at 06:26

    I’ve been using CD laddering for my emergency fund for years. I have 6 6-month CD’s, maturing sequentially over 6 months and auto-renewing.

    The beauty of this is that I only have access to one months worth of my emergency funds at a time, preventing me (or at least making me think about it) from going through the fund too quickly.

    Luckily I have not yet had to tap the funds and my fund has automatically increased with my cost of living (for my monthly bills at least).

  52. Seth says 03 November 2008 at 06:41

    Good timing on this post. I opened a $5000 6 month CD at HSBC (4% APY) on the 28th. This was a little more than half of our current emergency fund. In retrospect, I wish I would have done some sort of laddering or paralleling. Maybe next time..

  53. Avi says 03 November 2008 at 06:45

    But what happens if interest rates go up again? Just two years ago, high-yield savings accounts were garnering 5+ and HSBC was even offering 6% for a few months!
    At that time, the CD were all barely above 4%.
    If this happens, does it makes sense to withdraw from the CD and put it back into the savings account?

  54. Richard says 03 November 2008 at 07:18

    We’ve got a 0% interest car loan ($380/month), but we have $6000 in our savings account set aside to pay off that loan.

    I have been opening 6,9,12 and 18 month CDs each month in order to set up a ladder.

    Once the CDs start maturing we’ll be paying off our loan with a CD each month, and be able to stretch that $6000 a bit further.

    All my CDs are with ING, since they don’t have a minimum amount to open a CD, and many other places have a $500 or $1000 minimum.

  55. J.D. says 03 November 2008 at 07:23

    Ouch. Thanks for the spelling correction, those of you who pointed it out. I wish I could say it was a typo, but it wasn’t. It’s fixed now, though! 🙂

  56. WiseMoneyMatters says 03 November 2008 at 07:32

    It may also be good to spread the CD’s out over time. For instance, If you have $6000 to put in, deposit $1000 ever month for 6 months in 6 month CD’s. For the first 6 months, you will be losing a little possible interest but after that you will continually have access to $1000 in case you need it.

    Or if you are saving $500 per month, deposit the money every 2 months for the same effect but on a 2 month schedule.

    This way, you have multiple smaller accounts in case you HAVE to draw them earlier but if it’s a small emergency under $1000, you can pay for the emergency on your credit card and then pay off the credit card within a week or two when your next CD matures.

  57. LWM says 03 November 2008 at 07:40

    I’ve got two $10,000 CDs I set up with 6 month terms. They’ve each rolled over once. I’ve “earned” $600 just by leaving it alone. It really couldn’t be easier. And because I’m a procrastinator, I’m pretty much guaranteed to miss the deadline for withdrawing the money (unless I really need it; that’ll keep it in the forefront of my mind) and it’ll roll over automatically.

    I love the idea of the 12 CDs ladder!

  58. Seth says 03 November 2008 at 07:49

    For me the extra few dollars a year doesn’t outweigh having the money tied up with possible penalty for withdrawl. I prefer to use a money market mutual fund. This may change one day but right now I have to interest in locking in these historically low rates for any amount of time.

    Side note: For all of the ING advertising on this site, including this article, I’d say the odds of ‘winning’ that CD weren’t so far fetched. 😉

  59. Jeremy says 03 November 2008 at 07:49

    CD laddering is a great way to go, but I disagree with sticking with one bank for ease. With internet banking, it is easy to set up and track CDs at an array of banks. I have a 5 year ladders at 6 month increments. All 10 CDs started at my credit union. Now I have CDs at 8 banks based on who had the highest rate at the time a given CD expired. Bankrate.com lists the best rates. While ING offers 4.25%, GMAC offers 5.15% for the same time duration. Both are FDIC insured, and GMAC only requires $500. This is not a plug for GMAC but rather an endorsement to go with the highest rate you can get from an FDIC insured institution.

  60. Sara says 03 November 2008 at 07:51

    I put much of my savings for my house down-payment into CDs. My bank has special, higher interest rates for people who have at least $10,000 total (in all accounts) in that bank. These rates might not show up on sites like bankrate.com, so it could be worthwhile to check with your bank.

    In general, the longer the term, the higher the interest rate, but a lot of banks have CD “specials,” with a special high rate for a certain term. For example, my bank currently has a special on 9-month CDs, for which they are offering 3.778% — much higher than the 1.833% for a 12-month CD at the same bank.

    It is important to make sure the CD is FDIC-insured. If it is, it doesn’t matter what bank you use. You can pick the one with the highest interest rate from Bankrate.com.

  61. Scott says 03 November 2008 at 07:56

    Like others, we have 6 staggered 6 month CDs, each with enough to get through 1 month with no other income (e.g. in case we lose a job). But we _also_ have, not in CDs, enough to cover the non-expected/non-regular portion of our emergency fund. We’ve decide this is an important part also. We decide on a peak amount that we might need from our emergency fund, then put that much minus the monthly amount (which would come from the monthly CD) into this extra account. Now we just hope we don’t have a peak emergency _and_ lose a job, but we’re working towards that.
    Also, we’re working towards moving those 6 6-monthers up to 12 1yr CDs, but that takes time.

  62. Ken says 03 November 2008 at 08:06

    One word of caution about opening multiple CDs at ING Direct –

    If you fund the CDs using your savings account, this will count as a withdrawal. So you could quickly reach your maximum 6-per-month withdrawal limit.

    Some wonder why to lock themselves into an ING Direct CD when DollarSavingsDirect is paying 4% APY for a liquid savings account. With the current rate environment, these savings account rates may not last much longer. With a CD, the rate is locked until maturity.

  63. rmummy says 03 November 2008 at 08:20

    In Canada we do have CDs, their maximum term is less than one year and they usually have a higher minimum than GICs (e.g. $5000 for a CD and $1000 for a GIC).

    Many of our local banks do offer a rate ‘bonus’ if you have other business with them, or are willing to move other business to them. I have seen the bonus as high as 0.75%, not bad if you are flexible with your record keeping.

  64. Rae says 03 November 2008 at 08:21

    Thanks for this article! I’ve held ING CDs for about 3 years and have been very happy with them. With the CD ladder, I’ve never had to break one yet – I just use or renew as they come up. Your advice about the rate drop inspired me to open another one just now!

    Oh, and congrats on the ING CD – isn’t it fun to win stuff?! 🙂

  65. adora says 03 November 2008 at 08:30

    Note: CD in Canada is actually called “Term deposit”.
    GIC is more of an investment.

  66. J.D. says 03 November 2008 at 08:33

    Thanks, folks, for the clarifications on CDs and GICs in Canada. I propagated some misinformation picked up during research. I’ve edited the reference from the article to avoid further confusion. You guys are awesome!

  67. Dustin Brown says 03 November 2008 at 08:43

    This may seem like common sense to most of you but I recently opened a CD with $10 under the assumption that I could continually add dollars to it over time like I do my savings account. Not the case. It’s a one time deposit, then you basically don’t touch it until it matures. Bad me for not reading first.

  68. Julie says 03 November 2008 at 08:46

    I have CDs with ING on a rotation schedule, my goal is to have 12 1-year CDs that mature in turn at the beginning of each month. I have 8 so far. The idea being that if for any reason my monthly income (paychecks) were disrupted, I could cash the CDs to cover my bills.

    However, I find myself now in a bit of a bind because I need a few thousand dollars all at once for an emergency and I’m going to have to take penalties on a couple of CDs to get the funds. Still better than going into debt, though, right?

  69. amanda says 03 November 2008 at 08:47

    JD, great post. We have four CDs with ING. They come up every three months. We took a portion of our e fund and put it into CDs. We haven’t touched our e fund but one time in the past two years that we’ve had it. If the worst happened, we could liquidate our CDs and take the penalty. ING CDs are great products and easy to use.

    I want to win one too!

  70. KurtMac says 03 November 2008 at 09:18

    Its also worth noting that one should read the fine-print on CDs. Most banks require that the money you put into opening a CD be “new money.” That is, money that isn’t currently held at the same institution.

    Also, I’ve noticed some brick and mortar banks in my area advertise great CD rates, but when you go in to inquire about opening one they say that you also need to open a checking account with them in order to get the promotional rate.

  71. kitty says 03 November 2008 at 09:32

    @sammy: “The interest rates you quote on CD’s for example—the rate of inflation is higher. The interest you earn is taxable, too.
    What’s a saver to do?”

    Sammy, there are savings that are there for when you’d need money soon and there are investments where you could lose money but may get higher return. Still there are some safer options:

    If you want some protection against inflation yet don’t want to lose money, you can consider government tax-protected securities such as I bonds that determine rate based on fixed portion (current 0 – ouch) and a portion based on inflation — but you are only to invest $5000 a year. There are also TIPs that pay a small interest and increase your principal by the inflation amount every year. You can find out about all of those if you go to http://www.treasurydirect.gov. Government bonds are safer than CDs as they have full tax power of the US government behind them.

    If you can stand (a little) risk but not as much as in the stock market, you can look into bonds – both municipal and corporate. Because of current credit crunch, there are some attractive yields there. Just last week I bought $5000 worth of 10-year old AAA-rated municipal bond with a tax-free YTM (yield-to-maturity i.e. yearly yield that takes into consideration today’s cost of the bond) of 5.36%. This yield is gone now – my bond is already up – but there are still some 5.016% AA-rated bonds. This is tax-free; both federal and state if you buy your state’s bonds. If you keep to AA and AAA bonds, the chance of default is very low.

    Corporate bonds are riskier, so you have to investigate the company. The yields now are very attractive, though, with some good companies paying 9.7% and 10.3% (e.g. American Express, Prudential, Goldman Sacks); Verizon is paying over 8%. If the company goes bankrupt, you lose your money, so there is some risk. I just transferred another $5000 into my brokerage account, and I am thinking of buying one of these bonds.

    Now, bond interest is usually is simple interest simply paid to you as income twice a year. So you don’t get advantage of compounding, but then you can take the interest bonds pay you and invest it in something else.

    Another thing. If you call bonds to maturity, you get your principal back (unless bond issuer declares bankruptcy); the interest gets paid to you as income usually twice a year. In the meantime, however, the value of the bonds fluctuate. Usually, the value goes up when the interest rates go down and vice-versa. So if at some point you decide you don’t want to hold to maturity, you can resell at whatever the value is. For example, if you need the money, or if the bond resale value goes up and you want to take advantage of it. BTW – the $5000 municipal bond I bought, I paid $4995 for, but now a week later it’s resale value is $5250 (which makes resulting yield-to-maturity smaller since the bond pays fixed interest amount; it was larger relative to $4995 but is smaller relative to $5250); if it goes up more I might even consider selling it. Of course, then I’d have to pay taxes on capital gains.

    If you want money soon, you can build a bond ladder – some bonds that mature next year, some that mature some years in future. Again, if you need your money you can always sell the bond, but then you get whatever value it is selling for at the time which could be above or below you got it for.

  72. David says 03 November 2008 at 09:58

    I believe the section titled “Protect yourself with parallel CDs” is incorrect (at least it is with my bank).

    If I took out a $5,000 CD, and a $1,000 emergency came up, I could recover $1,000 plus the penalty on the $1,000 and leave the rest in the CD. I don’t have to cash in the whole CD and pay the entire penalty.

    I don’t know if this policy is common.

  73. Don says 03 November 2008 at 10:00

    One thing about Savings bonds for emergency fund that might come up (it did once for me)… Most people don’t declare their interest income every year on their taxes, they just defer it until redemption.

    What that means is if you have an emergency that you cash your savings bonds to pay for, you’ll owe extra tax come tax time. Now depending on the situation that might not be so bad. If you lose your job, you’re paying less tax anyway. But if it is just money for an unexpected expense, that might be different.

    I still have a significant portion of my emergency fund in savings bonds, but I also keep a chunk in online savings accounts now so I pay part of my tax “as I go.” That is the part I would access first for emergencies.

  74. Ron says 03 November 2008 at 10:37

    Ok this is a dumb question but let’s say I open a 12 month CD for 4% and I have it automatically renew at the end of the 12 months. When it comes time to renew will it stay at that same rate or will it reset at that time to the current rates when it matures?

  75. Jeremy says 03 November 2008 at 10:42

    In my experience, the rate resets. These details are usually provided you, via mail/email, a few weeks prior to the CD’s expiration. With my credit union, you have an option at the outset for either renewal at current rates or deposit into your checking/savings account. The devil is in the details, hopefully provided at sign-up. If not, consider another institution…

  76. Adam says 03 November 2008 at 10:50

    Is there anything like a CD in the UK, anyone?
    I must say I’ve never even heard of them.

  77. alison says 03 November 2008 at 10:57

    Ron, Jeremy is right, the rate resets. You can’t hold on to a high rate forever. This is why you want to make sure that if you don’t want a CD at that rate, you don’t let the CD roll over. This is especially important since CDs can become much more attractive or much worse investments at any given time based on rate fluctuations.

  78. Angelo says 03 November 2008 at 11:17

    I signed up for a CD from Emigrant Direct today. Actually, I noticed in their terms they say that the account (any account) can possibly be considered “abandoned” if there aren’t deposits or withdraws. That’s kind of scary.

    One thing that I really wonder about with these online banks is, what do you do if you want to close your account? Is there a fee associated with deciding to leave their service?

  79. Mary Sue says 03 November 2008 at 11:19

    My emergency fund is in a series of laddered CDs at INGDirect. But I didn’t open them all at once, I started out every paycheck opening a new 6 month CD with $50. INGDirect has no minimum deposit for CDs, and frankly, when I started this scheme, I was lucky to be able to scrape up $50 a paycheck for a CD.

    A year and a $700 new computer later, I went from a negative checking account balance to 17 CDs totaling about $1600. Voila, I’m a *saver*!

  80. Lisa C says 03 November 2008 at 11:52

    Is the interest in a CD compounding or should I be taking monthly disbursements to my savings account to earn interest on my interest?

  81. sara says 03 November 2008 at 11:54

    You can also check out risk-free CDs, which some banks offer (I have one at Bank of America). With the risk-free CD, you pay no penalty for withdrawing funds early (with funds available within 7 days)…so a tad less liquid than a savings account, but still much better than having to pay the penalty with a normal CD.

    It has a slightly lower interest rate due to the fact that it’s risk free (but still better than a savings account), so I have $5000 in the risk free for emergencies and the rest of my savings in regular CDs. To be honest, I am probably being somewhat paranoid about putting away $5000 in emergency money, but I’d rather be safe than sorry. 🙂

  82. Eden says 03 November 2008 at 11:58

    The rate of return doesn’t seem worth it to me for the lack of liquidity. It’s barely better than a typical money market account where you have access to your money at any time.

    I sincerely hope no one would lock up their money for 5 years at 4.25%

  83. Tyler Karaszewski says 03 November 2008 at 12:02

    I have to wonder about people using a CD as an emergency fund. I fear people may have lost sight of the purpose of an emergency fund — either that, or they’re OK taking an early withdrawal penalty in the case of an emergency.

    Keep in mind that an emergency fund is there for *emergencies* — what if you crash your car and need a new one, or burn down your kitchen, or get sick and have thousands of dollars in medical bills that aren’t covered by insurance, or lose your job? These are the reasons you have an emergency fund, presumably because you’ll need to be able to get at money quickly if these things happen. That’s something you can’t do with CDs (unless you accept the penalty).

    I recently realized that my $10,000 emergency fund was overkill. It had become a generic savings account, and although I’ve withdrawn from it several times for genuine emergencies, I’ve never had to withdraw more than about $1000. I realized that the chance of me needing more than $5000 in an emergency is exceedingly unlikely (I’ve never spent $5000 on a single thing or event in my life except cars), so I reduced my emergency fund to $5000 and put the remainder towards other goals.

  84. Jeremy says 03 November 2008 at 12:11

    I agree with Tyler in part, namely having your entire emergency fund in CDs is not the best course of action. A true emergency fund should be more liquid than are CDs. I suggest a money market account for a portion of the emergency fund with the rest is laddered CDs. The money market funds can be used for sudden emergencies ($500 for a new radiator) while the CDs can hold the bulk of the funds equal to the 3-6 month equivalent it is suggested that people save for true emergencies.

    This way, you keep your emergency funds in a safe investment while getting a bit higher returns than most money market accounts offer. Then again, this is all a tad academic as having emergency savings, in any form, puts one ahead of the pack and the cost of early CD withdrawal is much less than having to borrow.

    Note: 3-6 month is aspirational and not a reflection of where I am at presently…

  85. Angelo says 03 November 2008 at 12:34

    Lisa: the APY is already calculated for you, but yes it does compound. When a year is up, the APY will be whatever it is.

    Eden: why not do both? If you don’t need all your money to be liquid, why not get a little bit extra on some of it? It’s not that hard to do with the online services.

  86. frugalchick says 03 November 2008 at 12:46

    Just a heads up: Capital One is offering a 3.75% APY on their online savings account through Costco.

    Don’t know when this will last but the rate is better than locking your savings in a CD that’s earning less than 3.75% and is not liquid.

  87. Jeremy says 03 November 2008 at 12:49

    agreeing with angelo, the higher rates of cds provide a little bit more, so why not?

    also the idea of laddering, in part, is to avoid market timing. like stocks, it is hard to predict interest rates. in 2002, you cd from 1998 locked in at 4.25% for a decade, looked pretty swell.

  88. Justin says 03 November 2008 at 12:58

    I also want to point out that Bank of America has a “No-Risk CD”. It has lower interest rates (right now lower than ING savings, but not always) than some of their other products, but given at most a week warning to the bank, you can withdraw any portion of your CD with no penalty.

    I currently have the majority of my emergency fund in two of these CDs, though I’m thinking I might end one and move it to a traditional CD with a higher rate of return.

  89. the girl @ love God, not money says 03 November 2008 at 14:20

    I have been wondering for a while exactly how CDs work. I have about $10k in ING Direct savings for no reason, and thanks to this post, I’m considering looking into a CD. Thanks for the post!

  90. Cathy says 03 November 2008 at 14:41

    I have about 60% of my emergency funds in CDs that are divided to come due about a month apart. This leaves me with about 3-4 months worth of fast cash emergency funds, and if something really catastrophic happened, I can break open the smallest CD I need and leave the rest alone. I get the best of good interest rates and security if I need it.

  91. Barry says 03 November 2008 at 14:47

    What a timely article! I just got done setting up a CD ladder from my ING Orange account, they have a real cool page to do that all at one time. Figured I better get on the ball before rates go down even lower.

  92. Dave says 03 November 2008 at 14:49

    I think that when looking into the six month cds you have to consider something like an Etrade savings account at 3.30% interest. You are loosing .20% from the 6 month CD from ING, but it keeps you more liquid.

  93. E says 03 November 2008 at 14:54

    My parents taught us about CDs when we were kids – I think I had one when I was 12. Then I forgot about them until just recently, and I opened two CDs with ING. I made a mini-ladder without even knowing what I was doing; it just seemed smart to me to put some in a 6mo and some in a 12mo, given the balance between better interest and a need for liquidity. Now I know about ladders, I think they’re cool!
    🙂

  94. Angelo says 03 November 2008 at 15:42

    Barry: I’m not sure if they already reflect the current Fed 1% interest rate. If so, I doubt they’ll go much lower, but still better to get your interest going early.

  95. Sammy says 03 November 2008 at 15:48

    kitty: thanks for the information on interest. I am going to look into some of those!

  96. Bill says 03 November 2008 at 16:22

    CDs are a horrible investment device. And worse for an Emergency Fund. What happens when that emergency comes along and you need access to your money? Now instead of easily pulling the money out of the bank, writing a check, or pulling out of the ATM you have to go through the trouble of cashing them in, losing money earned and maybe even some of the original money because the “expected” emergency happened. Bad, bad idea.

    Besides, if you have a good credit union you can earn more than 4% interest on a basic checking account. I currently earn 5.25% on mine.

    My point is why risk any of your money at all on crap CDs when there are other (and not to mention more liquid) ways to earn the same or more interest. Doesn’t sound smart to me.

  97. Nick says 03 November 2008 at 17:15

    CD ladders are an awesome way to put away and grow your money, if you’ve already got an ’emergency fund’ in place. You’re going to have access to at least some of your money every six months, and during that time you’ll be earning a much better interest rate than high yield savings accounts.

  98. Jenny(usagi) says 03 November 2008 at 17:44

    I also have a cd ladder going for my emergency fund. I started out setting up a 3 month, 6 month and 12 month cd every month until I had one maturing each month of the year. As they renew I’m converting them all to 12 month cds. So every month I have access to part of my emergency fund. Right now I have amounts ranging from $50-$500, but I’m first bumping them all up to $500 and eventually want to get them all to $1000 so I can pay all my basic needs for a year even if my fiance and I both lost our jobs. It also keeps us from touching the emergency fund unless it’s really an emergency.

  99. Cathy says 03 November 2008 at 18:32

    Bill: I don’t know how it is at other banks, but ING CDs you just click a button that says redeem early, and that’s it. The penalty for withdrawing early is 3 months interest. That’s it. It’s a very small penalty for an emergency if my 3-4 months liquid reserve doesn’t cover it.

    If I had an emergency where I didn’t have time to log in, click the redeem early button, and write a check, I’m probably being held up and it would be a good thing the CD money is inaccessible.

  100. Matthew Varvaris says 03 November 2008 at 18:48

    CD’s are not the best option for short-term funds. Depending on the amount you invest, the (if it is only 10k or so) it probably isn’t worth it. If you should need the money early a lot of times there are fees attached. Plus that same 10k at 6-months or a year at 2.75% compared to 3.5% is not that much of a difference. One upside to most of these fees is that they are usually tax deductible, but you still lose money. I agree with Bill that there are more liquid ways to earn the same interest.

  101. Cathy says 03 November 2008 at 20:12

    To each their own, of course. I have a years worth of emergency savings – 3 months worth in liquid funds. I can’t foresee that I would need all of that upfront. If something happened to my job, I would be guaranteed my CDs would mature at intervals where I could pay my bills – like getting a salary or loan from myself. If I lost my job, it would guarantee that I would have to budget my money until the next CD matured. By then, I would have hoped to have a new job. But if not, I’m covered.

    I guess it’s sort of like freezing credit cards for some people. If half my emergency fund is locked away in untouchable funds, then it prevents me from thinking, “Ooo I can buy that new Macbook!”

  102. Becky says 03 November 2008 at 22:15

    I rarely brag about being deployed to Iraq, just because it’s not that much fun, but after 30 days in a combat zone, servicemembers can put 10K in an account (called the Savings Deposit Plan) that makes a gauranteed 10% interest. It will continue earning interest for 90 days after we return from the combat zone.

    There is no CD rate better than this! Any servicemember who does not take advantage of this account is throwing money away.

    Your tax dollars at work, and I for one appreciate it!

  103. Frank says 03 November 2008 at 23:03

    I feel so alone here. No CDs on my ING account. Now I have a New Year’s resolution for once.

  104. Andrew says 04 November 2008 at 06:04

    Adam. CDs are similar to fixed rate accounts in the UK. Some good rates at the moment, Anglo Irish Bank Corporation International) Privilege Fixed Interest account 7.21% for 12mths. Much better rates than the average UK savings acoount. I just opened a Halifax International regular saver account which is 10% for 12 months.

  105. Ron says 04 November 2008 at 07:56

    Someone else said to check your local credit union. They don’t always have better CD rates but at my credit union they have 5% on a checking account up to $15k.

    I have a checking account that I opened at another bank to get $100 bonus. no minimum and I just need to have at least $250 a month in direct deposit. We use this account to build up savings to pay for our life insurance (2x a year) and our propane that we pre-buy in May for a discount. What I do is take that $$ out each month (leaving only $100) and deposit it in my credit union at 5%. But I don’t add it to my software program that I track our accounts. I keep a separate ledger for that money in there. I can see the true balance online when I pay bills, but I follow my program as the “balance”. Then when I need that cash I can get to it.
    This kind of tricks me into not having it on the books to spend on other things while still earning 5%.
    Kind of silly but it works for me.

    I do have a couple of CD’s that were set up for me in an IRA account. One is at 5.01% and will mature in 2010 and the other is at 2.5% and matures in May. Since these are in an IRA account I just keep rolling them over.

  106. Mary Sue says 04 November 2008 at 12:49

    It seems to me the folks who are protesting sticking EFs in CDs are people who are thinking of traditional CDs and traditional dollar amounts.

    INGDirect really does make it simple to yank the cash, as I found out earlier this year when I needed to buy a new computer (yes, a computer is a need in my world). I closed six seperate CDs to and lost about $1.75. I had laddered CDs, and they were all in small dollar values, currently my biggest CD is $252.60 and most are in the $50 range, because that is how much I put towards my EF every pay period.

    As I stated before, I have used INGDirect’s incredibly simple new account setup to go from a negative checking balance to no consumer debt and a one-month EF in 11 months. It works for me, but that doesn’t mean it will work for your situation.

  107. Maureen says 04 November 2008 at 12:59

    Bankrate.com has an excellent CD laddering calculator that will tell you when and how much to invest in a ladder based on your goals.

  108. LWM says 04 November 2008 at 14:30

    Re: using CDs for emergency cash. Given 12 CDs, one maturing every month, my plan (should the need arise) is to either use a CD to cover the emergency expense if the expense occurs during the grace period (my CDs have a 10 day grace period during which I can either withdraw without penalty or roll over) or use a credit card to cover the expense and use the next maturing CD to cover the full credit card payment. My goal is to have 12 CDs of $2500 each. If an emergency occured requiring more than $2500, I would assume the magnitude of that situation would dwarf any concern I would have about losing some interest by breaking into a second CD.

  109. Andrea says 04 November 2008 at 16:31

    Unlike most CDs on the market, Washington Mutual’s CDs actually do include an “Add-On” feature: once the CD has been set up, you are allowed to make additional deposits at any time during the term, up to the amount of the original sum (for example, if you open a CD with $2500, you could deposit up to $2500 more, for a total of $5000). The additional deposits earn the same interest rate as the money used to open the CD, and all the money is available to you at the end of the term, whether or not it’s been held in the CD for the full time period. This is a nice incentive to put a little extra cash aside, if you don’t think you’ll need the money too quickly. WaMu has also been known to offer great limited-time-only promotional rates which come and go without warning (currently branches, but not the website, are advertising a 3.51% APY on 9-month CDs, $1000 minimum to open); opening a CD and continuing to make deposits at the CD rate could be a good buffer strategy against sinking interest rates. (Every bank probably needs cash right now, even if they don’t offer the Add-On feature, so keep looking for good deals!)

    A word of caution: the Add-On feature might not survive Washington Mutual’s eventual takeover by Morgan Chase, but a bank employee told me this week that all terms and rates outlined in current WaMu CD agreements will hold to the deposits’ maturity.

  110. JayNCoke says 06 November 2008 at 09:33

    This is a great post, one that explains the basics of CDs, which most people are not familiar with.

    The main point to remember is that it’s not liquid for the term, but you are locked into a potentially great interest rate. It’s not entirely ideal to put your whole savings into CDs; if you have an emergency, you have to pay penalties! But if you have a good amount that is laying around and you don’t want to risk putting it into investments that could potentially lose value, then this is a good product to have knowledge of.

    Also know that it’s a deposit product that is FDIC insured at member banks. So know your FDIC insurance rules as well.

    There are other special CDs already mentioned in the comments that allow you to make additional deposits or make partial/full withdrawals with no penalty. Some of these require minimum balances or requirements, but it’s always good to know your options.

    Also as an insider tip from someone who works for a bank, it pays to rate shop sometimes. Not sure if this applies to all banks, but where I work we have rate calculators that helps us make VERY competitive offers that are not usually promoted; very short term with really good rates. Just tell your banker what you are looking for and see if they can get approval from upper management. You’ll probably need a high balance though (sometimes $10,000+). But again, it never hurts to know your all your options!

  111. Dustin Brown says 13 January 2009 at 16:39

    “My $10,000 emergency fund, for example, is currently earning 2.75%. I may instead create a series of parallel CDs, as described above.”

    Did you end up doing that, JD? I’m considering it, but I’m concerned about liquidity, given the nature and intent of an emergency fund.

  112. J.D. says 13 January 2009 at 16:42

    Dustin, I did not do the parallel CDs, but I still may sometime in the future…

  113. Chris says 03 April 2009 at 11:30

    In addition to an Add-On feature in order to attract interest in CDs some credit unions have gone to a bump feature. The ones I have seen are longer than 18 months. At some point after an initial period, usually 6 months on an 18 month CD, you are allowed to adjust your interest rate. Therefore if you invested in a CD at a very low rate of return, say 2%, and in 6 months rates are now 3.5%, you are allowed to bump up to at least a portion of that improved rate, sometimes the entire improved rate. I have not seen this on many CDs, but in low times it might be a good idea, since an investor may miss a good period of growth, but can still bump their CD if they are watching interest rates.

  114. shawn says 06 May 2009 at 07:14

    about how many have “certificate deposit” today?

  115. pat says 25 June 2009 at 13:21

    I have yet to see anyone speek about using a CD ladder for/in retirement.My plan is to begin to pull my IRA funds approx.,1 year before retirement and set up 12 each CD’s worth 25k each.These would be in three seperate banks/credit unions to assure FDIC backing, for a total of 300k.I will repeat this with my wife’s IRA the year before she retires and sell our home and add an additional 300k to put monthly in CD’S. This will bring three $25K CD’S ($75K)to maturity each month at what ever interest rate they were purchasted at.So @ 2.5% this would be $1,875.00 per month income plus two social sec checks,one pension,and a small house valued at approx.,$300k.Please let me know if you see any flaws in my plan as I am not a pro at this and I do want to have all my $$$ in safe place so that what just happened in the USA will never get me in my retirement.Looking forward to all your comments……… thanks-soooo much pat

  116. Thegooch says 18 April 2014 at 18:07

    I make .87% with Ally online saving account…why in the world would I tie up my funds in a cd? Convince me.

    • Joe says 18 April 2014 at 22:48

      I don’t know if it’s still the case. But it used to be some non-profit organizations couldn’t invest in high-risk assets. In that case, a CD was often the best option.

      For the individual… yeah, stick with the .87% savings account 😉

    • TheGooch says 20 April 2014 at 16:50

      Good point on the the No Penalty CD. A factor that I didn’t consider because I’m very disciplined is that for some people , having restrictions on how fast you can access your savings is better. If you’re always tempted to take money from savings for an impulse buy, I could see a CD being useful there.

      I use savings accounts for some of my emergency fund and for short-term savings( <5years. Everything else pretty much goes into index funds.

    • David @ Simple Money Concept says 21 April 2014 at 11:04

      I agree. However, there are people who are looking for higher yield with FDIC insurance. Mutual funds don’t really do the trick.

    • lmoot says 21 January 2015 at 03:15

      Good news, Ally is currently at .99% for savings. I also have Barclay’s dream which currently earns 1.05% in savings and for every 6 months you don’t withdraw, it bonuses an additional 2.35% (of the interest earned only, but still).

      My plan is to put my efund in a 5 year CD…even with penalties, after it’s in there for a certain period of time I can still withdraw it and earn more money than a 1 or 2 year CD. Plus as long as I am still able to physically work and am drawing income, I likely won’t need the efund right away as I have other streams of income other than my main one, to keep me afloat for some time.

      I’ve already determined that I am a low-risk investor (except probably when it comes to my desire to own rental properties), not because I’m scared, but mainly because of simplicity and because I don’t morally accept sending mass quantities of my money to conglomerates that I would not personally want to support anyway. Also, I like to see my money physically at work towards improving both mine and others’ lives while I’m here on this earth instead of being sent to money mill companies to be churned and pooped out in the form of whatever low quality crap they’re peddling to the people to make even more money (I’m a radicalist, din’tcha know!). Other than my 401k and ROTH, I don’t see myself getting heavily (if at all) into market investments. If I invest in something I want it to be because I believe in it.

      Another tangent brought to you by the moot 🙂

      • Rail says 25 January 2015 at 16:07

        Good answer Moot, good answer. 🙂 Cheers!

  117. elenagraziela says 19 April 2014 at 13:04

    Ally also offers a 11-month No Penalty CD at a fixed rate of 0.87% — no early withdrawal penalty, no minimum deposit. All deposited funds plus interest can be withdrawn without penalty after the first 6 days of CD funding. The Ally Online Savings Account rate earns the same rate (I have one), but rates can change at any time. For very short term savings purposes, the No Penalty CD looks like a great option.

  118. Art Chester says 19 April 2014 at 13:14

    Elena, I agree.

    When you need to park money for an uncertain length of time but want maximum interest, the Ally No Penalty CD can’t be beat.

    And I discovered, if you choose to leave the money in when it matures after 11 months, they increase the rate by 0.25% when they renew it — but you can still cash it at any time with no penalty.

    The only downside: it’s not like a savings account where you can pull out a little at a time – it’s all or nothing, keep it or cash it. So when I want to park money there I break it into a half dozen chunks and buy separate CDs with each one. I get a single statement so it’s no hassle for me, and if I only want part of the money, I just cash one or two of them.

  119. GRun says 19 April 2014 at 14:29

    CD interest rates in some other countries are astronomically high compared to these. In India for example, where CDs are called fixed deposits, the interest rates range from 4% to 8.75% depending on the duration and amounts. Here’s one example http://www.icicibank.com/interest-rates.html#fd Maybe, if you have a friend you trust immensely, you could give the money to them to put in a FD there and split the accrued interest. You’d still end up with better returns than here. Of course, it’s up to you to think through the legal and ethical issues of investing your money abroad instead of in good ole’ US of A.

    • Jason says 24 April 2014 at 10:49

      Not a good idea for savings. There are probably legal ways to do it, but India’s interest rates reflect their higher inflation rate. You’re also taking on currency risk. That’s too much for money you need to rely on.

  120. Peach says 19 April 2014 at 17:17

    I agree that Ally’s online savings account is a good choice. I also like their Raise Your Rate CD for money I won’t need for 2 yrs or more. Pays 1.10% for 2 yrs and 1.30% for 4 yrs, compounded daily.

  121. Don Thomas says 23 April 2014 at 16:55

    Barclay’s long term rates are a great investment if you’re looking to start up a long term college fund.

  122. Mike says 26 April 2014 at 15:28

    All these options are below the real rate of inflation you are not gaining anything saving like this. If you have long term savings find a higher yield place to put them. It may seem more risky but you are guaranteed to lose with CDs.

    • Jason says 26 April 2014 at 19:13

      For what it’s worth, the only option I’ve seen that offers a higher rate with FDIC insurance is the 3+% some credit unions and local banks offer on checking accounts if you use the debit card for $200 over 12+ transactions.

      Do you know of something else?

  123. wordpress.com says 07 May 2014 at 04:51

    Appreciate the recommendation. Will try itt out.

  124. Taikido Kali says 13 July 2014 at 19:01

    You didn’t discuss about IRA as part of retirement.
    Do you have against IRA?

  125. James says 30 December 2014 at 07:55

    So my girlfriend and I are looking to buy a house in 4-5 years. I know CDs earn less then the current rate of inflation. (Or well I could not find anything that is higher then 2.5%.) I also know with an IRA you can take out for your first home purchase the only thing is, is that once we buy the house that account as far as I know will remain open. Is there a way to withdraw all the money from an IRA once it is time to buy the house and close the account. Or at least split the account between my girlfriends and mine retirement?

    • Jason says 03 January 2015 at 12:43

      You can close an IRA just like you would close any financial account. Be careful about what you choose to invest in with your time horizon being less than five years. Anything with high exposure to stocks (index funds, most mutual funds, even bonds) can be too volatile to count on them when you need to make a down payment. You might look at preferred stock ETFs, which will give you some yield with less downside risk (these tend to be heavily invested in financial stocks, so also consider balancing it with an ex-financial preferred stock ETF, which avoids the financial sector). However, I would stick primarily to FDIC-insured holdings.

      The part about splitting an IRA between two people is more complicated. The “I” stands for “Individual,” and it’s meant to stay that way as long as you’re living. I think it would be easier if each of you open an account and split the savings going in.

      • James says 06 January 2015 at 07:40

        Thank you for the information. I was thinking of staying with FDIC for the security and the fact our house would depend on it.

  126. Gen Y Finance Guy says 21 January 2015 at 06:31

    In late December I was able to open up two CD’s (one for me and one for my wife) at a 3% interest rate for 12-months with Navy Federal Credit Union.

    Something to consider and maybe add to the list?

    Thanks for sharing.

    • LM says 21 January 2015 at 14:59

      I also bank at Navy Federal. Their CD rates beat many of the rates listed in the chart above. While the savings account rate is paying .4% for less than $10,000, you can create a Club account that pays .6% and the term is 3 months or longer – your choice.

      If you are a government contractor, military or retired military I recommend you check them out!

  127. Grace @ Investment Total says 22 January 2015 at 00:30

    If you want to make to maximize the growth of your savings, try high CD rates or else, invest it in stocks.

  128. Rail says 25 January 2015 at 17:00

    Something is wrong with a banking system that cant even keep 5 yr. CD rates at the rate of inflation. In 1980 inflation was around 13-14% and some 6 month CDs were going 17.98% and I personally know of one guy that locked in 20% on a 5 year in 1982! End the Fed. Cheers!

  129. Nick | Millionaires Giving Money says 26 January 2015 at 04:01

    Thanks for all the resources here. I have always considered taking out a CD but never got around to it. Having the information laid out like this has really helped me to make a informed decision. Thanks for the update.

  130. Debtless in Texas says 05 February 2015 at 13:33

    This really is a useful list…I have been thinking about CDs and this helps! I did not know that Navy Federal had such great rates too. See, it pays to read the comments!

  131. KT says 11 February 2015 at 06:57

    Is there a lack of writers or new content? There’s been a lot of regurged articles lately, or pure fluff with no actual tips or information…

    • JBR says 15 February 2015 at 07:23

      I guess GRS is making money on the click-throughs of this article, which is now being re-hashed on a weekly basis. It’s nothing more than an ad. Or maybe they fired all of their writers?

      • Linda Vergon says 24 February 2015 at 09:09

        Hi JBR,

        Actually, we update the rates in this article weekly and that pushes the article up to the top of the blog roll. I have asked our development team to change that so that this article (and the savings article) stays at the bottom of the blog roll at least.

        We love our writers too, but sometimes their lives take them in different directions. We’re obviously sad when that happens, but grateful for the opportunity to share their thoughts and insights for whatever period of time we can. And every so often they come back and grace our pages again when they can like Donna Freedman, Robert Brokamp, and even J.D. Roth have from time to time. And their absence also opens a spot for new writers to come in and share their experience and broaden the personal finance community.

        Thank you, too, for your readership and comment! It helped me find a solution to what was becoming a source of irritation. Thanks again!

        Best regards,
        Linda Vergon, Editor

    • Mark Battle says 15 February 2015 at 10:37

      Agreed KT on your comment, I see alot of interest rates and/or minimum(s)required, but what are end results..?? i.e…if I put in say $887.00 in a 12 month account and do not touch the money, how much interest will I have garnered along with my original deposit..?? I am not so saavy as to say what is gold and what is B.S., but it would be nice to know…
      Just saying

  132. Sonja B. says 16 February 2015 at 05:30

    There is a lot of speculation that the Fed will end easing and raise rates in June. Of course it isn’t a guarantee, but with only 4 more months, I wouldn’t put much money in a CD now. You have to lock it in for 2 years (amd/or put a lot in) to beat the rates offered by internet-based bank savings accounts.

  133. researching investing says 18 February 2015 at 14:45

    Good point Sonja.

  134. 3rd Generation says 21 February 2015 at 19:47

    This article was useless.

    Who do I bill for my time ?

    • Lemonaid says 07 March 2015 at 19:03

      Feeling a bit peevish and fretful are we?

  135. Shweta Rai @ OnlineBusiness.org says 07 August 2015 at 05:50

    I like how you have shared a Table with years vs interest rate. Great starting point for those who want to start saving & investing their money.

  136. Kenna says 04 November 2015 at 09:34

    What is the min amount to start a CD or bond

  137. Eneida Alberg says 24 March 2016 at 06:57

    I truly appreciate the written content you have on your site it actually has helped me out a great deal thanks

  138. Szymon says 07 August 2018 at 16:02

    Interest rates in USA are so much higher then in such poor countries like Poland: https://rekinfinansow.pl/najlepsza-lokata/ The article is form 2016 but now in 2018 CD rates interest doubled ! Cash is flowing to the US. I regret europeans cannot take advantage of US CDs.

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