Version of Original Post Below
The Online CD rates (certificate of deposit) on this page are updated as of dates noted below.
Certificates of deposit (often simply called CDs) are time deposits. You give your money to a 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, the higher the interest rate you'll receive. And historically, the best CD rates generally pay more interest than you can earn in a high yield savings account.
As we've seen recently, the rate of personal savings are increasing. But also recently, the active commenters on my high interest savings account page have become discouraged. Interest rates continue to drop, and they feel like they're not getting good value for their money. “I'm now considering just getting a CD because I'm so sick of all this nonsense with the daily savings account rates!” DreaDrea wrote.
Current CD rates have also fallen, but remain high in some corners. For those hoping to eke the best return from their cash reserves, online CDs could be a great choice. To make the savings die-hards happy, I did some research on current CD rates from popular online banks. Here's what I found.
I didn't know much about CDs until I won a $1,000 certificate of deposit, but its six month term is due to expire. It's time for me to decide where I should put that money next.
Barclays is a large international bank, with some very appealing rates:
I don't know much about EverBank. I do know that their rates are competitive. **For first time account holders, Everbank's Yield Pledge Money Market account offers a new account bonus rate of 1.10% for the first six months, a first year APY currently at 0.86% for account balances up to $50K and an ongoing APY of 0.61% APY. Rates as of April 15, 2014
Rates for Capital One Bank collected within: 10025 (NY)
HSBC rates posted below are for their online accounts. ** HSBC Advance Online Savings Account APY for balances between $.01 – $9,999.99.
I found CDs through a few other online banks, but either their yields were much lower, or I couldn't access a full list of CD rates. (Some banks just put a teaser out front, and you have to sign up to see the full list of rates.)
One question I have — and maybe I'm missing something here — is why would anybody open a CD at HSBC Direct, for example, when their high-interest savings account yields more? And though savings rates might drop a little lower, they're likely to increase long-term, right? So, why would I want to lock myself into a low CD rate when I expect savings accounts to go up by the end of the year?
Can anyone explain this to me?
As I say, I'm new to online certificates of deposit. Are there things I'm not considering? Should I be looking for factors other than the best CD rates? (I'm tempted to just remain with ING Direct — or to move money over to my credit union.) Have you held certificates of deposit at any of these banks? Are there other banks that should be considered?
Have you been able to find CD rates that are even better than the ones listed here? If so, please let us know. Don't forget to include all the details: name of the bank, state, rate, when you opened this account with this rate and whether one can you open an account online or have to come in person. I'd like to find the best CD rates to share with Get Rich Slowly readers.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.