How to Get 12 Month CD Rates

If you're looking for an investment with a higher rate of return than a savings account, considering investing in Certificates of Deposit (CDs). CDs offer low-risk options for increasing money. Wise investors do their homework before choosing a CD in order to find the best rate. Get 12-month CD rates and maximize your money in accounts that generate the highest interest.

Difficulty: Moderately Easy

Instructions

1. Understand CD terms such as Annual Percentage Yield (APY) which refers to total interest received by the fund based on a compounding process over 365 days. Regulations require APY disclosure for interest-bearing deposit accounts.

2. Learn the difference between fixed and variable rates. Fixed rate CDs lock in rates for the CD term. Variable rate CDs can change rates during the term.

3. Inquire about the minimum deposit needed to open a CD account that earns interest. Deposit requirements vary by institutions.

4. Find out the type of compounding method used to calculate your interest. For example, ask if compounding occurs semi-annually, yearly or quarterly. In addition, ask about any penalties for early withdrawals.

5. Search for CDs housed at institutions that submit to a rating system, a method that evaluates the organization's financial condition. For instance, some establishments use between one and five stars to rank banking institutions from superior to low.

Tips & Warnings

• Open a CD at a credit union, a nonprofit organization that often offers better rates than other banking institutions. Credit unions tend to give members more personalized service than commercial banking establishments.