How to Lock in The Best Cd Rates

Lock up those rates when you can

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By 02SmithA
eHow Community Member

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(18 Ratings)

A Certificate of Deposit, or a CD, is a great way to invest your money in a FDIC insured account. CD's offer safety as well as decent rates, most of the time. Here are some tips to locking in the best cd rates possible.

Difficulty: Moderate

Instructions

Things You'll Need:

Search around for best rates
Money to invest
Bank account

Step 1

Pay attention to the news and the state of the economy. You need to be an informed investor if you want to lock in the best cd rates. In times when the Federal Reserve is set to lower interest rates the cd rates will also go down. Lock in your rates before this happens or your rate of return will be significantly minimized.
Step 2

Shop around for the best rate. I have seen firsthand that many banks in the same area have very different cd rates. One bank might have a great high yielding cd while the one next door has terrible rates.
Step 3

Choose wisely when deciding how long you want to lock up your investment. If you might need the money keep it in a short term cd, but if you know that you won't need it and only want the best available rate then go for a longer term high yielding cd.
Step 4

Never let your cd investments just rollover. Always look for special rates that the bank is offering. Many banks will notify you when your cd is coming due, but some do not. If you allow your cd to expire and rollover, the chances are very high they will roll it over into a very low yielding account. Stay on top of your investments.
Step 5

Look for specials in odd amounts of months. By this I mean many times the bank offers specials for 7 months or 13 months rather than 6 or 12. Why is this? This is because most people just pick six months or one year and don't compare the rates, then the bank makes more off of you. Choose your investments wisely and use the best bank cd rates available to you.