How to Find the Best Certificate of Deposit Rates
Interest rates for certificates of deposit fluctuate constantly, and they have dropped significantly since the mid 2000s, but these financial instruments are still a good investment. As long as your financial institution is FDIC or NCUA insured and your investment is within the insurance limits, your principal is safe. And with just a little bit of research, you can generally find interest rates that will provide a nice return for little or no risk to your initial investment.
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Instructions
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Determine the amount and length of your investment. In general, the more money you invest in a certificate of deposit and the longer the term, the higher the rate you'll receive. Consider carefully, however, whether you're comfortable with tying up your funds for an extended period of time; if you need to withdraw early, you'll likely pay a substantial penalty.
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Visit your local banks. Inquire about CD rate specials for existing customers -- some banks will offer you a small fraction above what they offer to the general public. For other local options, look through the financial section in your local newspaper; banks often advertise time-sensitive rate specials for new customers.
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Research online banks. Search "CD rates" or "certificate of deposit rates" for links to financial institutions as well as indicators of national yields. Look for current articles and start compiling a list of possible banks. When you've found a few that seem promising, go to their individual websites to review the latest rate information.
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Check with professional associations. Some organizations offer their members a small interest rate increase for CDs purchased through them. Generally these increases are small -- on the order of a fraction of a percent -- but every little bit can really add up over time. If you belong to any groups through your profession or your community, inquire as to whether they offer this benefit.
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Tips & Warnings
Credit counselors and financial advisers can often steer you toward the best rates, usually at no cost to you.
Before committing to a bank or other financial institution, be sure to check out its financial health with a resource such as Weiss Ratings.
While high interest rates are great, there are other factors to consider when choosing a CD. To learn the ins and outs, see the link in the Resource section.
References
Resources
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