How to Find the Best CD Rates in Today's Market

There are many CD's out there, but how do you fine the best CD interest rates? It is simple if you follow these steps on How to Find the Best CD Rates.

Difficulty: Moderately Easy

Instructions

1. Decide what length of time you will be able to tie up your money. CD rates generally go up the longer you commit your money.
   
   For example, a one-year rate usually is significantly lower than a five-year rate.
   
   Keep in mind that most financial institutions charge a fee for early withdrawal, sometimes up to six months worth of interest. This can seriously affect your rate of return.

2. Next, contact several local big name banks such as Wells Fargo, Bank of America, Capitol One, or Hibernia. This will give you a benchmark to compare all other rates to.

3. Now do a web search on "Best CD interest rates". You'll see quite a few come up. Stick to the ones on the first couple of pages and see what they have to offer.
   
   Most of them compare rates from banks across the country to find you the best CD interest rates.

4. Before buying, try your small local banks as well. They are not big enough to register on the web search sites, but sometimes they will give you a better rate than the larger banks.
   
   Also, smaller banks sometimes run promotional rates for short-term CDs that can be much better than anything else you'll find out there.

5. If you find a CD you like, be sure to check and MAKE SURE that the deposit is insured by the FDIC. With the state of the economy at the moment, it's foolish to purchase a CD that isn't fully insured.

Tips & Warnings

• Don't buy a CD from any institution if it is not 100% guaranteed by the FDIC.
• Don't use any money that you're likely to need in the near future. The penalty for withdrawl can be significant.

[hollie1974]

on 9/30/2009 Most excellent info!

[survivoryea]

on 9/30/2009 Some very good points here for purchasing CD's - thanks