The Best Online CD Savings Accounts
Opening a certificate of deposit account is a good way to invest money for the short term with a guaranteed rate of return and minimal risk. There are a number of banks that offer the ability to open CD accounts online, at rates of return that might be significantly higher than the national average. The following banks offer online CD accounts at competitive rates, along with other distinct advantages.
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Discover Bank
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Discover Bank currently offers certificates of deposit with terms from three months to ten years. For a 12-month CD with a minimum deposit of $2,500, the interest rate is 1.84 percent and the annual percentage yield (APY) is 1.85 percent. Further deposits may not be made until the maturity date. Interest compounds daily and is credited monthly and must remain in the account to qualify for the stated APY. Interest earned may remain in the CD account or may be transferred to a Discover Bank money market account or an account at another institution. All deposits are FDIC insured.
Ally Bank
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Ally Bank offers a 1.82 percent interest rate with a 1.84 percent APY for a 12-month CD and in addition, there is no minimum investment. Interest compounds daily and there are no fees unless withdrawals are made prior to maturity and renewal of the CD term is automatic. Ally also offers a "Ten Day Best Rate Guarantee" which ensures that within ten days of opening your account, you are guaranteed the best rate offered during that time period. They also offer a nine-month CD term, which carries a lower APY of 1.24 percent but does not penalize account holders for withdrawals made prior to maturity. All deposits are FDIC insured.
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MetLife Bank
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MetLife Bank offers a competitive rate for a 12-month CD at 1.64 percent interest and 1.65 percent APY, with a minimum initial investment of $25,000. The rate drops to 1.25 percent APY for a 12-month CD with a smaller minimum investment of $2,000. Terms range from three months to five years and the rates are guaranteed, meaning they will not fluctuate with the market. All deposits are FDIC insured.
American Express Bank
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For a 12-month CD, American Express Bank offers a 1.49 percent interest rate and 1.50 percent APY. There are no monthly fees associated with their CD accounts and no minimum initial investment required. Renewal does not occur automatically and depending on the terms of the account agreement, there may be some fees associated with early withdrawals. All deposits are FDIC insured.
ING Direct
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ING Direct offers a 12-month CD term with an interest rate of 1.73 percent and an APY of 1.75 percent. Terms last from six months to five years and there is no minimum deposit required. Interest is compounded daily and credited monthly and may be withdrawn any time prior to maturity without penalty. There is a fee for withdrawing the initial deposit prior to withdrawal. ING also offers a CD ladder wherein account holders can open multiple CDs for varying terms. Doing so allows the account holder to maximize the earnings on their investment through longer terms while still earning interest on funds that will be available in a shorter time frame. All deposits are FDIC insured.
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