A CD account offers some of the best rates in online banking accounts. The best cd account is not always the one with the best cd account rate. It can be difficult sorting through all the cd accounts out there, including the cd accounts online and those cd accounts offered locally. If you know what to look for in a cd account, you will quickly find what the cd account that is right for you.
Here are ten tips to consider when looking for the best CD:
- Look at the cd account rate.
- Examine the length of the cd account.
- Check out local banks cd accounts and compare them with those cd accounts online.
- Understand the cd account fees.
- Compare cd accounts to find a cd account thats best for you.
- Explore an online cd account and the benefits they provide.
- Commit to a plan for investing in cd accounts.
- Read reviews on the cd account or bank.
- Try a cd account calculator to calculate your cd account yields.
- Choose the best cd account.
Looking at the cd rate for your cd should be a no-brainer. But sometimes the cd rate listed is an APR (annual percentage yield) and other times the cd rate is listed as APY (annual percentage yield). So, which cd rate do you pay attention to? Both APY and APR. Some banks will only list the APY rate for their cd accounts because it is higher than the APR. The difference of these two rates is that APY is the compounded amount your cd account will yield in one years time at the APR rate. The reason apy rate is higher than apr rate is because apr calculates just the rate at which your cd account will accrue interest and not the compounded effect on the account. In order to find the best cd account, you need to compare the same cd rates, meaning, apy to apy and apr to apr. The Cd account rate you want, may take some searching since cd rates are everywhere, and because the majority of banks offer a CD. However, finding the best cd rates can be tricky and there are several things you need to know.
Rest assured that when you find that high interest cd account rate, if you lock in your money, you will have that rate for the length of the cd account. Cd accounts are famous for having fixed rate. Fixed rates on accounts provide you with assurance that even if other accounts fluctuate their rates, your cd account will stay at the same rate. Accounts other than a cd account have a flexible interest rate, which means that if the market rate drops, the account rate drops, if the market rate goes up, the account rate goes up. The fixed rate cd account is a good thing if the market rate drops, because your cd account rate will stay high, however, if the market rate goes up, your account rate will stay low, and to change to a new cd account before your cd account has matured will cause a withdrawal fee for your cd account to occur.
Cd account lengths or cd account terms vary from a short-term cd account such as a 30 day cd account to a long-term cd account such as a 10 year cd account. The incentive to invest your money into a long term cd account is that the interest rate on the cd account is much higher than a shorter term cd account. The incentive for investing in a short term cd account is that you run a lower risk of being penalized. The smartest thing to do is read the fine print on your account. Take a look at the break down of monthly and yearly cd accounts.
It might surprise you that the local banks in your community often not offer the best cd account rates. It is always a good idea to check local banks cd accounts and what their rates are. Online banks, that specialize in cd accounts and savings, are usually the banks who offer the best cd rates. Once again, even if you find a cd account with a high interest rate, look at the cd fees and fine print to make sure that if you need to withdraw from your cd early, that you will not lose all your interest.
Cd account fees can rob you of the high rate that you might of found. Beware of the account that charges a percentage penalty on the earned interest for withdrawing before the cd account matures. Usually a cd with a penalty of just a few months of interest is the best cd account to use. Another fee that is common in CD account fees is the fee for paper statements. If you opt for e-statements with your cd account, you can usually save yourself from these fees. Once again, if you can find a high yield cd account with low withdrawal fees, it is very likely that you are looking at the best cd account available.
As you compare cd accounts with the information you collect, you can begin to see which accounts are really better. Get rid of accounts that have high fees and so-so rates. Comparing CDs is crucial, because it helps you be able to make an educated decision, which not only helps you make money, but saves you money on fees that other banks might charge. Read these tips to help you compare CD Accounts
Recently, the online cd account has become one of the most frequently used accounts for saving your money. Online savings accounts provide convenience of being able to set up and check your account balance from the comfort of your home. However, since it is unlikely that you will be transferring money from your cd account, an online account does not really provide much more than a local banks cd. It is important to note that with many long-term and jumbo cd accounts you can choose to have the interest that you earned for the month or year transferred to an external account of your choice.
We strongly recommend investing in a CD because of the great return on your money, at really no risk. If you understand the rules of your cd and the penalties for early withdrawal, then you really are getting a return for zero risk. Almost all cd accounts are insured by the FDIC. You can have confidence when investing into a CD listed on our site because they are all backed by the FDIC. Many parents invest their money for their children’s education into a CD and use that as a college fund. With how busy life can get, you might look at several accounts but never invest your money into a CD. Make a goal of how much money you want to invest in a cd account and when you want to invest it.
Reading reviews on a cd account will help you know what others experiences have been with that bank and with that account. This is a good way to get information that usually isn’t shared by the bank or account provider. Some reviews of cd accounts will let you know what the customer service has been like and if there were any fees that were hidden. Try to filter through the overly critical cd reviews or really positive cd positive reviews because in some cases, the people simply didn’t apply themselves or they are biased reviews from the bank itself.
The use of a cd account calculator will aid you in deciding how much money you can put into a cd. It is very fun and rewarding to see your money work with the interest rate in yielding a small fortune. Using an account calculator will help you to stay focused and committed to keeping your money in the account and also investing into another cd when you have funds again.
The best cd account is the type of cd that has minimal fees, small withdrawal penalties, and high yield interest rates. You may find a cd account with a really high interest rate, however, if the penalty or fees are also high, they balance each-other out until the cd account does not provide a high interest yield. Finding a cd account with a better than average rate, with lower than average fees, might end up yielding a higher return than the cd account with the best cd rate. Remember to shop around, read cd reviews, and compare cd accounts and you will be able to find the best cd account.
The CD account compared with other accounts is a superior account because it consistently offers the highest fixed interest rate. We are committed to giving you the best information to help you make smarter savings decisions!