CD Rates – Safe, Secure and Higher Than Savings Accounts
Unlike savings accounts that let you withdraw your money whenever you want, certificates of deposit (CDs) lock up your money for a set period of time. This can be a good choice for those who want to save up for something large, such as a home or a car.
The key to finding a good CD is to compare interest rates offered by banks and credit unions. Banks and credit unions often use an index to set their rates, typically the federal funds rate. As the fed funds rate rises, most banks increase their rates on CDs and other interest-bearing accounts.
Credit unions have a strong reputation for higher savings rates than many banks and online lenders. They also offer a variety of share certificates that compete with banks’ rates and often have lower minimum deposit requirements than their peers.
CDs are insured by the FDIC at banks up to $250,000 per depositor, per bank, for each account ownership category. They are also insured by the NCUA at credit unions up to the same amount, in case of a bank failure.
Insurance limits vary by state, so be sure to check.
If you’re looking to diversify your savings and make more money, consider opening a certificate of deposit at a Credit Union CD Rates. These financial institutions are largely nonprofit, with members owning the institution and a commitment to local communities that is higher than many of their rivals.
Besides offering higher savings rates, credit unions are generally more helpful than banks when it comes to managing your accounts and answering your questions. Moreover, some credit unions have no membership requirements and allow anyone to join, regardless of where they live or work.
A CD is a good place to invest for long-term goals and objectives, because it offers a guaranteed rate of return. However, CDs can also carry a penalty if you withdraw your money before the end of the term.
Some banks and credit unions charge early withdrawal penalties, which can eat into your earnings. These fees can vary depending on how long you have had the CD.
The longer you keep your money in a CD, the higher your rate is likely to be. For this reason, CD laddering strategies can be an effective way to earn more money over the long term.
In addition, if you have an older CD that is coming to maturity, it’s worth breaking the CD and opening a new one at a higher-rate institution before the term ends. This can help you offset an EWP and generate more interest earnings on your old CD.
Credit Unions – High Rates and Easy Membership Requirements
Credit unions often offer more competitive rates than many banks and online lenders, because they are a not-for-profit organization and their members own the institution. They also offer a number of other benefits, such as free checking, no ATM fees and no monthly maintenance fee.