Where can I get the best CD rates?
The best CD rates tend to be at online banks and credit unions. Many banks dropped their rates on CDs in the past year in response to the Federal Reserve’s emergency rate cuts in March 2020. But you can still find yields higher than the national averages of 0.14% for one-year terms and 0.24% for five-year terms.
Are there going to be any rate cuts on CDs?
Two emergency Fed rate cuts in March 2020, and decreasing Treasurys last year, caused high-yield CDs to decrease. If you’re concerned about rates potentially decreasing or want to lock in a fixed yield, a CD may be right for you.
What’s the minimum rate to open a CD?
CD terms start at three months and extend to 10 years, though there tend to be better rates on terms from one to five years. The minimum to open is $2,500, which is somewhat high.
Are there variable rates on a CD account?
If you’re concerned about rates potentially decreasing or want to lock in a fixed yield, a CD may be right for you. Savings accounts and money market accounts generally have variable rates, meaning your yield can decrease. Introductory rates on those accounts are an exception to this rule.
How is the interest rate on a CD Calculated?
CD rates are quoted as an annual percentage yield, or APY, which is how much the account earns in one year including compound interest. Banks generally compound interest monthly or daily. A CD’s term plays a role too: the longer the term, the higher the rate generally.
What’s the maturity date on a CD account?
A CD, or certificate of deposit, is a bank account with a fixed interest rate that’s generally higher than that of a regular savings account, and a fixed date of withdrawal, known as the maturity date. Common terms range from three months to five years.