How to Find the Best Certificate of Deposit Rates
- 1). Determine the amount and length of your investment
In general, the more money you invest in a certificate of deposit, and the longer you lock it in, the higher rate you'll receive. For instance, a CD with a 5 year term will earn nearly 5 times the interest rate of a 3-month CD. Consider carefully, however, whether or not you're comfortable with tying up your funds for an extended period of time - if you end up needing to withdraw early, you'll likely pay a substantial penalty. - 2). Visit your local banks
In the past, local banks and credit unions had a tough time competing against online banks. In the current economic climate, however, the interest rates offered by traditional "brick and mortar" institutions have really crept up. Start by visiting your own bank and inquire about CD rate specials for existing customers - many banks will offer you a small fraction above what they offer to the general public. For other local options, look through the financial section in your local newspaper (typically Saturday or Sunday in most parts of the country). Local banks will often advertise time-sensitive rate specials for new customers. - 3). Research online banks
Although online banking has dropped off somewhat, there are still plenty of opportunities to secure a decent interest rate. Search "CD rates" or "certificate of deposit" and you'll get millions upon millions of links. Look for current articles and start compiling a list of possible banks. When you've found a few that seem promising, go to their individual websites to review the latest rate information. Before committing, however, be sure to check out their financial health - see the link in the Resource section below for bank safety ratings. - 4). Check with professional associations
Some professional associations and other organizations offer their members a small interest rate increase for CDs purchased through them. Generally these increases are small - on the order of a fraction of a percent - but every little bit can really add up over time. If you belong to any groups through your profession or your community, inquire as to whether they offer this benefit.
Source...