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Best Certificate of Deposit Rates: A Guide to the Different Types of CD Accounts and APY

Are you looking to start a savings account with a good yield? Perhaps the best place to get started is with an online bank. They are better able to offer the best certificate of deposit rates since they operate primarily online and don't have physical branches to finance. CDs are often considered to be the "next level" up after a savings account. However, you will be required to keep your funds locked up for a set period of time. Depending on the bank, there might or might not be a penalty for an early-withdrawal.

Some banks offer a few different types of CD accounts, including Term CDs, in which the interest rate is locked without having to worry about the drama of market volatility, as well as a "no-penalty" CD, which allows you to still maintain access to your funds while still having the security of a certificate of a deposit. Some other CD types are designed to balance your investments and help maximum your return.

With a traditional CD, you might not be able to make additional deposits. If you want to add money later on down the road, the bank should provide the option to upgrade an existing account.

Best Certificate of Deposit Rates in Online Banks

The good thing about online banks is that they really do offer the best certificate of deposit rates, which can exceed 2.0% APY. It's ideal to choose a bank that automatically renews the accounts at maturity. The more mature the account becomes, the higher the APY percentage. Ideally, there should be no fees for opening an account.

Consider your certificate of deposit term before starting an account. How long will you be able to afford to keep that money locked into the account? If you think you might need it in less than a year, look for a bank that offers a six or twelve month term, and won't charge you a penalty for taking it out. On the other hand, if you are interested in saving for the long-term, such as for retirement or your child's college tuition, then choose a bank that will keep increasing the APY % the longer the account matures.

Confirm that the CD will be insured. Avoid any bank that isn't backed by the FDIC. Also, check a bank's background to make sure that hasn't experienced any financial problems in the past.

You'll find a variety of CD account types to choose from, as well as the best certificate of deposit rates at CIT Bank. It is FDIC-insured and is in the "Top 50 US Banks".

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