If you have some extra money you can afford to set aside and some time to burn, then a high-yield CD at an online bank might be the best option. With a Certificate of Deposit, you can really get a decent return by keeping your money in the account for a certain amount of time. Different banks have different account options and usually don’t require much to start an account with. What you need to do is look for the best high yield CD account you can find online.
Now, the “best” CD account isn’t necessarily the one with the highest rate. There should be other factors to consider, such as the most interest you can get over a period of time that you will be comfortable with. You don’t want to be charged a huge penalty for taking the money out too soon. Online banks usually do allow you to transfer a bit of money here and there with other accounts, but you won’t be able to touch the initial deposit amount – or principal.
Terms vary, and banks usually offer various options, ranging from 6-months to 5-years. The longer the term period during which you agree to leave your money, the higher the term rate you’ll be able to lock in. With an online bank, this could be as high as 1.85%. Make sure that the bank GUARANTEES that you will receive this rate, no matter what – even if the financial markets change drastically in the future.
Best High Yield CD With No Fees
Of course, the best high yield CD will also be one that is with a bank that charges no maintenance or account opening fees. Other things to look for include FDIC-insured accounts, daily compounding interest, and excellent customer service. What happens at “maturity”? When your CD account matures and the term period has come to an end, you’ll usually have the option to roll it over for the same term, a different term, or cashing it out. Some banks offer even better rates if you continue rolling it over for the same term period.
CDs are really great savings options for many people, as the yield is usually higher than that of a traditional savings account. However, they’re not for everybody, so don’t put any money in that you would need access to in the event of a sudden emergency.
Where can you get the best high yield CD? One good place to start your research is with CIT Bank. This online bank has a lot of good savings and CD options, including Term CDs and even No-Penalty / 11-Month CDs. Plus, there are no hidden fees to worry about and the customer service is good.