Finance

Shopping for the Best CD Rates Online

November 6, 2011
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Comparison shopping for the best CD rates available can be easily done online these days on interest rate aggrator sites like MonitorBankRates and RatesORama but searching for the highest CD rates isn’t the only thing that you need to do. There are other investing decisions to make including the certificate of deposit term and the corresponding CD rates at banks associated with them.

If you don’t keep the monies in the certificate of deposit for the entire term what is the penalty on an early withdrawal, these are factors that you need to look carefully and decide what makes sense for you and as with most financial products and services. Also make use of a CD calculator to help you decide which certificate of deposit best fits your investement needs.

When you buy something or invest it pays to do some research and take other precautions before you buy because most savers purchase CDs through local banks, credit unions or deposit brokers but if find bank CD rates and compare CD rates at several banks and sometimes negotiate a higher interest rate by promising to bring a certain amount of deposits.

As with any institution when shopping around for the top CD rates, ask the bank or credit union what are the CD interest rates and what if you need the money back earlier, you can arrange that but expect to pay an early withdrawal CD penalty therefore you need to understand the CD rate and the terms offered on the certificate of deposit account. These accounts come in many varieties, so shop around to find not only the highest CD rate but the CD that has the best terms as well.

You must consider how long you are willing to leave your money in a CD but also ask what would happen if you needed money back sooner than expected because that is possible in today’s economy and it turns out that the bank is paying only  1 percent  not 3 percent but the CD sales person for the bank offers to add enough money to the CD purchase to make up the difference and if market rates have increased.

Sometimes you’ll find it is not to your benefit to renew at the old CD rate because first of all, it could be a product issued by a bank that is not federally insured and any money invested is at risk you don’t want to invest in a CD that isn’t guaranteed by the FDIC. Too see if a bank’s deposits are FDIC insured you can use the bank find tool on the FDIC’s website. When you invest in a CD the bank agrees to pay you a higher CD rate than you would receive from checking account rates or savings account rates and  the CD automatically renew at maturity if I don’t withdraw the money before hand.

Are there options for early access without a penalty, some CD account have this feature but beware of an advertised CD rate far above what other CD rates at banks are going for because the bank could be in trouble and looking to raise deposits, think Washington Mutual. A broker-sold CD can be more complex and may carry more risks than purchasing a regular CD directly from a bank or credit union because when the CD does matures.

When you invest in a traditional FDIC-insured CD, you agree to keep the money in an account for a set term — a few weeks to several years which is unlike a savings account where there is no time limit on your investment.

You’ll also find one variation, a bank or credit union may advertise in the local newspaper a 4 percent interest rate for a six-month bank CD for consumers with $10,000 to invest and higher CD rates on jumbo accounts, these higher accounts have jumbo CD rates so it pays to ask about any features that may allow you to earn a better CD rate if market rates go up in the future which will be happening.

Also remember that a CD with more flexible terms than a traditional, fixed-rate CD may be offered at a lower CD rate and possibly only have a higher promotional CD rate for a short period of time. Banks and credit unions have added innovative CD accounts to give depositors new flexibility with their CD account and savings account investing.

You earn a lower interest rate on a CD account or savings account but your money is safe unlike many investments in the stock market or real estate declining in value CDs and savings account remain some of the safest investments you can make at anytime. Banks are now you may be able to add money to the CD, switch to a higher interest rate or withdraw money early without a penalty, aka no penalty CD account.

Before buying a CD from a broker, bank or credit union please read and understand the fine print, and make sure you are dealing with a reputable financial institution if you are purchasing a CD, verify that it is issued by a federally insured depository institution because the traditional CD is only one of the choices you can make and invest in. If CD interest rates go up in the future you don’t want to be locked into a lower paying interest rate.

Where to Place your Monies Since Deposit Rates are Low

October 13, 2011
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Interest rates on loans and deposit products are very, very low today. Current mortgage rates on 30 year mortgage loans are 4.00%. Current CD rates on 1 year certificates of deposit are at 1.25% and the best savings account rates are also around 1.25% these days. I remember when 1 year bank CD rates were paying 4.00% three years ago.

The alternative is to invest in the stock market which was almost in bear market territory, down 20%, but a miracle happened and the markets rallied 10% in 7 days, makes you wonder if the market is rigged. With a certificate of deposit investment you agree to keep the money in the CD account for a set term which can range from a day to many years.

When looking for a low-risk investment for their hard-earned cash, many Americans turn to certificates of deposit (CDs).If you redeem your CD before it matures, you may have to pay an “early withdrawal” penalty or forfeit a portion of the interest you earned.Only the issuing bank may call a CD, not the investor.

Investors may now choose among variable rate CDs, long-term CDs, and CDs with other special features.While all CDs feature federal deposit insurance, some CDs are more complex and may carry more risk, especially with respect to getting money back early or locking in an attractive interest rate.The ABCs of CDs

he financial institution pays you a better CD interest rate than you would receive from a checking account or most savings accounts.In combination with recent market volatility, advertisements for CDs with attractive yields have generated considerable interest in CDs.When you invest in a traditional CD you place your money into a timed account with a financial institution like a bank or credit union.

Both CD rates and savings rates aren’t paying that much but at least you won’t lose any of your principal investment as long as you stay under the FDIC insured amount.The deposit broker can then offer these “brokered CDs” to their customers.

There are many different types of CD accounts with many different CD terms, shopping around for the best fit for you will maximize your returns.Some long-term, high-yield CDs have “call” features, meaning that the issuing bank may choose to terminate – or call – the CD after only one year or some other fixed period of time.

When you cash in or redeem your CD, you receive the money you originally invested plus any accrued interest.Although most individuals purchase CDs directly from banks, many brokerage firms and independent salespeople also offer CDs.Although you agree to have the money in the account for a fixed period of time you can have access to your money before the term ends but you will pay a penalty for this privilege.

But if you’ve invested in a long-term CD and interest rates subsequently rise, you’ll be locked in at the lower rate.At one time, most CDs paid a fixed interest rate until they reached maturity.CDs feature federal deposit insurance.

When you purchase a CD, you invest a fixed sum of money for fixed period of time – six months, one year, five years, or more – and, in exchange, the issuing bank pays you interest, typically at regular intervals.These individuals and entities – known as “deposit brokers” – can sometimes negotiate a higher rate of interest for a CD by promising to bring a certain amount of deposits to the institution.

CD Rates from Ally Bank: Raise Your Rate CD Rate of 1.97%

July 22, 2011
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Ally Bank is just come out with a new certificate of deposit product that has one of the highest CD rates right now. Ally Bank has been offering a 2  Raise Your Rate CD which is very popular is now offering a 4 year Raise Your Rate CD.

This this certificate of deposit you get to raise the CD rate twice during the four year term if bank CD rates head higher at Ally Bank. The current 48 month Raise Your Rate CD Rate is 1.97% with a CD yield of 1.99%.

The 24 month Raise Your Rate CD Rate is at 1.38% with Raise Your Rate CD Yield of 1.39%. You can also sign up for email alerts and be alerted when Ally Bank Raises CD rates. This is a great feature, you don’t have to constantly monitor rate increases by just signing up for email alerts.

Raise Your Rate Certificate of Deposit Features

Open with $0
No monthly fees
One interest rate increase with the 2 year term
Two interest rate increases with the 4 year term
Daily compound interest
FDIC insured to the maximum allowed by law. 

Ally Bank is also offering competitive CD rates at banks.

3 months CD Rate 0.44% Yield 0.44%
6 months 0.99% Yield 0.99%
9 months 0.99% Yield 0.99%
12 months 1.18% Yield 1.19%
18 months 1.24% Yield 1.25%
3 years 1.73% Yield 1.75%
5 years 2.30% Yield 2.33%

Ally Bank makes opening a certificate of deposit account easy. The bank’s website allows you to open an account online in less than 9 minutes. You can open a CD account here: Ally Bank CD Application. 

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