Are you looking to open a savings account with a good yield? Perhaps the best place to start is with an online bank. They are better able to offer the best certificate of deposit rates since they operate primarily online and do not have physical branches to fund. CDs are often considered the “next level” after a savings account. However, you will be required to keep your funds locked for a certain period of time. Depending on the bank, there may or may not be a penalty for an early withdrawal.
Some banks offer a few different types of CD accounts, including forward CDs, where the interest rate is locked in without having to worry about the drama of market volatility, as well as a “penalty-free” CD, which allows you to maintain access to your funds while still having the security of a certificate of deposit. Some other types of CDs are designed to balance your investments and help maximize your return.
With a traditional CD, you may not be able to make additional deposits. If you want to add money later, the bank should give you the option to upgrade an existing account.
Best Certificate of Deposit Rates at 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 is ideal to choose a bank that automatically renews 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 the term of your certificate of deposit before opening an account. How long can you afford to keep that money locked up in the account? If you think you are going to need it in less than a year, look for a bank that offers you a term of six or twelve months and that does not charge you a penalty for withdrawing it. On the other hand, if you’re interested in saving for the long term, such as for retirement or your child’s college tuition, choose a bank that continues to increase the APY % as the account matures.
Confirm that the CD will be secured. Avoid any bank that is not backed by the FDIC. Also, do a background check on a bank to make sure they haven’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.”