What is a good CD interest rate?
While recent Increase in interest rates For prospective homebuyers, as well as homeowners looking to refinance, the news wasn’t all bad. Due to feed activity, the benefits of High yield savings And Certificate of Deposit (CD) Accounts have grown exponentially.
Both account types come with unique benefits and advantages, many of which are especially appealing in today’s economic climate. Many account holders are looking for any edge they can get and considering that the average savings account interest rate hovers around 0.33%, they can help by keeping their money untouched. Not getting what they need.
Luckily, A certificate of deposit account Assuming you have a favorable interest rate, you can help protect and grow your money. To get the most value from these types of accounts, it helps to first understand what a good CD interest rate is.
You can easily check today’s CD interest rate to see if it makes sense for you. Or use the table below to explore some local options.
What is a good CD interest rate?
As with interest rates on savings and high-yield savings accounts, the higher the interest rate, the better. To determine what a “good” rate is, simply compare what CDs are currently offering to what you can get from a regular savings account.
Savings accounts currently hover around 0.33% while interest rates on CDs are around 3.5% to 4.5% or higher depending on the lender and other factors. This makes now the best time to open a certificate of deposit account.. Simply put: If you’re not putting some money into a CD or some other type of high-interest account, you’re leaving money on the table.
Just be sure to shop around before signing on the dotted line. By researching all viable options you will improve your chances of getting the highest rate out there. But be sure to look at the fine print. Some banks may charge you fees or penalties that can potentially eat into your interest rate. It can be the difference between a lender that offers a higher rate and one that offers a lower rate with no fees.
Explore your CD options online now to see how much more you’re earning..
To know the benefits of CD
Higher interest rates aren’t the only benefit certificates of deposit offer. Here are two other big benefits that people considering CDs should know:
- Locks in your rate: You may get more interest with a high-yield savings account or another savings vehicle, but this will probably only be temporary. This is because high-yield savings account interest rates are not locked in and will move up or down based on market and Fed activity. A CD doesn’t work like that – the interest rate you save when you open the account is the same one that is honored throughout the term of the CD. So don’t worry about market movements, with CDs your money will earn interest no matter what happens in the market.
- Protects your money: A CD will not only protect you from an unfavorable rate environment, but also protect your principle by locking in your money for the entire term. Account holders will not be able to access this money unless they are willing to pay a penalty to get it. So, if you’re having trouble saving money, a CD might be worth it. The amount you deposit will be the amount you withdraw at the end of the term (plus whatever interest you have charged).
Explore your CD options now to get started.!
The bottom line
Those looking to both protect and grow their money should strongly consider opening a CD. These types of accounts currently offer significantly higher interest rates than traditional savings accounts. But the benefits don’t end there. They are also reliable because the interest rate you get when you sign up will be the interest rate paid throughout the life of the CD. And since you won’t be able to access it without penalty, you can rest assured knowing that your money is safe (and growing) without interruption.
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