5 Financial Tips for Getting the Highest CD Rates

May 7th 2016

Many CD investors also like to "ladder" their CDs, opening new ones at regular intervals so that they always have CDs about to reach full term and pay off. This strategy allows you to keep reinvesting at the highest current rates. Do your research and shop around, and you can find CD rates and terms worth your money.

Check Online Banks and Credit Unions

Rather than heading straight for your local bank, check the rates and terms that online banks offer. These banks operate nationwide and typically offer higher rates than brick-and-mortar banks do. Credit unions also frequently offer a slight rate bump compared to your local bank, so check with your own credit union or see what organizations might make you eligible to join one.

Compare Rates Online and Locally

Online services can provide you with up-to-date comparisons of CD rates, letting you place CD rates from multiple banking institutions side by side so that you can understand the differences between them. Don't neglect your local banks, but check around to see who might be offering special deals.

Look for Nontraditional CDs

With a traditional CD, you deposit a certain amount of money for a set amount of time and receive a predetermined rate of interest. A nontraditional CD, however, plays around with some of these elements. If you're concerned about locking your money up for too long, consider a liquid CD that lets you withdraw money without paying a penalty. Another alternative is a bump-up CD that lets you switch to a higher rate if one becomes available. Brokered CDs are sold by brokerage firms rather than banks and often offer higher rates, though sometimes they come with a greater level of risk.

Balance Terms and Withdrawal Penalties

The longer the term of a CD, the higher the rate it offers. If you make an early withdrawal, you typically have to pay a significant penalty. Read the fine print of long-term CDs to see if you can find some with lower withdrawal penalties. Sometimes the higher withdrawal penalties apply only to withdrawals made early in the term, or sometimes the rate is so high that the extra risk is worth it.

Look for Deals

Banks regularly offer special deals on CDs to attract interest and gain new customers with money to invest. Look for unusual terms that may give you a little boost in earnings, and pay attention to special promotions.


Comparing certificate of deposit rates used to be simple; you'd see what rates your local banks were offering and choose the highest one. CDs are still a relatively simple and low-risk form of investment, but they have diversified to provide more interesting and sometimes more lucrative options. Pay attention to the rates, terms and special features of the CDs available to you to find the best options for your own portfolio. Here are some tips to help you choose CDs with the best rates and terms.

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