Finding the best CD rates
Shopping around for the best interest rate can be a tedious task. Minimum investments, investment periods and thousands of banks make shopping for a CD a difficult process.
Stay away from corporate banking
Local for profit banks are generally the last place to look. These banks are heavily taxed, unlike credit unions, and are out to profit, not benefit the members. For profit banks usually have lower rates on CDs because they would rather borrow from the Reserve than from individuals. For profit banks are also known for having significant fees for early withdrawal, and less options than credit unions.
Credit unions
Credit unions are the best place to check when considering in town banking and CD rates. Credit unions are not for profit and look to serve members before making a profit. Credit unions usually have favorable withdrawal policies and a plurality of plans spanning from monthly interest payments to compounding CDs. If you want the high rates from someone in-town, a quick run to a local credit union is a great place to start.
Look online
For those willing to take the plunge with online banking, you will find the best CD rates from low-cost for-profit online banks. These banks cut overhead by operating online and pass the savings to their customers and investors. Online banks often use CD rates as a marketing tool and offer very high promotional and non-promotional rates designed to pull in new customers. You might be able to find rates up to a full percentage point higher than off line banks. With this in mind you will incur some drawbacks such as overall convenience and limited access to your money.Resources for finding the best rate
Websites such as Bankrate.com give a list of CD rates offered around the country. The tech age has brought unforeseen competition in CD rates that has undoubtedly benefited the consumer. The top yielding banks are ever changing, utilizing tactics such as adding .1% here and there to be listed as the #1 yielding bank.
