What are the secrets of finding the best CD rates?

If you are looking to invest money in something, Certificates of Deposits are usually a good idea. They will get you more money compared to regular savings accounts, and that is because they come with higher rates.

The only drawback is that you have to leave your money untouched for a specified period of time. If this isn’t a problem for you, opening a CD should be something that you can try. But before you make a choice, it is essential that you analyze all the option and gather all the information that you need. Today we will share with you some tips that should make it easier to for you to find good CD rates.

Decide how much you want to invest

Before you start looking for CD accounts, you should decide how much you are willing to spend. You can determine the sum by factoring in an emergency fund and all expected near-time expenses. Deduct the amount and the rest can be invested in a Certificate of Deposit. The annual percentage yield is usually based on the amount you deposit.

Nontraditional banks

If you are looking for the best cd rate, you might want to try sometimes else besides the traditional bank. In fact, nontraditional banks usually offer some great deals, and the rates are significantly higher compared to regular banks.

Go for long-term plans

At first, you might be tempted to look at the higher rates, but the truth is that you should focus on long-term Certificates of Deposit. While it is true that it will take more time until you will get your money back, your rate will be increased.

CD bullet approach

The bullet approach for Certificates of Deposit is when you choose the same maturity date for your CDs, but you purchase them at different times. By doing this, you will avoid interest risks, and it is the best solution if you want money for a long-term goal.

CD ladder approach

If you are sure that you won’t need to touch your funds right away, it is recommended that you create a CD ladder. This means that you can create multiple small CDs accounts instead of creating just one with a significant amount of money. The maturity dates should be different for all of them; you can choose six months for one, another one after a year.

CD Barbell Approach

This approach is similar to the ladder one, but in this case, you only need to set long-term and short-term CDs and leave aside medium-term ones. With the long-term CDs, you will get high interest rates, while with the short-term ones you will be able to get your money back quickly.

Make sure the bank is a legit one

If you decide to work with a new bank that is not that well known, you should make sure that it is safe enough. Don’t deposit any sum of money before checking their legitimacy. You can do that by calling the FDIC.