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With inflation affecting everything from Grocery shopping For veterinary bills, millions of Americans are looking for new ways to cut corners and save money. While the interest rate environment has discouraged potential home buyers and owners from refinancing, the news has not been all bad. Interest rate on High Yield Savings Account And Certificate of Deposit (CD) has increased significantly in recent months, giving account holders a new opportunity to increase their savings.
To do this successfully, account holders should aim to secure an account with high interest rates and little (or no) maintenance fees and penalties. But how can you find a CD with a good interest rate? That is what we will answer in this article.
If you think a CD makes sense for you, start exploring your options now to see how much more you can earn.
How to find a good CD interest rate
There are several ways to secure a good CD interest rate. Here are three to know:
Focus on the economy
It may seem obvious, but there are better times to open a CD than others. When interest rates were near record lows in 2020 the amount of interest you could earn on a CD was negligible. But the economy has rebounded from the height of the pandemic and inflation has picked up The Fed raises interest rates compensation. This has had a profound effect on CDs with interest rates currently in the 3.5% to 4.5% range (or higher). Compare that to what a traditional savings account can earn (at a rate of 0.33%) and it’s clear that you’re now leaving money on the table without opening a CD.
And don’t forget – CDs offer locked rates so even if inflation slows and interest rates flatten in the coming months, you’ll still be set at the rate you opened the account with. Start exploring your CD options now and gain more interest
Shop around
Just like you don’t necessarily buy the first house you tour or the first car you test drive, you shouldn’t automatically open a CD with your current banking institution. Shop around first to see what’s available in the market. You may be able to get a better interest rate elsewhere. There are several lending institutions – including both online and physical locations – currently offering competitive CD interest rates. So do your homework and research your options. Your current institution may be your best bet, but it’s also possible that you can find higher rates elsewhere. However, you won’t know which is best until you’ve researched all your options.
Check rates here now or use the table below to start CD shopping.
Consider length
Historically, CDs with longer maturities have offered higher interest rates than shorter maturities. So, if you want a CD that earns more interest, consider leaving your money in the account for a longer period of time (think years instead of months). That said, the rate environment is still volatile and banks are reacting to it in real time so you can potentially secure higher rates for a short period even in today’s climate. Explore all your options before signing on the dotted line The length of your CD will go a long way in determining how much interest your account will earn.
Bottom line
While CD rates have been low in recent years, the current rate environment makes them a viable option for many account holders. Those interested in securing a good rate should pay attention to the economy so they can open an account when rates are highest. They should also shop around to find an institution that offers the highest rates (with little or no fees). Prospective account holders should also look at the length of a CD because it can affect what interest the bank is willing to pay.
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