December 2, 2021

Compare CD Rates

compare cd ratesMaking an investment using a CD can be a great opportunity; however there are some things that everyone should know. CD rates can range quite a bit, making it difficult to choose the right financial institution. In order to get the best rate of return on one’s investment, it is crucial to compare CD rates between banks as well as credit unions so that the fixed rate is the highest currently available in the market.

More Necessary Than Ever

Several years ago, the comparison of rates for CDs weren’t as crucial as they are today because rates were at an all time high. It didn’t matter if one was 0.1% higher than another since they were all over 3%, generally speaking. Banks have not been able to offer such great rates since the economy has been suffering around the globe. It is more important than ever before to look for be best CD rates because the smallest percentage increase can mean a few hundred dollars of extra profit.

No one is going to turn away hundreds of dollars, especially when one is considering a CD for tens of thousands of dollars. The more that one invests, the more that the overall profit or rate of return will be. It is this reason that doing one’s homework can pay off.

Check and Recheck the Fixed Rates

The fixed rate needs to be compared not just between banks and other financial institutions but also from day to day, week to week. Rates can increase and decrease within a particular day, so it is the goal of the investor to get the rates at the top of their peak instead of the low of their valley.

In order to effectively find the best fixed rate, one must compare CD rates accurately. Many banks offer different rates based upon the length of the CD as well as the amount of the CD. Assume that one is planning on investing $1,000 for 12 months. This means that the money will not be accessed for an entire 12 month period. Should one decide that they can go even longer before needing to access the money, then the percentage rate can be even higher.

There needs to be some consideration based upon analyzing the rate to decide if it is better to get a CD for a longer term or not, even if one doesn’t anticipate needing it. This is because the CD rates are fixed. Consider the possibility of going for 12 months, cashing in the CD and then turning that money into another CD, this time with a higher rate because the rates have gone up in the past year.

Consider and Compare All Options

compare cd rateBanks and credit unions both should be considered for the purchase of a CD. If one has access to a credit union because of a particular employer or because where their checking account is, it could mean the difference of half or even a full point difference in the available rate.

Equal investment amounts and terms need to be compared so that equal comparisons are being made and the best rate can be determined.