Are High Yield CDs the best investment now?
CDs are a popular investment strategy. They are versatile, easy to manage, and practical for both smaller and larger investments. Obviously, you want to make the most of your money, and choosing the right CD can help you earn substantially more on your investment. A CD is a special type of deposit account with a bank or brokerage institution that often offers a higher rate of interest than a standard savings account or money market account. While you may have previously bought a CD at your bank, for a period of time ranging from three months to several years, you may be surprised to learn that you can find much better rates and higher yields on CDs with a bit of shopping and research.
First and foremost, know how much you have to invest, your own risk tolerance, and the duration of time available for the investment. With these criteria in mind, you can begin to shop for the best high yield investments for your needs. As with many other investment options in today’s market, you will find that you have many choices to make when looking at CDs available in your local bank and elsewhere. You may find yourself choosing between fixed and variable interest rates, differing terms and more. The FDIC offers some information on these factors at http://www.fdic.gov/deposit/deposits/certificate/index.html.
What rates should you expect and where should you keep your investments? Higher deposits often net higher interest rates, and typically longer term CDs have a higher interest rate than a short term option. You can buy locally or via a major brokerage. You can also deal with a bank that does not operate in your area via online banking options. Bankrate offers an easy to use a simple search feature to find the highest possible interest rates within your own parameters. This way, you can select the duration of investment, as well as other details. For the best rates, you may want to consider shopping for and buying your certificates of deposit online.
Today, smart shoppers can find rates between 4 and 4.64% for a one year term. While some of these high yield options come with high minimum deposits, you can find one year options with a high interest rate and low required deposits, as low as $1000. Many of these allow you to open accounts online in only minutes, making investing and money management easier than ever.