Investors interested in getting the highest cd rates should consider investing in CDs that contain considerably long terms. When it comes to CD accounts, the longer the CD is for in terms of time, the higher the interest rate is. For example, a six-month term on a CD account may yield a 3 percent interest rate while a CD account that is for 60 months may have an interest rate that offers 3.73 percent interest on the initial CD deposit.
Jumbo Certificate of Deposit Accounts
Regular CD accounts have lower interest rates than Jumbo CD accounts; this is because the standard CD accounts are insured by the FDIC, whereas Jumbo CD accounts are a bit riskier. Jumbo CDs can yield interest rates that are as much as 2 percent higher than those offered with a regular CD account, but the initial deposit is not insured. The reason the principal is not covered is because a Jumbo CD is only started if the deposit is 100,000 or more. Thus, for the average individual, a Jumbo CD account may not be practical and many businesses, corporations, and organizations invest in Jumbo CD accounts.
CD Account Penalties
For those individuals looking to get the best CD interest rates, it must be noted that the sooner money is withdrawn the less interest on will receive. In fact, if the CD account is subjected to an early withdrawal the investor is apt to lose some of the interest accrue via the penalties imposed. In an effort to make the most on CDs and to get the highest CD rates possible, not only should the CD be allowed to reach maturity before withdrawal, but also the investor should not opt to take withdrawals on the interest if allowed to do so. Finally, it is beneficial if the investor research different banks and the rates they offer-different terms and interest rates can be located and the investor can compare and select the highest CD rates available.