Interest CD Rates

By: EconomyWatch Content   Date: 5 November 2009

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The Internet has become the best medium for investors to seek information on Certificates of Deposits (CDs), be it the latest updates or the best CD interest rates. Although the payback from CDs is dependent on the bank’s ability to pay, CDs are still the safest investment instruments available today. This is because CDs are insured by the Federal Deposit Insurance Corporation (FDIC), which means if the issuer bank defaults, the investor does not have to bear the loss. However, it is important for investors to get this in writing from the issuer bank.

 

Interest CD Rates - Finding the Best CD Interest Rates

 

You can maximize your returns from a certificate of deposit by shopping around for the best CD interest rates. Here are some additional factors to consider while looking for the best one.

 

Compare Rates: You can compare CD interest rates of various banks at their respective websites. This can be done using the financial calculators offered at these websites. With a few clicks, you can also get a comparison chart, based on which you can select the CDs with the highest interest rates.

 

Tenure: Before you invest in a certificate of deposit, be sure that you do not withdraw the money before the maturity period. This is because withdrawal before maturity invites a penalty.

 

Trustworthiness of the Bank: When looking for the best CD interest rates, also ensure that the institution you opt for depositing your money in, enjoys a clean record and is not prone to default. This must be a prime factor of consideration for investors, since many banks have defaulted during and since 2008.

 

FDIC Insurance: Make sure that the bank you choose is insured by the Federal Deposit Insurance Corporation (FDIC). This body insures all certificates of deposits that are worth up to $250,000. If your deposit amount is greater, check the bank’s insurance policies regarding amounts that exceed the limit. 

 

Call Features: Some issuers offer CDs with call features. This means that the issuer can call the deposits when the interest rate is not in their favor. Try to avoid such types of CDs.

 

It is advisable to check with various issuers about CD call features, tenure and insurance backing, and then shortlist the best among the available ones.


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