High Yield CD Rates, Earning More Money

In recent times, the Federal Reserve Bank has lowered interest rates for all types of savings, which makes it difficult to earn a decent amount of interest.  In addition, this bank, which is controlled by the federal government, dropped the amount charged to commercial banks, making it tough for lenders to make loans.  Obviously, to boost the current economy, money has to move and people need to make high yield CD rates so they are more willing to invest.[br]

In recent times, the Federal Reserve Bank has lowered interest rates for all types of savings, which makes it difficult to earn a decent amount of interest.  In addition, this bank, which is controlled by the federal government, dropped the amount charged to commercial banks, making it tough for lenders to make loans.  Obviously, to boost the current economy, money has to move and people need to make high yield CD rates so they are more willing to invest.[br]

Sadly, until the Federal Reserve Bank stops lowering the amount of money people can make on savings, no matter the form such as money market, certificate of deposit, or traditional savings, securing high yield CD rates is going to be somewhat challenging.  If you look at five years ago, banks across the United States easily provided high yield CD rates of 4% and sometimes higher.  Therefore, someone locking in a certificate of deposit for one to two years would make a nice return but today, to earn that same amount, the money would need to stay in the CD for four, five, or six years.

Keep in mind that the economy is starting to turn, which is making it easier to find high yield CD rates.  A prime example is with Hudson City Bank.  Today, this bank offers an Annual Percentage Yield of 2.80% with a minimum of $5,000 investment.  Although this is not close to the 4% earned only a few years ago, it is an improvement over what you could earn just one year ago.  Now, every bank has certain stipulations.  For instance, with Hudson Bank, you would need to be a resident of New York, New Jersey, or Connecticut to qualify.

Regarding the best high yield CD rates that you can secure today on a one or two-year certificate of deposit begins around 1.90%.  In fact, most banks currently offer no more than 2.30 APY and even those are challenging to find.  This is why if you want to invest now and to find high yield CD rates, expect to do your homework.  Although frustrating, it is a fact but with some increases seen in recent months, it is estimated that interest rates will continue to rise as the economy stabilizes.[br]

Unfortunately, some banks only offer 0.74% as high yield CD rates, which when compared to numbers from 1983 are the lowest.  Then when you consider that in the fall of 2006, the Annual Percentage Yield was as high as 3.89%, it leaves all investors yearning for better rates.  Now, the question becomes whether to wait to invest in a certificate of deposit with low rates currently being offered or to go ahead and let interest do its job.

The answer is that you should go ahead and invest but because you will not find high yield CD rates as you would have several years ago, you want only short-term investment periods.  In other words, rather than lock your money up for five or six years, invest for not more than one, possibly two years.  During that time, you would earn some money and the anticipation is that during that time rates would also increase.