High Certificate of Deposit Rates — Three Keys

CD rates continue to creep downwards.  We have joked about pretty soon we may be paying backs to  insure our funds.  It turns it, we may have been prophets.  I’ve heard three different situations of banks charging assessment fees on large Money Market accounts.  One bank was paying 0.25% and charging fees that equaled 0.12%.  You may wonder why would we be even looking at a rate like that.  When your client has $50 Million that has to be in FDIC insured products, that is about what the options are without taking 0% in a non-interest bearing account.

Of course you aren’t here for my problems nor 0.25% money market accounts.  You want high Certificate of Deposit rates.  So here are some places to find them.  First, there are some well established sites have that have been at this rate searching thing for a while.  These sites have a pretty good pulse on the CD market. You can try bankrate.com, bankfox.com, & Credit Union CD Rates.

The second key is to do your own searching.  It is probably best to make your search as specific as possible.  For instance, something like “best jumbo cd rates” or “best CD rates in [enter your state]”.  You can then compare the offers you find there to what is found using general search terms like “CD Rates” or “IRA CD Rates”.  Finally, make phone calls to the find the best current offers to the featured banks and credit unions that you found.

The third key incorporates one and two, but your focus is on finding 5-year CDs with low early withdrawal penalties.  The reason for this is rates make stay low for a extended period of time.  For as long as the low rates stay around, you’ll enjoy the higher rate of the 5-year CD.  If after two or three years, rates have risen significantly, you can close your CD without too high of a cost and take advantage of the higher rates.