Top CD Rates–Investors can find the top CD rates on the market with a little bit of research. Banks try to compete for customers’ business by adjusting rates to numbers that investors cannot resist. How do investors go about finding these rates? Well, rates are available online and at local banks. It is very hard to say where investors can find the best deals because financial institutions adjust their rates at various times for various reasons, but this does not mean that investors cannot snag the best CD rates. Some banks consistently offer the best rates while others fluctuate with their offerings. When searching for CD rates, investors must remember that top rates equal top profit.
Reasons You Want to Find the Top Certificate of Deposit CD Rates When Investing
- Increased Profit – Investors approach CDs with the intention to gain money over time. Depending on the terms and the amount of money invested, the profit can vary greatly. Finding the top CD rates guarantees that the money invested will return the greatest amount possible. For example, 2% interest gains double the amount of interest that a CD with 1 % interest does.
- Investors Make Decisions – CDs are one of the only investment ventures that give the investor choices in the terms and rates. Investors are not obligated to take the terms or the rates that a particular financial institution offers. Excellent rates are available anywhere in the country. Investors may decide to accept a CD rate from a bank on the other side of the country if they wish. At the end of the term agreement, investors get to make decisions about what to do with their money. The option to withdraw or reinvest the money is totally up to the investors.
- Automatic Rollover Option – Many banks offer an easy option for investors to reinvest the money automatically after the terms end. Receiving the highest CD rates many help to lock in rates for the future. A grace period is available to allow investors a chance to decide if they are still interested in reinvesting the money once the terms end. Financial institutions begin reminding investors about the approaching maturity date several months before it ends. The automatic renewal process can be very tricky so investors must take caution with this option to preserve their money. The automatic renewal process varies by financial institution. Many financial institutions renew or rollover the CD account at a lower interest rate. Investors must remember to discuss the new terms with someone at the financial institution to determine the new interest rates. Doing so will protect investors’ money and allow them options.
- Bump Up Option – Receiving the highest interest in the beginning of the CD’s terms makes this option a little more valuable. Investors has the option to increase their account’s interest rate only once during the CD’s terms. Timing is everything with this option. Experienced investors have a good idea when to utilize this one time option to increase their earnings. Beginners may want to research historical rates and current stock prices to determine when it is a good time to use the bump up option.
Investors have the right to submit a request for a one-time bump up of their current CD rate. The process can be lengthy. It all depends on the financial institution. It generally takes a few months to get an approval. Investing in CDs at larger banks may expedite the process. It is important to remember that the maturity date remains the same.
For example, if investors put their money in a 5-year CD and there are 2 years remaining in the agreement, they must continue with the bump up rate that they receive for the next two years. One drawback to bump up option is that if investors do not time their bump-ups correctly they may lose money if interest rates increase before the maturity date.
List of Banks that Consistently Offer Top Certificate of Deposit CD Rates
Based on Internet research in July 2011, banks that continue to offer the top CD rates are as follows:
- Aurora Bank
- Ally Bank
- Bank of Internet USA
- Discover Bank
- Virtual Bank
- Sallie Mae
- Lone Star Bank
The listed banks are not listed in any particular order. Investors must research a particular CD term to determine which bank offers the highest of all listed banks. Also, new banks are always forming, and may offer even more competitive rates to lure in new business. So always check the latest rates being advertised.
Investing money into CDs can be quite tricky. As long as investors are willing to let their money sit, CDs are always an excellent choice. Take the time to research the best rates to increase the potential gain on each CD investment.
For more information on interest rates, please visit our CD rates section.