CD Rates Today
CD rates vary significantly across financial institutions. To secure the best rate, it's crucial to conduct thorough research.
Current CD Rates
In today's market, shorter-term CDs offer higher rates than longer-term ones. The highest rate available is 4.40% APY from NexBank on its 1-year CD (requiring a $25,000 minimum opening deposit).
Earning Interest with CDs
The amount of interest earned from a CD depends on its Annual Percentage Yield (APY). This rate represents your total earnings over one year, considering the base interest rate and compounding frequency.
For example, investing $1,000 in a one-year CD with 1.81% APY (monthly compounding) would yield $18.25 in interest by the end of the year. With a 4% APY CD, you would earn $40.74 in interest over the same period.
Types of CDs
Consider the following types of CDs for added flexibility:
* Bump-Up CD: Allows a single interest rate increase if market rates rise.
* No-Penalty CD: Provides the option to withdraw funds early without penalty.
* Jumbo CD: Requires a high minimum deposit but offers potentially higher rates.
Remember, brokered CDs may offer better rates but carry higher risk and may lack FDIC insurance.