When shopping for certificates of deposit, also known as CDs, the rate is a key factor. CDs that have longer time periods, or maturities, usually pay higher rates than those that feature shorter maturities. This is because the investor must leave the money with the institution for a longer time and the higher rate is the bank’s way of rewarding investors for this.

In most cases, the general state of the economy determines what is considered a competitive interest rate. In turn, this dictates what are considered the best CD rates and these rates can increase or decrease. Investors must decide whether they want to lock in their money at a higher rate for a longer period or wait to see if rates will be better in the short-term future.

Shopping for the best CD rates involves checking with local credit unions and banks to determine if they have any special offers. Offering the best local rate on a CD is the ideal way for a banking institution to quickly get deposits on its books. Individuals should also shop online because banks that operate only online tend to offer better CD rates since they have lower overhead costs.

Another place to look for CD rates is with a brokerage firm. Financial advisors can access brokered CDs that are usually sold in large blocks. It is important to work with a trusted broker and be aware of the risks because it can be expensive to get out of a brokered CD before it matures.

CD rate shopping can be made easier by reading online personal finance blogs. These folks have done research to find the best CD rates and they are willing to share with others where these can be found. Sometimes, getting the best rates involves making a larger minimum investment so be aware of all the terms and conditions.

Keep learning more:

1. The Advantages of Investing in Bonds


2. Do Not Put All Your Money In Stocks


3. Government Bonds 101: Introduction to US Treasury Bills


4. Inflation is the Biggest Risk of Bond Investing


5. TIPS 101: Treasury Inflation Protection Securities


6. What Is Dividend Investing


7. Why Everyone Needs Cash

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