For Top CD Rates, I Look Beyond My Friendly-neighborhood Banker
My local bank is great. Theyre convenient, friendly, and even give me FREE checking. Unfortunately, their interest rates for CDs and money market accounts typically stink. Thats why I was happy when I discovered the site discussed in this post.
WHY SETTLE FOR AVERAGE?
If, like me, you keep some of your portfolio in fixed income investments (CDs and bonds), the site below is one you'll want to bookmark. Heres why...
According to a recent USA Today, the average 5-year CD was paying 3.73%. But, with a couple of clicks on the Web, I also found that the top rates in the nation (for 5-year CDs) were as high as 4.74%, with an APY* of 4.85%.
That means a 5-year CD from the nation's top paying bank, promises monthly interest payments 27% higher than those being offered by banks that only match the national average.
* Annual Percentage Yield (APY) assumes that interest is reinvested in the CD, so it compounds (grows) over time
LINKS
When quoting interest rates, USA Today, Kiplinger 's and even The Wall Street Journal reference BankRate.com. So, I figure this site is totally legit. Also, they have tons of educational articles, investment calculators and such, making them a worthwhile destination.
Nations top rates for CDs held in an IRA (or 401(k))
Nations top rates for money market accounts
HOW I USE THIS SITE
1. I follow the links above to check rates.
2. Often times, I compare CD rates with the interest rates being offered on high-quality corporate or agency bonds (more on this in future posts).
3. I try to stick with banks rated 4 or 5 stars.
4. If appropriate, I may compare different terms (i.e. 3 vs. 5 years, for example).
5. If appropriate, I may look at rates for Jumbos (a Jumbo, which is usually $95K - $100K minimum, often pays more).
NOTE: Remember that FDIC insurance coverage for an individual can be as low as $100,000
6. Once I select CDs that interest me, I then go through additional due diligence to validate that the CD is FDIC insured, and that the bank looks safe.
about - portfolio - feedback - disclaimer
• VirtualBank gives you up to 5.13% APY for your savings!
• Blue Cash from American Express: 5% Back on Gas, Up to 5% cash back on eligible purchases, No Annual Fee, 0% Introductory APR for 6 months, Pay over time
• Try Starwood Preferred Guest Credit Card from American Express. Great rewards and first year fee free!
• Bad Credit Home Loans
• Life Insurance in 10 minutes if qualified. No medical exam.
When a mutual fund claims an average annual return of ___% per year over the last ___ years, or you see the phrase compound annual growth rate (CAGR), do you know what these terms really mean? In an earlier post, I noted that -- over ... Read
In an upcoming post, I plan to discuss some of the caveats people should consider when using compound interest projections (i.e. how money grows over time). So, I was looking for a financial calculator to run sample calculations, when I came across a nice one ... Read
