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The Internet has made it extremely easy to research the best bank rates CDs (Certificate of Deposit) offered throughout the U.S. Using a few clicks, you will be able to get a broad comparison of current CD rates along with the term for which the rates are applicable. You can use a few key metrics while evaluating the best interest rates on CDs:
Minimum Investment Amount & Duration
The best interest rates on CDs will typically be offered on the basis of a higher minimum amount to be deposited up front and be locked in for longer terms. Ensure that you will be able to provide this balance and remain locked in for the duration of the term before committing to the rates.
Risk Appetite
Bank CDs are guaranteed for up to $250,000 through the Federal Deposit Insurance Company (FDIC). If you are depositing more than $250,000, you may want to check the policy of the institution for securing your investment in the event of bank insolvency. The FDIC recently increased the deposit insurance amount and made it valid until December 31, 2013. On January 1, 2014, the FDIC will revert to it's $100,000.00 standard insurance amount.
Flexible Rate Options
Certain CDs offer a fixed interest rate for the duration of the deposit, while other are tied to the base interest rates set by the Federal Reserve Bank. If you feel that base interest rates are likely to go up, you may want to consider the latter option to avail a better rate of return in the future.
Early Withdrawal Penalties
Make sure you read the early withdrawal penalty rules regarding your investment. Attractive rates may result in longer lock in periods and stiff penalties that could easily outweigh the better rate term. You may consider staggered CD terms to get the best options of interest rates and liquidity.
Researching the Best Bank CD Interest Rates Offered
