For savers who won’t need their money for an extended period of time, interest rates on CDs can be worth a look.
People generally can withdraw their CD interest at any time throughout the term. There are penalties for redeeming the original deposit. “If it helps you to think, ‘I can’t get that money,’ it’s worth it,” said Patricia Seaman, senior director of marketing and communications at the National Endowment for Financial Education.
Savers should look for CDs with the lowest penalties, said Allan Roth, founder of financial advisory firm Wealth Logic. That way they can gain the benefit of a high interest savings account without the restrictions of a CD. “If you need the money, you break the CD,” he said.
Here are some CDs with the best rates:
Ablebanking, an online wing of NorthEast bank, offers a 2.5 percent rate on a one-year CD, and 2.8 percent rate on a two-year account. You need to deposit at least $1,000.
Marcus by Goldman Sachs also offers certificates of deposits with higher-than-average returns, although there is a $500 minimum deposit. A one-year CD comes with a 2.45 percent rate; a five-year CD with a 3 percent interest rate and a six-year CD has a 3.1 percent annual rate.
Synchrony Bank offers a 2.4 percent rate on a one-year CD, and 2.85 percent rate for a five-year one, but you’ll have to deposit at least $2,000.
Barclays offers a 2.4 percent yield on a one-year CD — and there is no minimum opening deposit.
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If you can make your way to Teaneck, New Jersey, Cross River Bank offers a 2.63 percent rate on a 12-month CD, and 3.56 percent rate on a four-year CD. You have to open the account at the branch but anyone can do so.
Savers can also “ladder” their CDs, in which a person deposits money into, say, a one-, two- and three-year CD, so that they’re not tying up too much of their money at once and can reinvest their savings should rates rise.