With interest rates fluctuating and economic times uncertain, certificates of deposit (CDs) are still relatively secure savings instruments, and you receive any interest earned on it. As in the past, the various CD options available to you now work in a similar way: You deposit a certain amount of money for a set amount of time. This money is insured by the FDIC up to the maximum allowed by law, making it one of the safer ways to build and grow your savings.
6-Month CD Rates
In general, a CD will earn a higher rate of return the longer you agree to keep your money on deposit. Usually, the highest rates are available for 5-year CDs, compared to lower rates for 3-month CDs. 6-month CD rates are usually not as high as those of longer-term CDs, but there can still be advantages to choosing short-term CD options.
Yield vs. Flexibility
With some savings instruments, such as money market accounts, your money is subject to variable rates, but you get the advantage of easy access to your funds, subject to the standard limit of six preauthorized, automatic or check withdrawals or transfers per statement cycle. This limit does not apply to ATM withdrawals. On the other hand, once you deposit your money into a CD, your annual percentage yield (APY) typically will not change unless it is a variable rate CD.
For example, 6-month CD rates give you the assurance that you won't lose money at the hands of the current economic climate for those 6 months. It also provides you the flexibility to seize a new opportunity once your CD matures — if CD interest rates have risen in 6 months, you'll be able to take advantage at maturity.
On the other hand, if longer-term CDs seem attractive, but you're concerned about missing out on an upward CD rate trend, you might also consider the Ally Bank Raise Your Rate CD. You can get a great rate on a 2- or 4-year CD, but if you see that our rate on this CD has gone up during the term of your CD, you can just give us a call or go online and request the better rate for the remainder of your term. This option — available once with a 2-Year CD and twice with the 4-Year CD — is yours at no cost and with no strings attached.
Naturally, if 6-month CDs make sense for you, you may want to shop around for the bank that's offering the highest 6-month CD rates. But another important factor is the deposit requirement, if any.
Many banks require a large minimum deposit to get their best rates. But Ally Bank offers great rates to everyone. You can open and fund an Ally Bank High Yield CD with any amount. It's also wise to find out how frequently each bank compounds interest. Some banks compound weekly, monthly or even annually, while we compound interest daily to help your money grow faster.
In any economic scenario, you want to choose a financial strategy that makes sense for you, whether that's taking advantage of 6-month CD rates or something else. Regardless, we offer many CD options with competitive rates. In fact, no matter what term you choose, you'll get rates that are among the most competitive available in the country according to rates as published by Bankrate.
As an online bank, we provide an easy-to-search, user-friendly site and a great customer service experience. You can learn more by chatting with 24/7 live customer service at AllyBank.com, or by calling 877-247-ALLY (2559).