What Do Retirees Think the Best CD Accounts Have in Common?

Safety, Accessibility and a Decent Interest Rate Are Important.

October 2012

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Most retirees agree that safety of principal is an important consideration for at least a portion of their savings. CDs certainly meet that criteria — but which are the best CD accounts for retirees needs?

The AARP is a source many retirees turn to for information and advice. And an article in the money section of the AARP website discusses the wisdom of keeping at least a portion of your savings in what they call, "safe investments" such as "certificates of deposit, money market accounts, money market funds, and U.S. Treasury bills" — where there's, "little or no risk that you'd lose principal."

So as the AARP mentions, CDs can play an important role in your retirement portfolio. And when shopping for a CD, three things they urge you to look for are safety, accessibility, and decent interest.

Safety.
Safety of principal and interest is one of the key attractions of CDs. To many, the best CD accounts are Federal Deposit Insurance Corporation (FDIC)-insured, and your deposits in Ally Bank CDs are all FDIC insured to the maximum allowed by law.

Accessibility.
It's important to consider your time horizon to select the best CD accounts that meet your accessibility requirements. Do you want your money available in 3 months? 6 months? One year?

Longer-term CDs typically pay higher interest, but do require you to commit your money for a longer time period, since you'll typically pay a penalty for early withdrawal. You can mitigate this issue by CD laddering — creating a portfolio of CDs with staggered maturity dates — so that a portion of your money is available to you on a regular, scheduled basis.

Another solution to more accessibility is the Ally Bank 11-Month No Penalty CD. This CD gives you the flexibility to withdraw all your money, including interest earned, without any penalties, anytime after the first six days following the date you fund your account.

Interest.
The AARP advises you to comparison shop for interest rates, and we heartily agree. You can compare the best CD accounts at an online source like Bankrate or AARP. Just be sure to note the minimum deposit to open, as some banks' best CD accounts are only offered to those who deposit a large amount. By contrast, we offer the same great rates to everyone, and you can open and fund any CD with any amount.

You can also compare Ally Bank CD rates with rates from competitors around the country at Allybank.com. On our easy-to-navigate site, we also provide product highlights and customer ratings, offering a little extra insight as you compare the best CD accounts for your needs.

Questions? A knowledgeable Ally Bank customer service representative is always available via email and chat, 24/7. Or you can call us anytime, 24/7, at 877-247-ALLY (2559).