CD Rates: Highest Return or Shortest Time? | Ally Bank

Discover Great CD Rates at Ally Bank to Help You Reach Your Goals.

September 2012

When it comes to researching CD rates, the highest rate can often be the most appealing. But before you put your money in a CD simply because it has the highest rate, it might be smart to take into consideration your savings goals and exactly what product will get you there.

Often, CDs with higher interest rates also involve going longer without accessing those funds. This may be fine if it fits with your savings plan, but if it doesn't, you may want to rethink where you put your money.

Great CD Rates: Highest Yield, But What's the Catch?
Carefully choosing your CD term is an important part of opening a CD account, but so is knowing what the early withdrawal penalty is — even when you don't anticipate needing access to your money before maturity.

The reason: With CD rates the highest yields usually come attached to products with the longest terms — and with some banks, the biggest deposits. Especially when the market is volatile, it's good to know — or be able to know quickly — what your cash situation is so that if an opportunity presents itself or an unexpected expense comes up, you can efficiently judge the consequences of moving a CD to an investment or use it to tackle that surprise expense.

The other issue to be aware of is the minimum opening deposit requirement. With many banks' CD rates, the highest yields generally go only to those willing to make large deposits. It simply may not make sense for you to tie up a significant portion of your cash in a CD.

What's Better with CD Rates — Highest Yield, or Shortest Term?
Obviously it depends on your goals, and the more specific you can be about your goals, the better you'll be able to decide.

Some time-bound goals are fairly concrete, and others are flexible. Either way, when you reach short-term goals sooner — consistently having enough to pay your property taxes in 11 months instead of 12, for example — the resulting cumulative time savings might mean a significant opportunity to accelerate your efforts toward reaching a longer-term goal like funding your retirement, for instance.

With Ally Bank CDs, some of our shorter-term accounts actually earn better yields than some banks' longer-term CDs, according to the interest rates as published by Bankrate.

We also give every customer the opportunity to earn interest at rates that are consistently among the most competitive available in the country — with no minimum opening deposit. Plus, we compound interest daily to maximize your earnings. And whatever your financial goals, Ally Bank offers a range of CDs that can help you get there.

Learn more about the High Yield CD, No Penalty CD, and Raise Your Rate CD — all come at some of the most competitive rates out there. If you'd prefer to speak to someone, give customer care a call anytime, 24/7 at 877-247-ALLY (2559).

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