Factors to Consider When You Compare CDs

Compare Certificates of Deposit

October 2012

"If you go back to the way that certificate of deposit (CDs) were designed, the basic reasoning behind them involved two things-interest rate and time," said Wayne Blanchard, a certified financial planner in Orlando, Florida and member of the Garrett Planning Network, in an interview with Ally Bank. "Your decision involves how much money and how much time you're going to commit to a CD."

Those basic factors still are important when you compare CDs. But over the years banks have enhanced them considerably by adding more features to CD products.

When you compare CDs, consider factors such as the minimum deposit to open and the penalties involved for early withdrawals-factors that can vary significantly. At Ally Bank, for example, you can open and fund any CD with any amount you choose, and we offer the No Penalty 11-Month CD, which you can withdraw including earned interest without a penalty anytime after the first 6 days following the date you fund your CD.

Blanchard also pointed out that some CDs now let you get a one-time increase in the interest rate, which can be important if our rates rise during the life of the CD. At Ally, you can get the Raise Your Rate CD, which allows you to start with a great rate, plus have the option to increase your rate once over the 2-Year term or twice over the 4-Year term if Ally Bank raises the rate it pays on these CDs during your term.

Of course, it's always a good idea to carefully research any CD, because terms may vary.

"When you are getting a CD, even if it is a basic one, know what the rules are," Blanchard said. "Make sure you understand the benefits, features and penalties."

Ally Bank makes it incredibly easy and straightforward to save money with CDs, and we offer some of the most competitive CD rates available anywhere, based on rates published by Bankrate.com. Learn more at Allybank.com or call live, 24/7 customer service at 877-247-ALLY (2559) today.

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