Planning to Save

When Is a Good Time to Get a CD?

September 2012

A certificate of deposit (CD) can be a great alternative to a regular savings account if you’re looking to earn interest at a higher rate. CDs are similar to savings accounts in terms of purpose and function. However, when you open a CD, you agree that you will not withdraw the funds until the maturity date, which varies from a few months to several years after you open the account, depending on the term you choose. If you decide to withdraw the money before the term is up (maturity), you may have to pay an early withdrawal penalty. Generally, the longer the CD term, the better the earnings.

Online Bank CDs
As published by Bankrate.com, online banks generally offer higher interest rates than traditional brick-and-mortar banks, because they have lower overhead costs. But interest rates are only the beginning when comparing bank CDs. Be sure you research the terms of each account agreement, including things like deposit requirements, restrictions, and how often the bank compounds interest. You also want a bank with great customer service.

With Ally Bank, you can open and fund a CD with any amount and get the same great rate no matter how much you deposit. Plus, Ally Bank compounds your interest daily so your money grows faster.

When to Open a CD
The best time to get a CD depends on your financial goals. Because most CDs have an early withdrawal penalty, you'll want to make sure that you can afford to be without access to your cash until the CD matures. If you're unsure, however, you still have options. With the Ally Bank No Penalty CD, you can get a fixed rate CD that allows you to withdraw all your money without penalty, any time after the first six days following the date you funded your account.

Is now the right time for you to get a CD? Explore the Ally Bank CDs at allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).

Ally Bank, Member FDIC

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