CD Interest Rates Guarantee the Principal

Calculating CD Interest Rates

September 2012

Generally speaking, CD interest rates are higher than interest rates for regular savings accounts. But they are usually lower risk than stocks.

That difference may cause some people to balk at a CD rate of, say, 1 percent. So, Ally asked Rick Kahler, president of the Kahler Financial Group in Rapid City, South Dakota to weigh-in on that viewpoint.

"I sometimes get pushback from clients saying, 'CDs are only paying 1 percent. Isn't there something that can do better?'" Kahler says. "The answer is, 'Yes, there are things that can do better.' But let's go back to the whole reason that we're using a CD. We want our principal guaranteed. We don't want fluctuations. So it's not about [a] return, it's about the safety."

First and foremost, CDs are a great way to keep up with inflation while also having easy access to your money. In addition, they are FDIC insured up to the maximum allowed by law, meaning your money is not only on track with the rest of the financial world, but it's also safe.

Rates for Certificates of Deposit (CDs) can vary widely among financial institutions, but Ally is able to offer some of the most competitive available. Take a look at our offerings and see which one works best for you.

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