The Growing Types of Certificates of Deposit (CDs)

High Yield CDs, No Penalty CDs & Bump Up CDs

September 2012

The traditional certificate of deposit (CD) is a fairly simple financial tool. But, in recent years, it has been joined by different types of CDs that offer a number of features designed to meet differing consumer needs:

  • For example, today you can find no-penalty CDs, which, as the name implies, allow you to withdraw your money before the CD's maturity date without incurring a penalty. These products can be useful if you like the option of having access to your money in the event of an emergency or you want to be ready to act on a future opportunity in the market. Ally offers a No Penalty CD at a great rate and convenient, flexible access to your funds without incurring a early withdrawal penalty after the first six days following the date you fund your account.
  • You'll also find high-yield CDs, which have fixed rates that usually run higher than those of average CDs. In general, these tend to require longer investment periods and a larger minimum deposit—but this varies significantly from bank to bank. Take a look at Ally's High Yield CD (open and fund with any amount) to see what kind of rates are currently available.
  • Another variation is the "bump up" CD, which provides the option to change the rate, typically just once over the term of the CD—a provision that allows you to take advantage of rising rates, without having to worry about the potential downward adjustments of a variable rate. The bump-up CD goes by many names in the marketplace, but the concept is basically the same. This type of CD is currently offered through Ally in the form of our Raise Your Rate CD.

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