A certificate of deposit, also known as a CD, is a sensible savings option for many reasons. For one, CDs generally accrue more interest at higher rates than a regular savings account, which will help your money grow faster.
When considering a certificate of deposit, first think about why you are opening the account. Are you saving for a major purchase, for retirement, or are you just trying to grow your savings for emergencies? There are many good reasons to save, and thinking about your financial goals and needs up front will help you determine the type of certificate of deposit to open.
CD terms vary in length from a couple months to several years. Generally, the longer the CD term, the higher the interest rate, so more interest accrues, and you benefit from maximum earnings. But if you foresee needing to withdraw from the CD after only a few months, you may want to stick to a CD that has a shorter term or consider the Ally Bank No Penalty CD, which earns a great interest rate and can be withdrawn - including earned interest - without a penalty any time after the first six days of funding.
The next thing you need to look for is for a competitive interest rate. Banks in different parts of the country offer different rates. By using the Internet to research CDs at different institutions, you can easily compare rates online. In addition to the convenience of online banking, higher rates can generally be found with online banks like Ally Bank. In fact, we let you compare our rates with those of our competitors at Allybank.com to make sure you're getting a competitive rate for your money.
Certificates of deposit are a sound way to build your savings, so remember to look not only for the highest CD interest rate available, but also check the terms to make sure you find the CD that fits your financial needs. Learn more at allybank.com or call live, 24/7 customer service at 877-247-ALLY (2559) today.