What to Do When CD Rates Fall

Making Sure You Get the Best Bank Certificate Of Deposit Rates

September 2012

Wondering what to do with savings you've earmarked for Certificates of Deposit (CDs)? It's understandable that some consumers are eyeing longer-term FDIC-member bank certificate of deposit rates as a way to balance against risk.

But if one of your CDs is close to maturing, however, it might make sense to rethink your strategy a little, Eric Stiff, vice president of marketing for Members Credit Union in Winston-Salem, N.C., told Ally Bank.

"In this rate environment, it's not always a good idea to tie yourself to a really long-term CD," Stiff said. "You may not want to lock yourself into something with so low a rate. But CDs are still a good savings tool, as long as you choose carefully."

Moreover, as Chris Zeches, a Certified Financial Planner(R) with Zeches Financial Services in Phoenix, Arizona pointed out, a CD ladder might be a great alternative to a long-term CD. In our conversation on CD ladders, he noted that using a CD ladder means, "You know you'll have money maturing periodically, which allows you to reassess. And while your money is very safe in [FDIC-member bank] CDs, you're still not putting all your eggs in one basket. A ladder is a really good way to maximize your return with very little opportunity risk."

And be attentive to penalties for early withdrawal, especially if you're using CDs as part of your emergency-savings program. "It's important to understand exactly how much it will cost you if you tap into that money early," he noted.

To find the best bank certificate of deposit rates, the Internet is a great place to start, using sites like Bankrate and MyBankTracker, which compare bank certificate of deposit rates from around the country. In addition, you can use the "compare" tab on our website to see how Ally Bank certificate of deposit rates compare to some of our competitors' rates.

In addition, our CDs offer four advantages:

  • With our Ten Day Best Rate Guarantee, you get the option of a higher rate. Most banks offer only one - the one you get the day you fund your CD.
  • We grow your money faster by compounding interest daily. Many others compound monthly, quarterly or even annually.
  • We don't require a minimum deposit to open a CD. Many banks do, but we offer the same great rates to everyone.
  • Our rates are among the most competitive in the country.
  • Our 2-year and 4-year Raise Your Rate CDs allow you to take advantage of rising interest rates. Start with a great rate, plus if our rates on these CDs rise, you'll have the option to increase your rate once over the 2-year term or twice over the 4-year term.

See the latest Ally Bank certificate of deposit rates and open an account online at Allybank.com or call live customer care at 877-247-ALLY (2559), where help is available anytime, 24/7.

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