When it comes to researching certificate of deposit (CD) rates, the highest rate can often be the most appealing. But before you put your money in a CD simply because it has the highest rate, it might be smart to consider your savings goals and exactly what product will get you there.
Great CD rates: highest yield, but what's the catch?
Carefully choosing your CD term is an important part of opening a CD account, but so is knowing what the early withdrawal penalty is—even when you don't anticipate needing access to your money before maturity. Often, CDs with the highest interest rates are also the ones with the longest terms. That means you have to go longer without accessing those funds. That may or may not fit in with your savings plan. Another thing to check out is the minimum opening deposit requirement. At Ally Bank, there's no minimum deposit to open any account, but at some banks there is.
What's better with CD rates—highest yield, or shortest term?
Whether you choose the highest yield or the maximum flexibility depends on your savings goals. When you reach short-term goals sooner—consistently having enough to pay your property taxes in 11 months instead of 12, for example—the resulting cumulative time savings might give you an opportunity to accelerate your efforts toward reaching a longer-term goal like funding your retirement.
With Ally Bank CDs, some of our shorter-term accounts actually earn better yields than some banks' longer-term CDs, according to interest rates published by Bankrate.com. You can open and fund any account with any amount and we compound interest daily to maximize your earnings. Whether you're interested in our High Yield CD, No Penalty CD or Raise Your Rate CD, you'll get rates that are among the most competitive in the country and customer service that makes banking as simple as possible. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.