When you compare bank certificate of deposit (CD) rates, you want to be sure not to overlook anything. In addition to interest rates, be sure to take into consideration other key items, like fees, terms and cash flow.
Avoid broker fees.
Brokers traditionally charge a fee to do rate shopping, research and renewals for you. However, the Internet makes it simple to compare bank CD rates and terms yourself, allowing you to find the right CD without paying for advice.
Understand early withdrawal penalties.
Be sure you understand exactly how much an early withdrawal will cost you. There's no limit on how much a bank can charge you, so you want to be clear about the terms of the account before you make a deposit. You can avoid a withdrawal penalty altogether with an Ally Bank No Penalty CD, which allows you to withdraw all your money, including interest earned, without any penalty, any time after the first 6 days following the date you fund your CD.
Find the term that suits your needs.
Term matters, especially if you are on a limited income and rely on cash flow from your savings. When you compare bank CD rates, you'll find longer-term CDs typically pay higher interest rates. However, the downside might be the early withdrawal penalty that applies if you need your money before the end of the term.
Consider building a CD ladder.
Is cash flow your biggest concern? You can help create a steady stream of cash flow by laddering your CDs—staggering the maturity dates of several CDs so money is available to you on a regular schedule. A CD ladder calculator can help you create a CD portfolio designed to help meet your cash flow needs.
Ally Bank offers CDs in a wide range of terms to help you reach your savings goals. There's no minimum deposit to open and all of our CDs are backed by the Ally Bank Ten Day Best Rate Guarantee. 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 managing your CDs as simple as possible. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.