Many people find that certificates of deposit, or CDs, can be a good way to reach their financial goals. CDs are generally considered low-risk places to park your money, and they usually earn interest at higher rate than savings accounts.Before opening a CD, it's a good idea to compare CD rates. After all, the higher a CD's rate, the more money you can expect to earn on your deposit. But just because one CD has a higher rate than another doesn't necessarily mean it's the right choice for you. There are a number of factors to consider before you make that deposit.

Consider your timing.
One of the most important questions to ask yourself before opening a CD is how long you plan to keep your money in the account. Most CDs have fixed terms, meaning you can't withdraw money from the CD until it matures without paying a penalty. CDs mature depending on the length of the CD's term. For example, a CD with a one-year term will mature after one year. A CD with a five-year term will mature after five years.

When you compare CD rates, you'll notice that typically the longer a CD's term, the higher its interest rate. Therefore, if you know that you won't need access to your money for a few years, you might be more comfortable putting it in a longer-term CD with a higher rate. On the other hand, if you expect to need access to your money earlier, you might look for a CD with a shorter-term and lower rate.

Consider safety.
One reason CDs can be a good option for saving money is that they are generally considered low-risk. With most CDs, you get a fixed interest rate for the life of the CD. This can help to provide stability during uncertain times and give you the peace of mind of knowing just what your earnings will be. It's important, however, to make sure that the financial institution offering a CD is FDIC-insured. CDs offered by FDIC-member banks are insured by the Federal Deposit Insurance Corporation up to the maximum amount allowed by law.

Consider flexibility.
With most CDs, you get a fixed rate for a specific amount of time. But what if you're not sure how long you want to keep your money in the CD? Or what if you compare CD rates later and find that they've increased after you've already gotten a fixed rate? If you're looking for more flexibility, you might want to check out a CD that let you withdraw money before the maturity date without a penalty, or a CD that lets your raise your rate if rates go up.

At Ally Bank, we offer CDs for both situations:

  • The Ally Bank No Penalty CD allows you to withdraw all your money, including interest earned, without penalty, any time after the first six days following the date you fund your account.
  • With Ally Bank Raise Your Rate CDs, you have the option of a one-time rate increase if our Ally Bank 2-Year CD rate goes up; you have the option to increase your rate twice (two times) if our Ally Bank 4-Year CD rate goes up.

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 or call live, 24/7 customer care at 877-247-ALLY (2559) today.

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