When you're shopping for the best interest rates—certificate of deposit (CD) rates specifically—it's only natural to want the most competitive rate you can find. We interviewed Chris Zeches, a Certified Financial Planner(R) with Zeches Financial Services in Phoenix, Ariz., for his tips on using CDs as part of a sound financial strategy. To land the highest interest rates for CDs, he said, "it's important to shop around. Start online. Online banks can offer higher rates, since they don't have the overhead of physical banks."

Bank interest rates on things like CDs or savings accounts may be lower compared to what you might get with a riskier investment product. But Zeches is quick to point out the security that Federal Deposit Insurance Corporation (FDIC)-member bank CDs provide because your deposits are insured by the FDIC up to the maximum allowed by law.

Optimizing your return may require a little strategizing that involves more than just looking for the best bank rates for CDs. For example, said Zeches, it might make sense to construct what is known as a CD "ladder"—opening CDs of varying terms—so that CDs are maturing regularly. "CD ladders add to your overall flexibility," he notes. "Because your money is constantly maturing, you can take advantage of changing rates."

And if you include 2- and 4-year Ally Bank Raise Your Rate CDs as part of your CD ladder, you could be in an even better position to benefit should our rates on these CDs rise. You have the option of a one-time rate increase if our Ally 2-Year CD rate goes up; you have the option to increase your rate twice (two times) if our Ally 4-Year CD rate goes up.

Another idea from Zeches: If you've already achieved the important goal of having six-months' worth of living expenses in savings, it might make sense to put another three months into a CD. "Just make sure you understand exactly what the penalties might be for cashing in a CD early," Zeches said. "The biggest mistake CD investors make is failing to read the fine print. Penalties can be extreme and might take away all the interest, making the whole thing a wash."

If you choose the Ally Bank No Penalty CD, you can get a fixed rate CD that allows you to withdraw all your money without a penalty, any time after the first six days following the date you funded your account. Plus, keep the interest earned.

Ally Bank offers some of the most competitive rates in the country, and you can open and fund an account with any amount. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).

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