A certificate of deposit (CD) is a low-risk way to grow your money. You may want to shop around and compare CD products at a variety of banks in order to find CDs that work for you. Online banks like Ally Bank can be a good place to start because they usually can offer better rates than their brick-and-mortar counterparts.
Finding the best possible rate is important, but you should also consider other terms and conditions, such as minimum deposit requirements, restrictions and fees. Also, make sure your deposit is insured by the Federal Deposit Insurance Corporation (FDIC). At Ally Bank, you can open and fund your account with any amount and deposits are always insured by the FDIC up to the maximum allowed by law.
It's also smart to consider term lengths as you compare CDs. Generally, the longer the term on the CD, the better interest rate you will receive. You can close a CD before the term ends, but you typically will pay an early withdrawal penalty for doing so. The Ally Bank No Penalty CD, however, allows you to withdraw all your money, including interest earned, without any penalty, any time after the first six days following the date you fund your account.
For a savings strategy with both short- and long-term benefits, you may want to consider setting up a CD ladder. A CD ladder is a system that diversifies your money across CDs with varying maturity dates. For example, you might put 20 percent of your funds in five different CDs, each of which would have a different term length. If you chose CDs with term lengths of 12 months, two years, three years, four years and five years, for example, once the 12-month CD matured, you could then renew it in a new five-year CD. Following this process every year would result in a CD maturing every year, allowing you to take advantage of potentially higher long-term rates.
With rates that are consistently among the most competitive in the country, Ally Bank CDs can be opened and funded with any amount. Take a look at the great benefits they have to offer, and start building your strong savings foundation today. To learn more visit AllyBank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, Member FDIC