We all know saving money is a smart move, and while a traditional savings account can be a great first step, what's next? When you're ready to really grow your money over time, you may need an account that does more than just keep your funds in a safe place. That's when a certificate of deposit (CD) can be a reliable, beneficial option.

What Is a CD? A CD is a time deposit. When you open a CD, you agree that you will not withdraw the funds until the maturity date, which varies from a few months to several years after you open the account, depending on the term you choose. Once your CD matures, you can either roll the funds into a new CD with different terms and rates, or do nothing and the CD will renew at the same term and whatever rate is offered at that time.

What Kind of Return Can I Expect From a CD? The return you'll receive on your CD will vary, depending on factors such as term length, market conditions and frequency of compounding interest.

Term Length: CD term lengths vary, usually anywhere from three months to five years. Generally, the longer the term of the CD is, the higher the interest rate.

Current Market Conditions: Banks compete for your business while balancing their need for capital against what it costs for them to gain customers. Generally, online banks like Ally Bank have lower operating costs and can offer more competitive interest rates than their brick-and-mortar counterparts.

Frequency of Compounding Interest: The more frequently your CD's interest is compounded, the faster your balance will grow. At Ally Bank, interest is compounded daily.

What Types of CDs Are Available? Several types of CDs are available at different financial institutions. At Ally Bank, you'll find a range of CD products to suit your specific goals:

  • High Yield CD–A CD with our fixed rate for a fixed term.
  • No Penalty CD–A CD that 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.
  • Raise Your Rate CDs–With these CDs, 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.

Like all member banks, your deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum allowed by law. You can open and fund a CD with any amount, and the Ally Bank Ten Day Best Rate Guarantee for CDs gives you the best rate we offer for your CD term during the ten days starting with your CD open date, provided you fund your CD within that time.

Learn more by visiting Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.

Ally Bank, Member FDIC

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