If you've done any research on certificates of deposit (CDs), you've probably come across a variety of interest rates for CDs. But what do these rates mean? And how can they help you make the most of your savings?
The advertised bank rates for CDs tell you the Annual Percentage Yield (APY) at which your money will earn interest. APY measures the rate of return on your deposit over a year taking into account compounding interest. The higher the APY, the more interest you will earn.
While APY is important to consider, it’s not the only factor you’ll want to think about as you compare CDs. Other things to consider include CD terms and potential early withdrawal penalties. Short-term accounts, such as three-, six- and 12-month CDs, usually offer lower interest rates than those with longer terms, such as two-, three-, and five-year CDs. Most CDs charge an early withdrawal penalty if you withdraw your funds before the CD matures. With Ally Bank’s No Penalty CD, you can withdraw all your money, including interest earned, without penalty, any time after the first six days following the date you fund your CD.
Ally Bank offers a range of CDs with competitive rates that can be opened and funded with any amount. Your deposits in Ally Bank are insured by the Federal Deposit Insurance Corporation (FDIC) to the maximum amount allowed by law. To learn more visit Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, Member FDIC