The Top 5 High-Interest CD Rates Compared

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Certificates of deposit or CDs are a great way to park some emergency money. It’s a good way to make your savings grow without having to do much else other than not withdraw it before the date of maturity. All you have to do is deposit your money for a set term – the longer the term, the higher the interest rate. There are, however, differences in rates based on how much you deposit. The following are five high-interest CD rates compared:

Synchrony Bank

Deposit Term Required: 5 years

APY: 2.85 percent

Minimum Opening Deposit for APY: $2,000

Early Withdrawal Penalty: 12 months of simple interest at the current rate

Synchrony Bank offers competitive rates on CDs from three months to 60 months. If the early withdrawal penalty seems too daunting to you, you can opt for other short-term CDs at lowered APY rates. For example, a 1-year CD offers an APY rate of 2.45 percent, which is still fairly commendable for a 12-month bond. You can even use the growth calculator on the bank’s website to calculate how much your money will grow based on the amount you can deposit and the term of your CD.

You can even withdraw the interest during the current term of the CD at any time, without any penalty. The bank allows you to add to your CD, if you wish to, until the 10 day grace period from the day your CD has matured. Beyond that period, you will have to wait for your CD to mature. The bank is also a member of the FDIC so your money is insured up to $250,000 per ownership category. You can also access your CD through the mobile banking app.

Ally

Deposit Term Required: 5 years

APY: 2.90 percent

Minimum Opening Deposit for APY: $5,000

Early Withdrawal Penalty: 150 days of interest for CDs purchased or renewed after 12/7/2013

Ally offers high-yield CDs ate a competitive APY rate of 2.90 percent. If you want an APY rate of 3 percent, the minimum balance is $25,000. With Ally, you can enjoy mobile and online banking. The bank is also a member of FDIC so your money is insured. While there is no fixed minimum opening deposit, there are higher APY rates for a higher opening deposit. For example, you can open a 5-year-term CD with $4,000 and get an APY rate of 2.75 percent. But if you open it with $1,000 more, the rate goes up to 2.90 percent.

While you cannot make changes to your CD until the day of maturity, you can schedule a transfer up to one year before the date of maturity. The transfer usually happens on the date of maturity. Once your CD matures, you have a 10-day grace period to either transfer funds or make changes to your CD. The bank charges no fees for opening or maintaining a CD.

Capital One

Deposit Term Required: 5 years

APY: 3.00 percent

Minimum Opening Deposit for APY: $0

Early Withdrawal Penalty: Six months of interest

Capital One online CDs offer one of the highest rates in the market. You can choose several terms based on how early you may want to make a withdrawal. The bank offers CD term options from six months to five years. So if you feel you don’t want to commit to a five-year term, you can always go for a shorter term for a lesser APY rate. The APY rate for a six-month term is 0.60 percent. The CD product rates are fixed upon opening of the account.

While you cannot make changes to your CD account during the term, there is a 10-day grace period after your CD has matured for you to make additions, transfer funds or manage the terms of your CD.

Marcus by Goldman Sachs

Deposit Term Required: 5 years

APY: 3.00 percent

Minimum Opening Deposit for APY: $500

Early Withdrawal Penalty: 270 days of interest

Marcus, unlike the other banks mentioned in this list, offers a 30 day grace period from the day of the account opening, to add funds to your CD. Once that period is over, however, you can no longer make changes until the date of maturity. You can also withdraw interest from your CD account without any penalty. If you think five years is too long a commitment for you to make, you can choose shorter terms. The terms start from six months and go up to six years. The APY rate, of course, increases if you choose a longer term. The minimum balance of $500, however, remains standard across all terms.

Citizens Access

Deposit Term Required: 5 years

APY: 3.10 percent

Minimum Opening Deposit for APY: $5,000

Early Withdrawal Penalty: 180 days of interest on the amount withdrawn

Citizens Access offers online accounts which you can access 24/7 through your mobile application. You can fund your online CD through online fund transfers or by depositing a cheque. Being a digital bank, with no physical branches to maintain, Citizens Access can offer much higher rates than its competitors. You can receive interest from your online CD by crediting the interest payment to your CD principal or by transferring it to another account. The interest is calculated on the basis of daily balance. It is compounded daily and paid monthly.

On the maturity date, your CD will automatically be renewed unless the bank has received prior notification from you to do otherwise. There is also a 10-day grace period from the day of maturity for you to deliver new instructions to the bank. The bank also does not offer partial withdrawals. If you want to terminate the CD before its date of maturity, you will have to withdraw the entire amount and be subject to an early withdrawal penalty. The balance can be invested in a new CD.

Final Thoughts

Finally, these were five CD plans from different banks that offer some of the highest interest rates. At each of these banks, you can opt for a CD ladder plan, that is, open multiple CDs of different terms at the same time. This way you can keep compounding interest in different accounts and also make withdrawals without worrying about choosing a longer term for higher APY rates.

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