What Are Bank CD Rates?

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Saving money is something that most people find extremely hard to do. Even with a savings account, you can have access to your money anywhere and anytime, thanks to the 3.37 x 2.12 inch ATM/debit card in your wallet. For many people, this means that money is spent just as quickly as it is earned. While some people may curse technology, or opt for no debit or credit cards at all, there are other solutions.

What is a CD?

As monetary institutions, banks normally offer different percentage rates of interest on money that you eventually manage to save with them. A CD (Certificate of deposit), allows bank customers to deposit a certain amount of money and receive a fixed annual rate of interest. This is different from ordinary savings accounts because it offers a higher rate of interest. Interest is paid at a set time throughout the year. This is a great way to save, as deposits are fixed and money is not withdrawn until the fixed time has elapsed. Banks can give this higher interest rate since they have greater certainty that your money is available to them.

CD rates vary according to the length of time till maturity and the global financial environment. Once you have decided on a bank, consider investing money in a CD.

What are some CD bank rates?

Interest rates may vary between 1.2 percent to 0.25 percent. Some banks with great interest rates include Discover bank, which offers an interest rate of 1.2 percent with a minimum deposit of $2,500 and Sallie Mae, which offers 1.2 percent with no minimum balance. A bank may offer a lower interest rate such as 0.560 percent with a $10,000 minimum balance. Of course, it is in your best interest to shop around to get the highest rate for your buck. Consider if it is it really worth saving with your current bank, or if your money could work much harder for you in another bank.

Once your CD matures, or the time frame has elapsed, you can either choose to reinvest your money or withdraw it. Keep in mind there is usually a time frame (normally 14 days) to withdraw before it gets automatically reinvested into another CD. Though you cannot withdraw money from your CD, you can withdraw the interest that it accrues. If possible, it is wise to reinvest that money into your CD.

Receive a fixed annual rate of interest