Why You Want Highest CD Interest Rates?

Answer 1

A certificate of deposit (CD) is a great place to stash money for the long term. They are usually higher interest earning vehicles than a regular savings account, which makes them ideal. There are also some tax breaks associated with them that you normally would not get with a conventional savings account. Finding the highest CD interest rates does require some shopping around.

What Are Interest Rates

When you discuss interest rates, it can point to either what is being paid by you or what you are earning. In the case of CD’s and interest rates, it is the money that you are earning.

Why does the bank or other financial institution pay you interest? A bank or another type of financial institution will pay you interest on your money, because while your deposit sits with them, the bank or financial institution is actually using your money. They take your money and lend it to other people and use it for their day-to-day expenses. Many people are very surprised to hear that the bank is actually using their money, and that it is not tucked away nicely.

The interest rate that you collect on your CD is granted because the bank uses the money to lend to other people that also bank with them. Finding higher CD interest rates seems like a good business practice, since all banks and financial institutions have the same practices in place. They lend your money out, why not collect the highest interest rate that you can?

Banks tend to use a little deception when it comes to offering interest rates on money that is deposited with them. They make it seem like they are doing you a favor by giving you free money, but if you borrow money from a bank paying the interest on that money seems like you owe it to them. It works both ways, you deposit money into a CD, the bank uses that money so the interest that is paid to you is actually owed to you.

Some banks are much more generous with the amount of interest they will pay on a CD. That is the bank that you should put your money with.

Finding the Bank with the Highest CD Interest Rates

Research is the best way to find the highest CD interest rates. Call banks and other financial institutions that offer this product and simply ask them what rates they offer. You will be surprised once you do the math how much even half a percentage rate can add up over time.

It’s your money. Do the research and evaluate the results carefully, so you can make the most of it!