Simply put, they are deposit accounts to earn a fixed interest rate over your chosen term length.

Unlike a checking or savings account, you cannot access your money without penalty until the CD term is over.

You will find that CDs interest rates are always higher than traditional Checking and Savings accounts.

CDs rates are fixed for terms as long as 60 months and cannot be changed unlike Savings or Checking account rates.

Up to $250,000 per account (FDIC insured for banks and NCUA insured for credit unions)

CDs are low maintenance with the only requirement is to keep your money in your account until your CD matures while earning interest.

Make sure to set up a calendar reminder once the CD term matures, otherwise  most banks will automatically renew the CD at the end of the term.

Obviously you don’t have access to your money before your term ends unless you want to incur penalty fees.

Make sure to put away money in a CD that you know you can afford.

Many people don’t want to commit long term to a CD, but still want to earn a higher interest rate. There is a tactic you can employ with CDs called “CD Laddering” which involves setting up multiple CDs with differing term lengths.

E.G $10K investment into 5 different CD length: Instead of putting the entire $10,000 into one 5-year CD, you put $2,000 into 5 different CDs (i.e. 1,2,3,4,5-year CDs).

With each CD expiring with every passing year, you can decide to either withdraw the money or re-invest it into another CD. You are essentially earning money on a higher interest if you decided to use this route.

You can visit your local traditional brick-and-mortar bank to open a CD account, but they cannot compete with the online banks since they have overhead costs.

Rule of thumb when finding the best rate is Online Banks > Credit Unions > Regional Banks > National Banks.

You will find all the best online CD rates below and I highly suggest you go with online banks for all your CDs needs.

Online CD accounts have the best rates by far. It’s a wise move to get the highest rate for your investments.

Since they operate online, all online banks CD accounts are available to everyone nationwide. They can keep the cost down with no branches overhead in order to provide the most competitive rates!

Steps for the best rates for Online CD Accounts: You want to figure out what the minimum balance requirement for the term you want to earn the listed Annual Percentage Yield (APY).

Then choose your CD term you are comfortable leaving your money for the entire length of the CD term is earn the interest higher rate. Your is tied up for the entire CD term so make sure not to withdraw the due date, otherwise you will incur an early withdrawal penalty fee.