5 CD Types to Consider Now

As interest rates rise throughout the economy, Certificate of Deposit (CD)Especially, having a moment.

High interest rates have translated into great savings rates on many account types — including High Yield Savings Account — but CDs now offer something to savers Highest rate available. In fact, some CDs can help you earn More than 5% APY on your savings balance.

In general, CD interest comes at the cost of locking your money in the account for an agreed term — or risking losing your interest earnings. But not every CD account is the same. They can vary significantly in terms of rates, fees, minimums and time commitments.

Whether your priority is scoring the highest savings rate possible, or you’re looking to get a great APY while still maintaining some flexibility, there are several. CD types are worth considering right now

Find out how much you can grow your savings with a top CD right here.

5 CD Types to Consider Now

These are five CD types that should be on every saver’s radar today.

Short term high yield CDs

If you are looking Best savings rate At the moment, with high yield CD Short term length Best option. Also, short terms leave some flexibility to take advantage of higher rates in the future.

They generally work like traditional CDs, where you lock your deposit in the bank and incur penalty fees for early withdrawals. At the end of the CD tenure, you will receive your entire deposit and the interest you have earned in full. High-yield CDs, unlike traditional CDs, are usually offered by Online Bank (eg high-yield savings accounts). And for today’s best rates, look for terms of one year or less.

Here are some of the best short-term CDs with high yields today:

• Bread Savings 1 Year CD: 5.20% APY
• Synchony Bank 6 Month CD: 5.00% APY
• CIT Bank 6-month CD: 5.00% APY

Compare more of the best CD rates now to get the most out of your savings

Long-term high yield CDs

Although you’ll get the best CD rates from short-term CDs right now, there are still advantages Long term CD Today, too. Historically, long-term CD savers have offered the best API; After all, you are locking your money in the bank for a long time. But today, the rates on these accounts are more similar High yield savings.

The advantages of long-term CDs right now are that they can help you save today’s higher rates for five years or more. You can lock in more than 4% with a long-term CD now and earn that amount for years to come — without worrying about variable interest if rates drop.

The highest rates on long-term CDs right now are:

• Popular Straight 5-Year CD: 4.50% APY
• Bread Savings 5-year CD: 4.25% APY
• Ally Bank 5-Year CD: 4.10% APY

No-penalty CD

No-penalty CD is among the most flexible CD types. Although you’ll still lock in a fixed interest rate and agree to a term length when you make your deposit, you won’t pay a penalty for withdrawing your money early. After the initial waiting period (about a week), you can withdraw your total balance along with the interest earned so far without penalty.

These types of CDs may not be the highest income options right now, although they still are Competitive rates, and the term length is usually around one year. But the real advantage is the option to withdraw your money in favor of a higher-income account if rates rise before your term ends.

Here are some of the top no-penalty CD rates today:

• CIT Bank 11 Month No-Penalty CD: 4.90% APY
• Ally Bank 11-Month No-Penalty CD: 4.25% APY
• Marcus 13-Month No-Penalty CD: 4.25% APY

Bump-up or step-up CDs

Bump-up and step-up CDs are good options in a rising-rate environment because they allow you some movement in the rate you earn over the life of your account.

With bump-up CDs, you can request a higher rate if your bank offers APY over the life of your account. You can be limited to one request, or receive multiple throughout your CD term. Step-up CDs are similar, but you don’t need to request an extension. Typically, your bank automatically raises your rate at various intervals throughout the term of your CD. Other than rate changes, these types of CDs generally have the same limitations as other CDs.

These are some competitive bump-up or step-up CDs:

• TIAA Bank 3.5 Year Bump Rate CD: 4.10% APY
• Synchrony Bank 24-Month Bump-Up CD: 3.70% APY

Brokerage CD

Brokered CDs work much like high-yield CDs, but they are offered through a brokerage firm instead of a bank. Often, these CDs are issued by banks to brokerage customers — so they can still be insured up to the limit by the FDIC. Your brokerage should clearly state whether CDs are FDIC-insured online or in your account terms.

A big difference with brokered CDs compared to bank CDs is that you can trade them in the secondary market, just like you do other investments. However, your interest rate is only guaranteed if you hold your CD to maturity. If you decide to sell, you can take a potential loss.

Here are some examples of brokered CDs:

• Vanguard 4-6 Month CD: 5.30% APY
• Vanguard 13-18 Month CD: 5.50% APY
• Fidelity 13-month CD: 5.35% APY

Maximize your savings balance by comparing more top CD rates available now.

Bottom line

Certificates of Deposit are one of the best ways you can start earning more on your savings balance today Although CDs are generally a bit stricter than savings accounts — thanks to required minimum deposits, early withdrawal penalties and fixed interest rates — they can make a lot of sense during the Federal Reserve. The next rate move is unclear. Plus, with these accounts already having rates of 5% APY or higher today, it can make sense to lock in a competitive rate that you can benefit from in the long run. Just make sure the CD type you choose matches your financial goals before you sign up.

Start your search here with today’s best CD accounts and start making more money!