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8 simple tips for scoring the best CD rates right now

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Don't settle for a low APY on your savings; look for a top-rate CD instead. Getty Images

In today's inflationary environment, finding a safe and reliable way to grow your savings is a crucial part of your financial plan. After all, the value of the dollar is down and the costs of just about everything from gas to groceries are up, so to make the most of your money, you'll want to make sure your savings are working for you. 

And, you have a couple of good ways to do that. One is opening a high-yield savings account, which offers the same features as a regular savings account — but with a much higher APY on your money. Right now, it's easy to find high-yield savings accounts offering rates of 5% or higher. Compared to the average savings account rate of 0.46%, that's huge. 

Certificates of deposit (CDs) are another good — and popular — choice right now, especially for risk-averse investors looking for a steady return on their money. But to make the most of your investment, it's essential to secure the best CD rates available, and there are a few ways you can do that.

Start exploring your top savings options here and earn more interest.

8 simple tips for scoring the best CD rates right now

There are a few ways to maximize your chances of getting the best rate on a CD right now, including:

Compare offers from multiple institutions

One of the most fundamental steps in securing the best CD rates is to shop around and compare offers from different financial institutions. Don't limit yourself to just your local bank. Explore online banks, credit unions and traditional brick-and-mortar institutions. Each may have unique CD offerings, so it's essential to cast a wide net to find the best deal.

Find out more about the rates you could earn on your savings here.

Consider online banks

Online banks often offer higher CD rates compared to traditional banks. These types of financial institutions tend to have lower overhead costs, which can translate into better rates for customers. Don't be afraid to trust online banks, either; they are typically FDIC-insured, just like their brick-and-mortar counterparts.

Assess the term length

CDs come in various term lengths, ranging from a few months to several years. Historically, the longer the term, the higher the interest rate you typically receive. However, that isn't necessarily the case right now, as the recent rate hikes by the Fed mean that many short-term CDs are offering rates that are comparable or even higher than what you can get with a long-term CD.

However, be sure to consider your financial goals and needs before locking your money into a long-term CD. If you anticipate needing access to your funds in the near future, it's better to opt for a shorter-term CD.

Take advantage of promotional and bump-up CDs

Some financial institutions offer promotional or bump-up CDs, which can provide you with better rates than standard CDs. Promotional CDs might have special terms for new customers, while bump-up CDs allow you to increase your interest rate during the CD's term if rates rise. These can be excellent options for maximizing your returns.

Ask about rate matching

In some cases, you may be able to negotiate with your current bank to match or beat a competitive CD rate you found at another institution. Banks want to retain your business, so it's worth inquiring about rate matching when the opportunity arises.

Check for member and loyalty discounts

If you're a member of a credit union or have a long-standing relationship with a bank, you may be eligible for special discounts or loyalty rewards. These can include higher CD rates, so be sure to ask about any perks you might qualify for.

Be aware of early withdrawal penalties

Before finalizing your CD investment, understand the early withdrawal penalties associated with it. While CDs are known for their low-risk nature, withdrawing your funds before the maturity date can result in penalties that eat into your earnings. 

So, if you open a CD with a top rate but can't commit to the term, you're not actually getting the best returns possible on your money. It's better to align your CD term with your financial needs and goals to ensure your savings are working for you.

Diversify your CD portfolio

If you have a substantial amount of money to invest, consider diversifying your CD portfolio. Instead of putting all your funds into a single CD, you can spread your investment across multiple CDs with different term lengths. This strategy allows you to take advantage of various interest rates and access some of your money periodically if needed.

The bottom line

Securing the best CD rates right now may require a bit of research and strategy, but it can significantly benefit your financial future. By comparing offers from various institutions, considering online banks and assessing term lengths, you can ensure your money works harder for you. Don't forget to ask about promotional and bump-up CDs, and explore the possibility of rate matching or loyalty discounts. Ultimately, the key is to be well-informed and make your CD investments align with your financial goals.

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