Best certificates of deposit for first-time investors

Tuesday, February 26th, 2013 By

Dollar Sign in Space - Illustration

Which certificates of deposit offer the best return? (Photo Credit: CC BY/DonkeyHotey/Flickr)

Even though high yield isn’t very high anymore, you’ll still want the best rate of return available when you invest in a certificate of deposit. Your high-yield CD should also have an optimum load of features, from the right length of term and minimum deposit to most frequent interest compounding and other benefits like rate bumping and no withdrawal penalty. The following banks offer some of the best certificates of deposit when judged by these criteria.

Best certificates of deposit No. 1 – Ally Bank

Voted best online bank by MONEY Magazine in Oct. 2012, Ally has a one-year CD with an annual percentage yield (APY) of 0.94 percent, compounded at the optimal daily rate. No minimum is required to open the account, and automatic renewal can be set for when the CD reaches maturity. A CD with 5-year maturity nets 1.59 percent APY, compounded daily.

Best certificates of deposit No. 2 – Nationwide Bank

Nationwide does more than insurance. Its banking arm sells very competitive CD products that are compounded daily, such as a 12-month, no minimum deposit CD with a 1 percent APY. Its 5-year CD beats the national average at 1.80 APY on deposits up to $9,999.00. A jumbo CD of $100,000 or more offers even better rates.

Best certificates of deposit No. 3 – OneWest Bank, FSB

OneWest gets top ratings for both its CD rates and customer service. With a $1,000 minimum opening deposit on a 1-year CD at 1 percent APY, OneWest is a popular choice. Its 5-year CD features a 1.60 percent APY, and both CDs are compounded daily.

Best certificates of deposit No. 4 – Bank of Internet USA

While not quite as well known as the other banks on this list, Bank of Internet USA has highly competitive rates due to low overhead. Its 1-year certificate of deposit has 0.80 percent APY with a $1,000 minimum opening. If you can wait for five years before your CD matures, then the APY blossoms into an attractive 1.60 APY. In both cases, interest is compounded daily for maximum return.

Best certificates of deposit No. 5 – EverBank

EverBank’s daily compounded certificates of deposit carry no maintenance fees, but the opening minimum deposit is a bit higher than some at $1,500. The 1-year CD features 0.81 APY, while the 60-month (5-year) CD has 1.65 APY. Not only are EverBank’s rates competitive, but its rankings among its peers for customer service are among the best in the business.

Sources

Bankaholic

Bankrate

WiseBread

Comments are closed.

Previous Article

« Consumer price index shows slowing inflation

The U.S. Department of Labor’s recent consumer price index report was flat in January for the second month in a row. It is the most recent indication that inflation is leveling off in the United States. Consumer price index slows from last year On Thursday, Feb. 21, the Labor Department said that the [...] Gas prices are creeping up again, after being on the decline.
Next Article

Gay couples reap benefit of second parent adoption credit »

Legally-married same-sex couples enjoy the same tax benefits as traditional married couples, but only as they relate to the income tax levied by their states. Not so when it comes to federal income tax. However, in a bizarre twist of the tax code, that very exclusion may actually give them [...] Married gay couples have one advantage with the IRS that others do not. Image