Which CD term is best right now? Here are 4 to consider.
Summary
Certificates of deposit (CDs) offer fixed interest rates that are higher than regular savings accounts and are insured by the FDIC up to $250,000. Currently, four CD options stand out with varying terms from six months to five years, providing savers with different choices depending on how long they want to lock in their money.Key Facts
- CDs pay fixed interest rates that do not change, even if the market changes.
- FDIC insurance protects deposits up to $250,000 in CD accounts.
- A 1-year CD currently offers about 4.11% interest.
- A 6-month CD offers a similar interest rate at about 4.10%.
- Longer-term CDs, like 2-year and 5-year accounts, offer slightly higher rates of about 4.16% and 4.20%, respectively.
- Early withdrawal from a CD usually results in a fee.
- Longer terms generally mean more interest earned but less flexibility.
- Savers should compare rates and terms carefully before choosing a CD.
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