Latest news with #CD
Forbes
39 minutes ago
- Business
- Forbes
Discover To Increase CD Rates For A Limited Time: How You Can Take Advantage
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. If you have a purchase looming on the horizon, it's time to take advantage of a hot new offer from Discover. The bank has announced a limited-time interest rate increase on its six-month certificate of deposit (CD) accounts, allowing customers to earn 4.20% annual percentage yield (APY). Discover has announced an increase in interest rate on its six-month CD account, raising it from 3.70% to 4.20% for a limited time. While the exact end date of the offer is unknown, consumers would be smart to take advantage of the offer before it ends. Discover CDs are more flexible than most, requiring no minimum deposit to open an account. Interest also compounds daily and gets added to the account monthly. In comparison, some of the best CDs on the market require minimums of hundreds to thousands of dollars to lock in a favorable rate. That said, the more money you put in, the more interest you'll earn. Six months is a short-term commitment, so to get the most bang for your buck, we'd frontload the account with as much as your budget allows. Remember that there are penalties for touching the funds before your CD matures; Discover charges three months' simple interest for early CD withdrawals with terms of less than a year. A CD is a savings account that allows consumers to earn interest at a fixed rate over a predetermined period. The tradeoff is that users have limited access to their funds, unlike most savings accounts where withdrawals are easy and do not incur a penalty. CDs are lucrative for those saving for a big-ticket purchase, like a home or a car, or those with disposable funds they'd like to grow. When choosing a CD , note its compounding schedule, which is the key to your profit. Some CDs compound interest daily, while others compound monthly. The more frequent the interest compounds, the more you stand to earn. Consumers may opt for a CD over a high-yield savings account if they do not require access to their funds for a foreseeable period. While both accounts typically offer higher interest rates than traditional savings accounts, high-yield accounts come with interest rates that fluctuate based on market conditions and the Federal Reserve's benchmark rate. CDs, however, lock in an interest rate over a fixed term, which can guarantee a higher return when saving for a goal with a specific timeline. High-yield savings accounts are better used for building an emergency fund or saving toward goals without a fixed deadline. Some banks may offer more lenient or stringent terms if you anticipate emergency withdrawals, but we'd advise opening a CD only if you're sure the funds can stay put and grow. When picking a CD, make sure it is federally insured. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, bank and ownership category, while the National Credit Union Administration (NCUA) insures individual accounts at credit unions for up to $250,000. When you invest in a CD, how much you earn depends on how much you deposit upfront, since you typically can't add more money during the term. If you have a long-term savings goal and want to earn a specific amount of interest from a CD, use Forbes Advisor's CD calculator to run the numbers in advance. It will help you estimate how much you'll receive when the CD matures. For example, if you deposit $10,000 into a six-month CD with a 4.00% APY compounded monthly, you'll earn $198.04 in interest by the end of the term. Now say you deposit $20,000 into a CD with the same terms. You'd earn $396.08, or double the interest thanks to double the deposit. No matter how much you choose to invest, make sure it's an amount you can afford to set aside for the entire term. Many banks charge penalties for early withdrawals, and the goal is to earn interest, not lose money from your deposit. Read more: 10 Best CD Rates Of July 2025: Up To 4.50% APY
CBS News
a day ago
- Business
- CBS News
Here's what not to do if your CD matures this July, according to experts
Recent years have been a boon for many savers who've enjoyed high rates in certificate of deposit (CD) accounts. In particular, those who opened a CD during the 2023–2024 rate surge likely earned a fixed rate above 5%. Now, however, these CDs are reaching maturity at a time when rates are slightly lower. Those who let their CDs automatically renew could end up earning a lower annual percentage yield (APY). The average one-year CD now earns 2.03% APY, though top offers from online banks and credit unions reach up to 4.40% APY. Fortunately, you have options, and knowing what not to do can help you choose the best one. After all, even the most seasoned CD investors can make mistakes that impact their future earnings and flexibility. Below, we'll explore expert-backed insights into the most costly missteps to avoid if your CD is set to mature this July so you can make informed decisions about what to do next. Start by seeing how much you could be earning with a new, high-rate CD here. If you're wondering about your next steps, post-CD account maturity, it helps to know which mistakes to avoid making. According to the experts we spoke to, it's important to avoid taking the following steps this July: It's tempting to grab the highest rate you can find, especially after a long run of competitive CD yields. But longer terms can be a trap if you're not sure when you'll need the money again. "The most common mistake I see is prioritizing the interest rate without considering the time commitment," says Melissa Estrada, founder of Fidela Wealth in Calabasas, California. "A rate that's a half percent higher may seem attractive, but if it locks up your funds for an extra year and you need that liquidity, it's not a smart move." Ideally, you can time your CDs to mature in line with a savings goal, even if it pays less. For example, if you plan to put a down payment on a home in two years, a 2-year CD with the best available rate could be a smart choice. What you don't want to do is lock your money in a CD term that matures after you need it. Compare current CD rates and terms here to learn more. Letting your CD roll over without reviewing the new terms isn't always in your best financial interest. "One of the biggest mistakes I see savers make with CDs is letting them renew automatically into whatever the bank's newest rate is," says Kyle Newell, a financial planner and owner of Newell Wealth Management in Orlando, Florida. "Oftentimes, banks or credit unions will offer attractive rates to bring money in, then set renewal rates much lower than they originally offered." Newell says savers should always shop around for rates as they change often. Estrada agrees: "I don't usually recommend auto-renew. I'm a believer in reevaluating every financial decision based on the current life circumstances. A lot can change in a year." If you're not paying attention, your CD could renew before you even realize it. Make sure to note the maturity date and check for notices from your bank so you can explore your options beforehand. "Typically, banks will send notice of the CD maturing, but I have seen as short as a 7-day turnaround time," Newell adds. "A mistake too many make as their CDs reach maturity is not using this moment to reassess their financial goals and the best use of those funds," says Alex Beene, a financial literacy instructor at the University of Tennessee at Martin. "This maturity date offers the opportunity to look at other CD rates both within and outside of that institution to see which one is best, as well as considering other options like high-yield savings accounts that could offer similar rates with more lenient withdrawal requirements." Before your CD's maturity date, ask yourself some hard questions about what your next large purchases are and how soon you'll need the funds. These are timely considerations you must make, especially as you decide whether to roll over your funds and lock up your money for another term. Another common mistake to avoid when your CD matures is taking your funds and parking them in a regular savings account. By doing so, you could potentially miss out on better returns. Consider this: As of June 2025, the national average savings account rate is just 0.38%, according to FDIC data. By contrast, the average 12-month CD rate is more than four times that amount, but top-earning CDs and high-yield savings accounts offer APYs in the mid-4% range, more than 11 times higher. "The main drawback is that your money stops working for you," says Estrada. "I'm a strong advocate for high-yield savings accounts. They provide liquidity, typically a two-day transfer time, with no lock-up period, and currently offer around 4% annually, paid monthly. It's a smart way to keep your cash both flexible and productive." CD rates are still substantially higher than those offered by standard savings accounts, but they have ticked down in recent months. So if your account is set to mature this July, take the opportunity to reevaluate your financial goals and strategize your next move. Don't let your CD auto-renew without confirming what the new rate will be as it could be much lower. And while shopping for the best CD rate is ideal, make sure the CD's term ends before you'll need access to your money.
CNET
a day ago
- Business
- CNET
The Best Savings Strategy in an Uncertain Economy Is a Boring One
Stability can be a wonderful thing, especially when it comes to your money. Deagreez/Getty Images We've all had enough economic excitement this year. From tariffs and inflation to layoffs and recession fears, daily headlines are a nonstop barrage of bad news that threatens our financial security. That's one of the reasons I'm all for opening a certificate of deposit right now. CDs aren't as sexy as investments like cryptocurrency or timing the stock market. But that's what makes them perfect in today's precarious economy. Here's why you should consider opening a CD as part of your money strategy. Read more: The Economy Sucks Right Now. Take Your Revenge With This New Money Trend Stability in this economy? Yes, please CDs have long been a go-to option for people who want a safe place to keep their cash. But they're especially valuable when the economy is as rough as it is right now. Your annual percentage yield is fixed when you open a CD, so your earnings stay the same regardless of where interest rates go after that. That means you can predict precisely how much your CD will be worth when the time is up. The Federal Reserve is expected to cut rates this year, so now's the time to lock in an APY up to 4.50%. It can help you maximize your returns and shield your money from stubborn inflation. Plus, CDs are protected by federal deposit insurance if you open one at an FDIC-insured bank or NCUA-insured credit union. That means your money is safe (up to $250,000 per deposit, account category and institution) if the bank fails. Don't overlook high-yield savings accounts CDs are ideal for savings goals with a specific timeline, like buying a car or throwing a wedding. However, you must keep your money in a CD for the full term, or you'll face an early withdrawal penalty that will cut into your total earnings. If you're building an emergency fund, you're better off opening a high-yield savings account. Your APY will be variable, which means it could change at any time, but you'll be able to take out cash whenever you need it, penalty-free. And many top high-yield savings account APYs are on par with today's best CD rates. HYSAs also allow you to add money over time. Wth a CD, most banks require you to have all your funds in hand the moment you open an account.
Yahoo
2 days ago
- Business
- Yahoo
Best CD rates today, July 20, 2025 (lock in up to 5.5% APY)
Find out how much you could earn by locking in a high CD rate today. A certificate of deposit (CD) allows you to lock in a competitive rate on your savings and help your balance grow. However, rates vary widely across financial institutions, so it's important to ensure you're getting the best rate possible when shopping around for a CD. The following is a breakdown of CD rates today and where to find the best offers. Overview of CD rates today Historically, longer-term CDs offered higher interest rates than shorter-term CDs. Generally, this is because banks would pay better rates to encourage savers to keep their money on deposit longer. However, in today's economic climate, the opposite is true. As of July 20, 2025, the highest CD rate is 5.5% APY, offered by Gainbridge® on its 5-year CD. There is a $1000 minimum opening deposit required. This embedded content is not available in your region. How much interest can I earn with a CD? The amount of interest you can earn from a CD depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (CD interest typically compounds daily or monthly). Say you invest $1,000 in a one-year CD with 1.81% APY, and interest compounds monthly. At the end of that year, your balance would grow to $1,018.25 — your initial $1,000 deposit, plus $18.25 in interest. Now let's say you choose a one-year CD that offers 4% APY instead. In this case, your balance would grow to $1,040.74 over the same period, which includes $40.74 in interest. The more you deposit in a CD, the more you stand to earn. If we took our same example of a one-year CD at 4% APY, but deposit $10,000, your total balance when the CD matures would be $10,407.42, meaning you'd earn $407.42 in interest. Read more: What is a good CD rate? Types of CDs When choosing a CD, the interest rate is usually top of mind. However, the rate isn't the only factor you should consider. There are several types of CDs that offer different benefits, though you may need to accept a slightly lower interest rate in exchange for more flexibility. Here's a look at some of the common types of CDs you can consider beyond traditional CDs: Bump-up CD: This type of CD allows you to request a higher interest rate if your bank's rates go up during the account's term. However, you're usually allowed to "bump up" your rate just once. No-penalty CD: Also known as a liquid CD, type of CD gives you the option to withdraw your funds before maturity without paying a penalty. Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more), and often offer higher interest rate in return. In today's CD rate environment, however, the difference between traditional and jumbo CD rates may not be much. Brokered CD: As the name suggests, these CDs are purchased through a brokerage rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and might not be FDIC-insured. This embedded content is not available in your region.
Yahoo
3 days ago
- Business
- Yahoo
Best CD rates today, July 19, 2025 (best account provides 5.5% APY)
Find out how much you could earn by locking in a high CD rate today. The Federal Reserve cut its federal funds rate three times in 2024, so now could be your last chance to lock in a competitive CD rate before rates fall further. CD rates vary widely across financial institutions, so it's important to ensure you're getting the best rate possible when shopping around for a CD. The following is a breakdown of CD rates today and where to find the best offers. Overview of CD rates today Generally, the best CD rates today are offered on shorter terms of around one year or less. Online banks and credit unions, in particular, offer the top CD rates. As of July 19, 2025, the highest CD rate is 5.5% APY, offered by Gainbridge® on its 5-year CD. There is a $1000 minimum opening deposit required. Here is a look at some of the best CD rates available today: This embedded content is not available in your region. How much interest can I earn with a CD? The amount of interest you can earn from a CD depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (CD interest typically compounds daily or monthly). Say you invest $1,000 in a one-year CD with 1.81% APY, and interest compounds monthly. At the end of that year, your balance would grow to $1,018.25 — your initial $1,000 deposit, plus $18.25 in interest. Now let's say you choose a one-year CD that offers 4% APY instead. In this case, your balance would grow to $1,040.74 over the same period, which includes $40.74 in interest. The more you deposit in a CD, the more you stand to earn. If we took our same example of a one-year CD at 4% APY, but deposit $10,000, your total balance when the CD matures would be $10,407.42, meaning you'd earn $407.42 in interest. Read more: What is a good CD rate? Types of CDs When choosing a CD, the interest rate is usually top of mind. However, the rate isn't the only factor you should consider. There are several types of CDs that offer different benefits, though you may need to accept a slightly lower interest rate in exchange for more flexibility. Here's a look at some of the common types of CDs you can consider beyond traditional CDs: Bump-up CD: This type of CD allows you to request a higher interest rate if your bank's rates go up during the account's term. However, you're usually allowed to "bump up" your rate just once. No-penalty CD: Also known as a liquid CD, type of CD gives you the option to withdraw your funds before maturity without paying a penalty. Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more), and often offer higher interest rate in return. In today's CD rate environment, however, the difference between traditional and jumbo CD rates may not be much. Brokered CD: As the name suggests, these CDs are purchased through a brokerage rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and might not be FDIC-insured. This embedded content is not available in your region.
