![]() Frequently asked questions about CDsĪ CD is a deposit account that earns a fixed rate of return in exchange for locking in your funds for the entire term. While you should only commit funds to a CD that you can afford to part with until the CD matures, it’s still helpful to be familiar with the terms of its early withdrawal penalty. ![]() The required minimum deposit for a CD can range from $0 to $10,000 or more. In addition to a CD’s APY, pay attention to factors such as the minimum deposit requirement and the early withdrawal penalty. central bank hikes interest rates, and in turn they lower yields when the Fed cuts interest rates. Competitive banks tend to increase their yields when the U.S. Rates on many CDs have been increasing for more than a year, thanks to the Federal Reserve hiking interest rates 11 times since March 2022. Credit unions, such as Alliant Credit Union, also commonly offer high rates because their profits go back to members. You’ll often find the best CD rates from online-only banks, such as Synchrony Bank, which don’t have the overhead costs of running branches - and which also may offer competitive rates to draw customers away from traditional brick-and-mortar banks.
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