Q. How can I find the best performing CDs?
— Looking for more
A. That’s a good question, and certainly interesting because interest rates rise.
To find the best performing CD rate, you will need to do some research.
You will probably find watch online be the easiest way to go, said Howard Milove, chartered accountant at Access Wealth in East Hanover.
“Many ‘bricks and mortar’ banks offer promotional offers to bring in deposits, but the rate drops significantly after the promotional period expires – so be sure to read the fine print,” he said. . “Credit unions, online-only banks, and internet divisions of traditional banks can also offer great rates. Since credit unions and internet-only banks have lower overhead, they often offer better rates than traditional banks. »
Certain factors play a role in determining your interest rate.
For example, he says, the term of the CD represents how long you’re looking to invest the money, such as six months, one year, or five years.
Many banks will also require a minimum deposit to get the highest rate, he said.
As an important note, you should consider whether CDs are the most appropriate investment vehicle for your goals, Milove said.
“CDs offer guarantees and stability and are FDIC-insured up to $250,000, but generally offer lower returns over time,” he said. “There could also be early withdrawal penalties if you need access to money before the end of the term.
If you want to earn a higher interest rate than a traditional bank savings account and the money is for short-term use, then CDs make sense, he said.
You can also consider a high yield savings account instead of CDs, Milove said, because the rates can be similar and you have immediate access to cash.
“Finally, if you don’t need the money in the short term and you have more than 3 years to invest the money, consider talking to an investment advisor who can illustrate how taking more risk can get a rate higher yield,” he said. .
Send your questions to [email protected].
Karin Price Mueller writes the Bamboos column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.comit is weekly e-newsletter.