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How to Find the Best Rates on CDs

By Synchrony Staff

  • PUBLISHED August 01
  • |

By using an online CD calculator, you can determine how much your money may grow during different terms and compare rates across institutions. Learn more about CDs and other deposit products that allow you to pursue your financial goals with confidence:

Defining CDs and Other Fixed Deposit Products

Fixed deposits (also known as term deposits) refer to products like certificates of deposit that pay a certain interest rate for a set period of time. Fixed deposit accounts usually offer higher yields than regular savings accounts. This is especially likely if your account is with an online bank, as online banks generally are able to offer higher interest rates.

Fixed deposits are attractive because they're predictable and there’s a guaranteed interest rate paid. It’s important to note that there’s usually a fee if you withdraw money from the CD before the maturity date or end of term. But once your account matures, you can withdraw the money, or the money can be held for another term.

Certificates of deposit are most suitable for those who know they won't need their cash again for months or years. When determining if a CD is right for your savings plan, make sure the funds you plan to invest won’t need to be accessed before the deposit reaches maturity. Keep in mind that every budget should also include discretionary funds that are available for immediate use in a more liquid deposit account.

Rates are determined based on term, so the longer you keep your money in a CD, the better interest rate you will usually receive. For example, a 36-month term CD will typically offer a higher rate of return than a 12-month term CD.


Interest Rates and the Federal Reserve

After an extended period of low interest rates, the Federal Reserve has started raising rates again. This has led many banks to offer customers higher interest rates on savings accounts. But certificates of deposit and other fixed rate products provide a transparent and certain return that is still typically better than what you would get from a traditional savings account. Given the rise of interest rates, CDs are increasingly becoming a staple of a well-rounded financial portfolio.

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