Deciding where to stick your savings is tricky.
Savings and money market accounts are highly liquid but usually offer a low rate of return.
Long-term CDs offer better rates. But unless you’re willing to pay a premium for withdrawing your funds early, they’ll be locked in for years. During a period when rates are rising, that could put you at a disadvantage.
An 18-month CD offers the best of both worlds: a higher yield than a standard savings account and a low level of commitment.
The best 18-month CD rates pay four-tenths of a percentage point more than the national average of 1.26 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.
Today’s top nationally available 18-month CDs pay 1.70 percent APY. This may be a good place to invest money for short-term financial obligations, like saving up for a down payment on a house.
Finding the best 18-month CD may take some time. Besides the interest rate, you’ll need to compare early withdrawal penalties and minimum deposit requirements. Find out whether you’ll be responsible for any fees.
Here are the top nationally available 18-month CD rates. Compare these offers, then calculate how much interest you would earn when your CD matures.
|M.Y. Safra Bank||1.67%||$5,000|
|First Internet Bank of Indiana||1.66%||$1,000|
An 18-month CD is a low-risk investment. But before you purchase one, it’s important to know what you’re getting yourself into.
Ask if you’ll have to maintain a certain balance to earn the annual percentage yield. While you’re at it, find out how often you’ll receive the interest you’re earning from your bank or credit union. That way, it’ll be easier to hit your savings target or another financial goal.