| North Palm Beach, Fla. -- Nov. 27, 2009 (Bankrate.com) -- The average yield for a 3-month jumbo CD in the United States rose 1 basis point to 0.85 percent on Friday, according to Bankrate.com's daily Your Best Interest report.A basis point is one-hundredth of a percent.
A 3-month jumbo CD (certificate of deposit) is a time deposit, FDIC-insured to $100,000 per person ($250,000 on retirement accounts), with a fixed maturity date of three months. It usually pays higher interest than a savings account and a penalty is charged for withdrawing funds before the maturity date. Jumbo CDs have a very high minimum -- $100,000 is common -- and they pay higher rates than smaller-denomination CDs. The highest rate on a 3-month jumbo CD nationally is 1.85 percent, with an annual percentage yield of 1.89 percent. Six months ago, the average yield was 1.21 percent. The yield on a CD is higher than the rate because the yield takes compounding into account. Of the 7,784 institutions that Bankrate surveys nationally that sell 3-month jumbo CDs, 4,877 institutions offer daily compounding, 2,578 institutions offer monthly compounding and 62 institutions offer quarterly compounding. For consumers, more-frequent compounding produces a higher total yield. Institutions also have different minimum deposit requirements. Bankrate's survey found the minimum for a 3-month jumbo CD ranged from $100,000.00 to $100,000.00. Some institutions sell their CDs only in their local market; others sell CDs nationwide. Click here to see the 100 highest yields on a variety of CDs available nationally. To see all of the results of Bankrate.com's surveys, go to www.bankrate.com. The Your Best Interest report is a daily service of Bankrate.com, a financial news and information service based in North Palm Beach, Fla. Bankrate surveys more than 300 financial products from more than 4,800 institutions in all 50 states. |