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Why choose alternative CDs?

Investing Basics » Why Choose Alternative CDs?

Find the interest rate knockout winner
Find the interest rate knockout winner

Rather than comparing nontraditional CDs, consumers should explore the entire banking spectrum to find high interest rates, liquidity and convenience.

While regular CDs and nontraditional CDs can lock in above-average interest rates for a fixed term, the Bankrate 2010 high-yield checking study shows that many national banks offer account options with very competitive rates.

"High-yield checking accounts can be a slam-dunk for consumers who are comfortable with online statements, direct deposits and regular debit card usage," McBride says.

However, if you are looking for a new home for a large chunk of money, the 2010 high-yield checking study also highlights that these accounts come with maximum balance caps. After an account holder crosses a certain threshold, the surplus will not earn the above-average rate.

You can search for high-yield online savings and money market accounts, which offer above-average interest rates and convenient cash access. To understand how different interest rates can impact your yield potential, Bankrate's savings rate comparison calculator shows how a few points can make a big impact.

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Product Rate Change Last week
1 Year CD 0.90%  0.02 0.88%
2 Year CD 1.03%  0.00 1.03%
5 Year CD 1.59%  0.01 1.60%
 
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