6 tips for first-time CD shoppers

Shop around for the best rate
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Shop around for the best rate

Because a certificate of deposit only requires an initial deposit, traditional banking tools such as ATM access and in-person banking are nonessential. Banks that conduct most, if not all, transactions via online and telephone transactions often offer CDs with bigger yields than banks with a large network of retail branches.

Steve Olszewski, vice president of deposit products at Discover Bank, says a bank's lack of brick-and-mortar branches gives the institution a cost advantage, and it can reward its customers with increased interest rates.

For example, while today's national average for a one-year CD is 0.49 percent, Discover and other online banks currently offer rates 1.3 percent or better for the same CD.

Be sure to compare CD rates at online banking institutions as you start your search.




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