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Get more from CD rates at banks

CD rates at banks are constantly changing, making it difficult to gauge the best time to put your money in. No one wants to lock their hard-earned cash away for five years at an extremely low interest rate, or miss out on a great rate that ultimately drops before you make a decision. Though it's nearly impossible to know the best time to invest in a CD, there are several ways to get more out of CD rates at banks, from simple calculators on Bankrate.com to more sophisticated CD laddering techniques.

Do your research on CD rates

Bankrate.com offers some of the most widely used CD rate information on the Web, which can save you time and yield better returns. Though CDs typically aren't known for huge payoffs, they are safe and stable compared with other investment options, and far better than your typical savings account. Using Bankrate.com's CD comparison chart, you can see local and national CD rates for a variety of terms, including six months, one year, three years and five years. If you are willing to work with a non-local bank, you may find higher CD rates at banks outside your area. Experiment with the comparison chart until you find something that suits your investment expectations.

How long can you last without cash?

In a perfect world, you should be able to put your money in a CD and forget about it until the term is complete. Withdrawing money from your CD usually comes with hefty fees, which will often equal or surpass any interest you earn. CD rates at banks are generally much better for long-term agreements, so if you are willing and able to keep your hands off the cash, choosing a longer-term CD will come with a significantly higher interest rate. But what happens if you invest in a five-year CD, and a year later the rates go up an entire percent?

The never-ending ladder

CD laddering is a CD investing technique that can help you avoid missing high CD rates at banks, and keep you from being bogged down with really low ones. Instead of investing all of your money in one CD for five years, you invest a portion in multiple CDs at different intervals. You could spread $10,000 over five different CDs for five different terms -- one year, two years, three years, four years and five years -- putting $2,000 into each CD. After the first term matures, you reinvest it in a five-year CD, and the cycle repeats -- the two-year becomes the one-year, the three-year becomes the two-year, and so forth. This allows you to cash-in on the latest CD rates at banks without putting all your eggs in one basket. You can use Bankrate.com's CD laddering calculator or read more about the CD laddering technique to learn more.

Are you ready?

Now you need to determine if CDs are right for you. Check out Bankrate.com's CD investing section to learn more about CD investing.

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