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How to find the best CD rates

By Sheyna Steiner ·
Friday, June 20, 2014
Posted: 10 am ET

There you are at the local bank ready to purchase a certificate of deposit and start earning interest on your hard-earned savings. But wait a second, how much money are you actually going to earn on that CD? Are there better rates out there?

The answer to the former question is an easy one at today's rates -- not a whole lot. Use Bankrate's CD rate calculator to get a more specific answer. This table should give you some idea of whether or not you're getting a good deal based on the average rates in the weekly CD rates survey conducted by

Average yield on $1,000 deposit

Term Initial deposit Average yield Final total
One-year CD $1,000 0.23% $1,002.30
Five-year CD $1,000 0.79% $1,040.13


These are just the average rates though. There are better CD rates out there.

Here's how to find better CD rates

Similar to finding deals in other venues, CD buyers benefit from shopping around.

  • Check online banks.
  • Ask about CD specials.
  • Consider high-yield saving accounts for liquid savings.
  • If everything else is equal, go for daily compounding as opposed to less frequent compounding. That will squeeze every last penny out of your CD investment.

The yields in Bankrate's CD rate tables are as high as 1.1 percent as of June 18.

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Senior investing reporter Sheyna Steiner is a co-author of "Future Millionaires' Guidebook," an e-book written by Bankrate editors and reporters. It's available at all the major e-book retailers.

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January 23, 2015 at 11:44 am

Now that I have taken RMD and plan on living off it for year where can I deposit so it's liquid but make some tax free interest on it?

June 24, 2014 at 3:05 pm

That is an excellent question, Beverly!

Banks have varying policies on taking required minimum distributions from CDs. Before you put money into an IRA CD ask about the bank's policies: from what I understand, some allow penalty-free RMD's, some don't. The policy should be spelled out in the disclosures that come with the account application.

Alternatively, you might consider staggering maturities so that a CD will mature before you plan to take the distribution. Of course at today's rates you may prefer to keep it in a savings account until interest rates go up a little.

beverly mckeown
June 24, 2014 at 12:09 pm

If I put ira in CD and need to take Distribution after age 70/1/2
do I lose all the interest? Would a savings account be better?