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Hunting for the best CD rates

By Sheyna Steiner ·
Wednesday, May 4, 2011
Posted: 12 pm ET

With short-term interest rates set to remain at nearly zero percent, the yield drought will drag on, much to the detriment of savers of all stripes. CD rates have been particularly hard hit; the average one-year CD has yielded less than 1 percent since September 2009.

There's not much for savers to do but wait for interest rates to rise but, in the meantime, comparison shopping can turn up some better deals on certificates of deposit.

Online banks often offer the best CD rates, but they're far from alone. Banks in areas where lending has increased attempt to collect deposits by offering higher than average rates, and banks that are struggling a bit financially may also offer better yields.

Use Bankrate's rate tables to begin shopping around. You can find the highest yields available nationally or restrict your selections to CDs offered locally. Some savers may find it too unnerving to buy a CD from a struggling bank, even with the FDIC insurance. If so, it's easy to avoid unwittingly saving with a weaker-than-average institution:  Pay attention to the stars underneath the name of the bank on the rate table.

The stars denote the Safe and Sound rating Bankrate analysts have assigned the bank. Five stars indicate a superior specimen while one star is the lowest rating. You can find ratings for all banks, thrifts and credit unions here.

Found any good deals lately?

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May 05, 2011 at 8:55 pm

You can earn a better rate of return if you pick a bank that pays a decent rate AND charges low fees. Those tend to be the online banks without the overhead.