When you have hundreds of thousands of dollars at your disposal, your investment options can seem endless. If you’re looking to diversify your portfolio and minimize risk, consider buying a jumbo CD.
Here are the top nationally available rates for jumbo CDs. Compare these offers, then calculate how much interest you could earn when your CD comes due.
|First Financial Northwest Bank||3.50%||$100,000|
|University Federal Credit Union||3.25%||$100,000|
|Michigan State University Federal Credit Union||3.16%||$100,000|
|Grow Financial Federal Credit Union||3.10%||$100,000|
|Signature Federal Credit Union||3.10%||$100,000|
Jumbo CDs are typically available for savers with at least $100,000 to deposit. In the past, these accounts provided a higher rate of return than traditional CDs. But with interest rates still at the low end of the spectrum, good deals on jumbo CDs can be hard to find.
The best 5-year jumbo CDs pay more than 2.5 times the national average of 1.39 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.
Today’s top nationally available jumbo CDs pay at least 3.50 percent APY. This may be a good place to invest if you’re saving money for a big ticket item or a large down payment on a house. Having a jumbo CD can also be helpful if you need collateral for a loan.
Finding the best jumbo CD rates
If you only go as far as your local bank to find CDs, you could be leaving money on the table. That’s why shopping around and comparing rates is key.
Online-only banks typically offer competitive CD yields because they have no branches to maintain. Credit unions often have favorable rates for savers as well. If you focus on the institutions that are federally insured, you’ll be able to reclaim your funds (up to $250,000) even if your bank shuts its doors.
Generally, longer CD terms offer higher yields. If you’re looking for the best jumbo CD rates, start by checking out accounts that mature within five years.
Top account details
- First Financial Northwest Bank was founded in 1923 and is headquartered in Renton, Washington. It earned four out of five stars in Bankrate’s latest review of its financial health.
- University Federal Credit Union was established in 1936 and is based in Austin, Texas. Membership is open to anyone who joins the University of Texas Longhorn Foundation, which requires a single $20 donation.
- Michigan State University Federal Credit Union was founded as the Michigan State College Employees Credit Union in 1937. Membership is open to employees of select groups and students, alumni, faculty and staff of Michigan State University and Oakland University. Anyone outside of the state can join through the Michigan United Conservation Clubs. The credit union earned five out of five stars in Bankrate’s review of its financial health.
- Grow Financial Federal Credit Union is based in Tampa, Florida and was founded in 1955. Membership is open to anyone who pays a $5 membership fee and opens a savings account with a minimum $5 deposit. The credit union earns four out of five stars in the latest review of its financial health.
- Signature Federal Credit Union was founded in 1970. Membership is open to anyone who joins the American Consumer Council. The credit union, which is based in Alexandria, Virginia, earned four out of five stars in Bankrate’s latest review of its financial health.
Consider your tax bite
Having a jumbo CD could leave you with a giant tax bill. The interest you earn will be taxed as ordinary income.
Calculate your potential tax bite and decide whether you should put part of your money elsewhere. Capital gains are taxed at a lower rate, so investing some of your savings in stocks and other securities could reduce what you owe Uncle Sam.