You are probably aware that a Certificate of Deposit, or CD, is useful in collecting high interest rates on your investment. You may not know, however, that there are many forms of CD accounts, all with varying conditions and interest rates.
Scottsdale Banking Rates can help you compare high CD interest rates from a multitude of banks and other financial institutions. If you find yourself unsure about what kind of CD account is best for you, consider the following variations:
Traditional CD
This is the type of CD account you are most familiar with. You deposit your money into a CD for a predetermined length of time and interest rate. You will most likely face a penalty for withdrawing your money early.
Liquid CD
This is like a combination of a CD and a savings account. You may withdraw money from your CD before the term is up without a penalty, though there is usually a minimum balance or limits on how much or how often you can make withdrawals. The interest rates are generally better than a savings or money market account but less than a traditional CD.
Bump-Up CD
The depositor has a chance to “bump up” the interest rate on their CD account to a higher rate that the bank is offering once during the term. This allows you to take advantage of rising interest rates, although the beginning CD rate will be lower than most.
