11 Feb How can I find the highest yield CDs?

Q. How can I find the highest yield CDs?
— Looking for more

A. It’s a good question, and certainly an interesting one as interest rates rise.

To find the highest yielding CD rate, you’ll need to do some research.

You will probably find looking online to be the easiest way to go, said Howard Milove, a wealth advisor with Access Wealth in East Hanover.

“Many `brick and mortar’ banks offer promotional deals to bring in deposits, but the rate drops significantly after the promotional period expires — so make sure you read the fine print,” he said. “Credit unions, online-only banks, and traditional banks’ internet divisions can also offer favorable rates. Since credit unions and internet-only banks have less overhead, they often provide better rates than traditional banks.”

Certain factors play a role in determining your interest rate.

For example, he said, the term of the CD represents how long you are looking to invest the money, such as six months, one year or five years.

Many banks will also require a minimum deposit to get the highest rate, he said.

As an important side note, you should consider whether CDs are the most appropriate investment vehicle for your goals, Milove said.

“CDs offer guarantees and stability and are FDIC-insured up to $250,000 but typically offer lower returns over time,” he said. “There could also be early withdrawal penalties if you need access to the money before the term is up.”

If you want to earn a higher interest rate than a traditional bank savings account and the money is for short-term use, then CDs make sense, he said.

You may also want to consider a high-yield savings account instead of CDs, Milove said, because the rates can be similar and you have immediate access to the money.

“Lastly, if you don’t need this money in the short run and have 3-plus years to invest the money, consider speaking with an investment advisor who can illustrate how taking more risk can achieve a higher rate of return,” he said.

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This story was originally published on Feb. 11, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.