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CD Rates Up to 5.70%! January 2024 Updates

Introduction:

While no investment or savings vehicle is entirely risk-free, certificates of deposit (CDs) provide a level of security and predictability that sets them apart. With fixed or adjustable interest rates, terms ranging from one month to a decade, and FDIC insurance coverage, CDs are an excellent choice for individuals looking to save money with a guaranteed yield.

Best CD Rates for January 2024:

Here are some of the best banks offering above-average CD yields and additional benefits, making them stand out in the market.

  1. Western Alliance

Minimum Deposit: $1

Maximum Yield: 5.70%

Withdrawal Penalty: 90 days of interest

Rating: 4.8 / 5

Notable: Impressive 5.70% APY on 6-month CDs, low opening deposit, and accessible through the Raisin platform.

  1. Synchrony Bank

Minimum Deposit: $0

Maximum Yield: 5.65%

Withdrawal Penalty: Up to 365 days of interest

Rating: 4 / 5

Notable: Offers a range of CDs with competitive yields, no minimum deposit requirement, and flexible terms.

  1. Barclays Bank

Minimum Deposit: $0

Maximum Yield: 5.30%

Withdrawal Penalty: Up to 180 days of interest

Rating: 4.4 / 5

Notable: Online savings bank with no minimum balance requirement, no hidden fees, and daily compound interest.

  1. EverBank (Formerly TIAA Bank)

Minimum Deposit: $1,000

Maximum Yield: 5.50%

Withdrawal Penalty: 25% of interest earned over the term

Rating: 4 / 5

Notable: Above-standard deposit insurance on CDARS, offering high yields on various CD terms.

  1. Sallie Mae Bank

Minimum Deposit: $1

Maximum Yield: 5.40%

Withdrawal Penalty: Up to 180 days of interest

Rating: 4.2 / 5

Notable: Competitive yields on 10 and 14-month CDs, short-term options for those with specific savings goals.

  1. Alliant Credit Union

Minimum Deposit: $1,000

Maximum Yield: 5.35%

Withdrawal Penalty: Up to 180 days of interest

Rating: 4 / 5

Notable: It offers traditional and jumbo CDs with terms ranging from 12 to 60 months, which is ideal for those planning for the future.

  1. Quontic Bank

Minimum Deposit: $500

Maximum Yield: 5.30%

Withdrawal Penalty: Up to 2 years of interest

Rating: 4.3 / 5

Notable: Best rates on CDs with terms under two years, easy all-digital application process, and relatively low minimum deposit.

  1. Discover Bank

Minimum Deposit: $2,500

Maximum Yield: 5.20%

Withdrawal Penalty: Up to 24 months of interest

Rating: 4.3 / 5

Notable: Wide range of CD terms with attractive yields, particularly appealing for longer-term CDs.

  1. First Internet Bank

Minimum Deposit: $1,000

Maximum Yield: 5.22%

Withdrawal Penalty: Up to 360 days of interest

Rating: 4.2 / 5

Notable: Competitive shorter-term CD yields, making it an excellent choice for those looking for a one-year investment.

  1. Ally Bank

Minimum Deposit: $0

Maximum Yield: 5.15%

Withdrawal Penalty: Up to 150 days of interest

Rating: 4.3 / 5

Notable: No minimum deposit policy for regular and no-penalty CDs, customer-friendly early withdrawal penalties.

  1. CIT Bank

Minimum Deposit: $1,000

Maximum Yield: 5.00%

Withdrawal Penalty: Up to 12 months of interest

Rating: 4.4 / 5

Notable: High yields on short-to-medium-term CDs, no-penalty CD option with a competitive rate.

  1. U.S. Bank

Minimum Deposit: $1,000

Maximum Yield: 4.80%

Withdrawal Penalty: Up to 50% of full-term interest or 3%, whichever is greater

Rating: 4.4 / 5

Notable: Competitive promotional rates, choose a term that suits you, and FDIC-insured for added security.

What exactly is a CD?

Known as a Certificate of Deposit (CD), it’s a timed deposit held at a bank or credit union. It involves depositing a specific amount of money for a predetermined period, during which the funds remain untouched. In return, the account holder receives a fixed or variable interest rate, providing a secure way to grow savings.

How CDs Work:

CDs are straightforward deposit products that require a one-time deposit, with the promise to leave the funds untouched until maturity. The duration of the CD can vary, offering flexibility to investors. Upon maturity, individuals can choose to withdraw the funds penalty-free or allow the CD to renew. Different types of CDs, including traditional, no-penalty, jumbo, bump-up, add-on, and IRA CDs, cater to varying needs.

Choosing the Best CD:

Selecting the right CD involves considering factors such as the amount available for investment, the desired duration of funds being untouched, the potential for future deposits, and the comfort level with locking in a rate. Understanding early withdrawal penalties is crucial. Shopping around for the best rates is essential, as they can vary significantly among banks.

Pros and Cons:

Pros:

  • Guaranteed returns
  • Secure way to grow money
  • Easy qualification with minimal deposit requirements
  • Higher interest rates compared to standard bank accounts

Cons:

  • Limited liquidity
  • Ties up funds unless a prepayment penalty is paid
  • Rates may not keep pace with inflation during high inflationary periods

Alternatives to CDs:

  • Traditional Savings Accounts
  • High-Yield Savings Accounts (HYSA)
  • Money Market Accounts (MMAs)
  • Bonds

Conclusion:

Certificates of Deposit offer a secure and predictable way to grow savings, making them an ideal choice for risk-averse individuals. By exploring the best CD rates for January 2024 and understanding the various types available, readers are capable of making informed decisions to meet their financial goals. As with any investment, it’s essential to carefully consider individual circumstances and preferences before choosing the most suitable option.

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