Follow us for more exclusive content
Best CD Rates for October 2023
If you're looking for a low-risk investment option with a guaranteed return other than a money market account, a certificate of deposit (CD) might be the right choice for you.
CDs are offered by many banks and credit unions, including Beth page Federal Credit Union and Marcus by Goldman Sachs, and they are an excellent way to save for a future goal, like a down payment on a home or a child's education.
As we approach the middle of October 2023, it's important to stay informed about the latest CD rates being offered by different banks and credit unions.
In this blog post, we'll be diving into some of the best CD rates available in October 2023 from various banks and credit unions, so you can make an informed decision about where to invest your money.
Whether you're a seasoned investor or just starting, this post will provide you with the information you need to climb the CD ladder. You can also access personalized investment guide with our trusted financial advisor.
Key Takeaways
- A certificate of deposit (CD) is a low-risk investment option with a guaranteed return that is ideal for saving for future goals, such as a down payment on a home or a child's education.
- Various types of CDs, such as fixed-rate, variable-rate, bump-up, and liquid CDs, offer different advantages and disadvantages depending on your financial situation and goals.
- The interest rates offered by CDs depend on the amount and term duration, and it is essential to research and compare options before deciding on the best CD type and bank or credit union for your investment.
Disclaimer
The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.
The Best CD Rates at Banks and Credit Unions
Looking to earn more on your savings? Check out these lists of the best CD rates available at banks and credit unions.
Top CD rates by term
While we can't guarantee that these CD rates will make your heart skip a beat, we're confident that they're among the most competitive in the market and worth considering if you're looking to earn more on your savings.
What are current CD rates?
The interest rates offered for a CD depends both on the amount and the term duration.
What are the best CD rates going on right now?
These are some of the best 1-Year CD rates:
| CD | Rate |
|---|---|
| Premier Members Credit Union | 5.25% APY |
| Premier Members Credit Union | 5.25% APY |
| Forbright Bank | 5.25% APY |
| Bread Savings | 5.20% APY |
| CFG Bank | 5.17% APY |
| TotalDirectBank | 5.16% APY |
| Colorado Federal Savings Bank | 5.15% APY |
| Synchrony Bank | 5.15% APY |
| Spectra Credit Union | 5.15% APY |
| BMO Harris | 5.10% APY |
| Limelight Bank | 5.10% APY |
| My eBanc | 5.10% APY |
| Genisys Credit Union | 5.09% APY |
| First Internet Bank | 5.06% APY |
What are the best CD interest rates for three years?
| CD | Rate |
|---|---|
| Credit Human | 4.90% APY |
| Summit Credit Union | 4.85% APY |
| Quorum Federal Credit Union | 4.85% APY |
| Lafayette Federal Credit Union | 4.84% APY |
| MYSB Direct | 4.76% APY |
| CFG Bank | 4.60% APY |
| Hughes Federal Credit Union | 4.60% APY |
| Seattle Bank | 4.60% APY |
| U.S. Senate Federal Credit Union | 4.60% APY |
| Crescent Bank | 4.55% APY |
| First Internet Bank | 4.54% APY |
| Mountain America Credit Union | 4.50% APY |
| 5star Bank | 4.50% APY |
| Langley Federal Credit Union | 4.50% APY |
| Apple Federal Credit Union | 4.50% APY |
| Pima Federal Credit Union | 4.50% APY |
| Signature Federal Credit Union | 4.50% APY |
| Bread Savings | 4.50% APY |
| Utah First Credit Union | 4.50% APY |
| The Federal Savings Bank | 4.50% APY |
The rest of this blog describes common types of CDs people purchase, and provides other useful information on CDs.
What are the most common CDs?
The prevailing type of CDs typically entail the exchange of bonds for their par value. However, an alternative settlement method is also possible, which involves a cash payment equivalent to the disparity between the market value and par value of the bonds.
In terms of rate and liquidity, the most common types of CDs are fixed-rate, variable-rate, bump-up, and liquid CDs.
1. Fixed-rate CDs
Fixed-rate CDs offer a guaranteed interest rate for the entire term of the CD. This means that the interest rate will not change, regardless of market conditions. This can be beneficial if you're looking for a predictable return on your investment.
2. Variable-rate CDs
Variable-rate CDs offer an interest rate that can fluctuate throughout the term of the CD. This means that your return is tied to market conditions and can be higher or lower depending on how the market performs.
3. Bump-up CDs
Bump-up CDs allow you to "bump up" your interest rate if rates increase during the term of the CD. This can be a great option if you're concerned that interest rates may rise in the future.
4. Liquid CDs
Liquid CDs allow you to withdraw your funds penalty-free before the maturity date. However, they typically offer lower interest rates than traditional CDs and may require a larger minimum deposit.
Each of these CD types has its own set of pros and cons, and the right one for you will depend on your individual financial situation and goals. For example, if you're looking for a guaranteed return and don't want to risk your principal, a fixed-rate CD may be the best choice for you.
On the other hand, if you're willing to take on some risk for the potential of a higher return, a variable-rate CD may be more appealing. Ultimately, it's important to do your research and compare your options before making a decision.
Why is a certificate of deposit considered a safe investment?
A certificate of deposit (CD) is considered a safe investment because it is insured by the FDIC (Federal Deposit Insurance Corporation) up to $250,000 per depositor, per insured bank or credit union.
This means that even if the bank or credit union were to fail, the depositor would not lose their money up to the insured limit. Additionally, CDs offer a fixed interest rate for a set term, which provides investors with a guaranteed return on their investment.
This makes them a low-risk option for investors who want to earn a predictable higher return (compared to traditional savings accounts, such as money market accounts or high-yield savings accounts) without risking their principal.
How safe are online CDs?
Online CDs are generally considered safe investments since they too are typically issued by FDIC-insured banks or credit unions, just like traditional CDs.
As long as you choose a reputable, FDIC-insured online bank or credit union and carefully read the terms and conditions of the CD, online CDs can be a safe and convenient option for investors.
How to choose the best CD
In addition to ensuring that you look for reputable FDIC insured banks and credit unions, when choosing the best CD for your needs, consider these other factors:
1. Interest rates
The interest rate is one of the most important factors to consider when choosing a CD. Compare CD rates and look for a CD with a competitive interest rate that will provide you with the best return on your investment.
The greater the APY, the greater your earnings will be. Although the APYs and simple interest rates for CDs generally correspond, prioritizing the APY is still crucial since some accounts may compound more frequently.
2. Term length
CDs are available in a variety of term lengths, ranging from a few months to several years. Choose a term length that fits your financial goals and needs. Keep in mind that longer-term CDs generally offer higher interest rates, but may not be the best option if you need access to your funds in the near future.
3. Minimum deposit requirements
Many CDs require a minimum deposit to open the account. Make sure you choose a CD with a minimum deposit requirement that you can afford.
4. Early withdrawal penalties
CDs typically have early withdrawal penalties if you withdraw your funds before the maturity date. Make sure you understand the penalties and restrictions associated with the CD before investing.
5. Bump-up or add-on features
Some CDs offer bump-up or add-on features that allow you to increase your interest rate or deposit additional funds during the term of the CD. These features can be beneficial if you think interest rates may rise in the future or if you want to add to your investment over time.
By considering these factors, you can choose the best CD that fits your financial goals and needs. Remember to compare your options and do your research before making a decision.
Useful CD tips
Check below for more useful information on CD rates.
How Do 1-Year CD Rates Work?
By keeping your funds invested in a one-year CD for its entire term, you're certain to receive a 4 percent yield on your initial deposit. Generally, the longer the CD term, the higher the interest rate, although there are exceptions. Additionally, banks may provide higher promotional rates for particular terms.
How do I withdraw money from a CD account?
After your CD reaches its maturity date, you can instruct your bank or credit union to roll the funds over into a new CD, deposit them in a different account, or issue a cash payment. Failing to provide specific instructions during the grace period, however, may result in the bank or credit union automatically renewing your CD.
Who offers No-Penalty CD rates?
Ally Bank and CIT Bank are two of the few financial institutions that offer no-penalty CDs rates.
How the Federal Reserve Affects CD Rates
In an effort to counteract inflation, the Federal Reserve has consistently increased interest rates. This usually results in higher interest rates on your high yield savings account and CDs as they tend to follow the trend set by the Fed's hikes.
What are the advantages of certificates of deposit?
1. Low-risk investment
CDs are considered to be a low-risk investment because they are FDIC-insured up to $250,000 per depositor, per institution.
2. Guaranteed return
CDs offer a guaranteed return, which means you know exactly how much money you will make at the end of the term.
3. Fixed interest rate
The interest rate on a CD is fixed for the entire term, which means you don't have to worry about changes in the market or fluctuations in interest rates.
4. Easy to open
CDs are easy to open and can be opened online, over the phone, or in person at a bank or credit union.
5. No fees
CDs typically don't have any fees associated with them, so you won't have to worry about paying any maintenance or transaction fees.
What are the disadvantages of certificates of deposit?
1. Limited liquidity
CDs have limited liquidity, which means you can't access your money until the CD matures without incurring a penalty.
2. Lower returns
CDs typically have lower returns compared to other types of investments such as stocks, mutual funds, or real estate.
3. Opportunity cost
By locking your money into a CD, you miss out on the potential for higher returns from other investments.
4. Inflation risk
CDs are vulnerable to inflation risk, which means the purchasing power of your money may decrease over time if the inflation rate exceeds the interest rate on the CD.
5. Early withdrawal penalty
If you need to withdraw money from a CD before the maturity date, you will usually have to pay a penalty, which can negate any interest earned.
Diversify Your Investments
While CDs are great saving and investment avenues, diversifying your portfolio is crucial for optimal investment performance. Hence, it is important to with a financial advisor. Reach out to our team of experts today; for a investment purposes including real estate investment.
Bay Street Capital Holdings
Bay Street Capital Holdings is a financial planning, wealth management, and investment advisory firm based in Palo Alto, California. The company's primary goal is to manage portfolios while maintaining and increasing total assets and income. However, unlike many other advisors who prioritize maximizing returns, Bay Street Capital Holdings focuses on managing total risk and volatility to provide its clients with better investment options.
William Huston, the company's founder, established Bay Street Capital Holdings after working for 13 years as a support for the United States' largest retirement plan, the Thrift Savings Plan. He is one of Investopedia's Top 100 Financial Advisors for 2021. In California, only two out of nineteen firms, including Bay Street Capital Holdings, are recognized as Black-owned firms.
Ekenna Anya-Gafu CFP, AAMS, based in Scottsdale, Arizona, is recognized as one of the Best Financial Advisors for his responsiveness, friendliness, helpfulness, and detail. Bay Street Capital Holdings was established to support diverse and emerging fund managers and entrepreneurs. The company was selected as a finalist in the Asset Manager for Corporate Social Responsibility (CSR) category out of more than 900 firms across the United States in 2021.
