How to Earn High CD Rates

A CD or certificate of deposit is an investment opportunity available to any individual. It is risk free as you are guaranteed not to lose your money and there is a promised interest rate that is higher than a standard bank account. However, not all CDs are created equal and there are a few methods of improving the overall earnings on your purchased CD.

• 1

  Select a certificate of deposit with a longer term. Although there are six month CDs, the longer term CDs offer higher interest rates. You can deposit a fixed sum of money for as long as five years and get guaranteed high returns at the end of the term. If you can afford to leave the money in the CD for this long, it does provide the highest return.

• 2

  Deposit as much as you can. Some CDs offer a rate increase after you have invested a certain amount (typically around $5,000 or $10,000).

• 3

  Avoid withdrawing the funds until the CD has matured. If you decide to take out the money before the completion of the given term you will either have to forfeit a part of the interest payable at the end of the term or pay an early withdrawal penalty.

• 4

  Shop around. Check out various banks and other financial institutions in your area to get the best deal possible. Some banks may be offering better interest rates than what your current bank provides.