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How to Get the Best CD Rates
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Simple Steps on How to get the Highest CD Rates with FDIC insurance at the Best Terms from Banks and Credit Unions. 

Due to "the float" or time you are not earing interest when the bank has your money, the "best rate" may not be at the bank or credit union that pays the highest annual percentage rate (APY).   This article tells you how to get the Highest CD Rates at the Best Terms from Banks and Credit Unions. 

To get the best overall CD rate:

Step #1 Find the best (highest paying) CD rate from our Highest CD Rate Survey for the term of interest

Print that list out.  Then make a list of several banks and credit unions that are at or near the top before the next step. Make columns for bank name, telephone number, interest rate, term, float for new money, float for getting your money out and "effective interest rate" after you account for any loss to the float.

After you find the best rates at a few places, go to step #2



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Step #2 Find out if your money goes to work the day you deposit it.  We've heard reports some banks take your money then ship the forms to another state and don't credit you with interest for up to 10 days. The best places deposit the funds into your account the day they take your money and credit you with interest from that day going forward.
A rate may look great for a 4 month period but if they take 10 days after they take your money before they credit you with interest, then your effective rate is reduced  significantly.

Step #3 Find out how long it takes to get your money once you request a check after the CD matures.
Ideally, you should be able to get a cashier's check from the bank teller the day your CD matures so you can take it to a new bank with a better rate. Make sure they do not close the account then send you a check in the mail as they can delay the check for many days and collect the "float" on your money until you finally get the check and deposit it into a new interest bearing account.

Step #4  Can you move money in and out electronically?
Short of getting a cashier's check and depositing it in a new back or CU on the same day where the new bank credits your account the day you make the deposit, the next best way is to transfer funds electronically (electronic funds transfer or ETF).  Ideally you open the CD online at the new organization and fund it with an EFT where the money is debited from the old account on Day 1 and credited to the new account on Day 2.  You only lose one day of interest this way

The bottom line is the highest interest rate may not be the best for you.  Do your homework and calculate any loss to the float.  For CDs with terms of many years, the effect is small, but for many banks competing for your new funds, they offer great short term rates that may not be as good as they look due to not getting interest during the float period..

Also, you can often get higher than advertised rates at your local branch if you do your homework. Print out the Highest CD Rate Survey  and bring it in with your list of rates offered by some other banks advertised on many web sites.  Perhaps print out the advertisement so you have proof.  I've often had tellers give me better than advertised rates if I bring in my own rate sheet, especially if it keeps me from taking my money elsewhere.


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Definitions: 

A Certificate of Deposit or CD is certificate from a bank stating that the named party has a specified sum on deposit, usually for a given period of time at a fixed rate of interest.  Often there is a penalty for early withdrawal (taking your money out before the specified period of time.)

Float: The use of funds generated as a result of timing differences in the check-clearing system.
Get the highest yielding (APY) certificate of deposit from Citibank, BofA, Chase, Wachovia, Taunus, Wells Fargo, HSBC, US Bancorp, SunTrust, ABN, Citizens Financial, Capital One, National City, PenFed CU, World Savings, credit unions and many more.  See our Highest CD Rate Survey

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