How To Attain The Right CD Rates In Your City
If you’re in the market for a bank CD (certificate of deposit) you may have found your number of options overwhelming. These financial products can be a little confusing if you are new to the market. There are often many rules, limitations, and options for the investor as well as many choices to make. You can go for high yield CDs, risk-free CDs, maturity CDs, and CDs with callable features. When conducting your research you’ll want to make sure you’re comparing current CD rates. Bank rates change very regularly and if you’re not up to date with rates, you can sometimes be mislead. To find the best CD rates, and make the safest investing choices for your money, let’s take a closer look at the differences between bank CDs and brokerage CDs.
An investment CD can be found through either a banking institution or brokerage firm while a standard bank CD is offered through a bank or credit union. A standard bank CD also works similarly to a savings account, but with limitations and finite terms.
When an investor brings a certain amount of money into a bank or brokerage firm to open a CD, the CD account that the money is put into has a certain interest rates, maturity date, and sometimes callable features. Depending on the limitations of the specific CD, the CD will offer different interest rates and withdrawal terms. Standard terms range from 6 months to 5 years, but if you look hard enough some banks and credit unions will offer CD promotions which generally come with oddball maturities such as 9 months, 13 months or 18 months.
Brokered investment CDs are similar to regular bank CDs, but differ slightly. First, a brokerage CD is not generally found through a bank, but a specialized third-party investment firm such as a financial advisor, broker, consultant, and/or planner. These third parties remove the financial research and and legwork needed by finding the best CD rates and options for their client. Another difference is the brokerage fees. For doing this research, brokerages will generally charge a fee which could vary depending on what you are specifically in the market for.
In the end, your decision will depend on how much money you have to invest, what your financial priorities are, and how much time you a) conduct research on your own and b) sit on your investment once you’ve found the right account for you.
By investing on your own with traditional bank CDs, you will save on the fees imposed by big financial planning institutions or brokerage firms, however, with a brokerage firm, you save time and effort by allowing a financial specialist to find you the best CD rates with the highest yield (and safe investing results) that you are after.
Whichever route you decide on just make sure that you do your research. If you’re looking for an investment firm, it may be best to start with word of mouth. From there move forward with checking on what other customers say. Be sure to check out the Better Business Bureau, where you can get a rating as well as customer reviews of the institution.