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Finding the Best Certificate of Deposit (CD)

a woman compare CD rates on her home from the comfort of her couch

A Certificate of Deposit (CD) can play a crucial role in strengthening your savings. However, with countless opportunities available, it is important to sift through the options and select a CD from a military bank that aligns with your financial goals. Today, we are outlining a clear approach to help you find the best CD.

(Want to brush up on the fundamentals of CDs? Begin here!)

1. CD Term Length

The cornerstone of your CD selection lies in its term period, determining how long your funds remain invested. Tailor your decision to line up with your financial goals and withdrawal needs. If your goals are just on the horizon, opt for short-term CDs to meet your upcoming objectives. However, if you are planning ahead for expenses in a more distant future, like the college tuition for your child, a long-term CD is better fit. Make sure that you are aware of the minimum deposit requirements and understand the terms and conditions.

2. Consider Possible Fees

Similar to any financial product, CD accounts may come with associated fees, notably early withdrawal penalties. A thorough understanding of these fees is essential to anticipate their impact on your earnings. Reach out to your bank to gain clarity on the fees linked to CD accounts.

3. Evaluate Interest Rates

The appeal of potential earnings often hinges on interest rates. While higher rates are generally associated with increased earnings, it is important to consider factors such as Annual Percentage Yield (APY) and compounding frequency. The APY metric factors in both interest rates and compounding frequency. To identify the best CD account, evaluate the APY and compare rates across different institutions. This approach offers you a thorough overview of potential returns, ensuring an understanding of your financial options and returns.

4. Choose Institutions that are Insured

Selecting a CD at an insured institution guarantees an additional layer of security. At banks, FDIC Insurance covers deposit accounts, offering protection up to $250,000 per depositor, per insured financial institution. This coverage protects depositors like you by offering reimbursement for losses in the unlikely event of bank failure.

Want to learn more about the importance of FDIC Insurance? Dive deeper in our previous blog, “What does FDIC Insurance Mean and Why Does it Matter?”

5. Understand Added Features

Financial institutions frequently add incentives with features like account opening bonuses or heightened interest rates under certain conditions. While these features can increase earnings, it's wise to carefully review their terms and conditions. Stay aware of these features and reach out to your bank for added clarity.

6. Think About CD Ladders

Smart savers often opt for the "CD ladder" technique, where they spread their total deposit across several CD accounts with different term lengths. This method combines the flexibility of short-term CDs with the advantages of higher interest rates offered by longer-term CDs. Utilize resources like CD Ladder Calculators to help with your decision.

Finding the Best Certificate Deposit at Armed Forces Bank

The first stage in choosing the right certificate of deposit is embracing the countless benefits of these financial tools. When you align your financial goals and preferences with the basics of CDs, you can find a CD that fits your personal objectives and circumstances. This approach helps you to start your savings journey with the best account tailored to your needs.

Open a CD* today!

Want to run some numbers? Find out how much you’ll be earning by using our Certificate of Deposit Calculator.

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*$500 minimum deposit required. A penalty may be charged for early withdrawal. CD rates are subject to change at any time and are not guaranteed until CD is opened. Fees charged to the account could reduce earnings on the account.