How to Find the Best CD - It's a matter of using the right tools

How to Find the Best CD is a lot simpler than you may think. Without conducting the proper research and understanding the dynamics of certificates of deposits, more often than not, consumers don't end up with the highest yielding CD they could have attained during a particular timeframe.

CDs almost always offer a higher interest rate than savings and money market accounts. Why? Because banks don't have long term access to liquid funds held in savings and money market accounts, whereas with CD funds locked in for a defined period of time, the banking institution has additional liquidity and flexibility in how it manages assets, as well as the capital ratio and leverage benefits that depositor cash conveys to financial institutions.

Tips on How to Find the Best CD rate:

1) Use a Financial institution's weakness to your advantage. Recall during the financial collapse of 2008, distressed institutions like Countrywide and Wachovia were offering the highest yields around!
2) Generally, the larger the deposit and the longer the timeframe, the higher the yield will be for a given certificate of deposit.
3) Smaller banks tend to offer higher rates of interest than larger, more prominent names. This is especially true for internet banks. Without the overhead of bricks and mortar and with the incentive to ramp up new business, these outfits often offer the best CD deals you can find anywhere.
4) Banks that offer CDs that are not FDIC insured will often entice consumers with higher rates, but consider the downside of no FDIC insurance on your CD - it just may not be worth it!

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