Certificates with the Best Returns: Q4 2018

October 16, 2018
1120 Views

The current slump in the stock market is a timely reminder that a diversified portfolio is essential. In addition to diversifying stocks across different sectors and exchanges, you should also seek other investments, such as short term and mid-term savings plans. If you have cash available, there’s literally nothing to lose from putting some away into an insured savings certificates.

As has been the case for several years, a certificate of deposit (CD) remains one of the safest ways to invest extra cash when you don’t want to risk it on equities. CD’s can provide moderate returns and deposits are insured by the FDIC up to $250,000. Money market certificates are also worth considering, and in most cases can offer comparable returns

First Internet Bank of Indiana – 1 Year CD

The First Internet Bank of Indiana regularly features amongst the banks with the best returns on CD accounts. The bank is currently offering some of the best rates in the industry, even with a minimum deposit of $1000 for 12-Months.

If you want to deposit a minimum of $1000 for a single year, you’ll enjoy an interest rate of 2.65% with an Annual Percentage Yield (APY) of 2.68%.

If you are looking for a longer certificate, you’ll enjoy even better rates. A 24-Month CD with the bank currently comes with an interest rate of 2.85%, with an APY of 2.89%.

PenFed Credit Union – 1 Year Money Market Certificate

The Pentagon Federal Credit Union offers NCUA insured deposits, so this is another institution where you can make a risk-free deposit with the potential for a good short or mid-term return.

Money market certificates operate with similar structures to CDs, with similar returns. The difference is that with most certificates you will receive dividends that are compounded each day and paid out monthly.

A 12-Month certificate with PenFed requires a minimum $1000 deposit. Dividend rates are 2.57% with an APY of 2.60%.

If you’re willing to invest for longer, then a 60-Month certificate will provide dividends of 3.25% with an APY of 3.30%.

Use 12-Month Certificates as a Baseline

Although the CD option in this case looks to be more profitable than a money market certificate, you could find that the rates fluctuate depending on the exact terms. This makes it important to compare rates across different institutions depending on how much and for how long you are willing to invest.

With a money market account or CD, you’ll have a risk-free savings option that provides a better return than a high interest savings account, making for an excellent investment while equities are uncertain.

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