A Certificate of Deposit (CD) is a risk-free way to save and grow your money. Despite relatively low return rates when compared to stocks, real estate, bonds, or almost any other kind of investment, CDs are still extremely popular. The security knowing that deposits are insured, and having a guaranteed rate of return, is something that almost anyone can appreciate.
If you have some money to save, then a CD is one of your best options. Compounding interest will increase your investment over time, and you could top up your CD at the end of its term (or open multiple CD’s as you save more money).
The best Certificate of Deposit rates available as of August 2018.
Capital One 360 – 5 Years – 3% APY
There’s no minimum deposit on this account. You can save $500 or $5000, or whatever it is that you want to put away. The 3% APY is highly competitive and would allow for some great returns from compounded interest.
Capital One 360 – 3 Years – 2.55% APY
If you aren’t comfortable with committing to 5 years of saving with no access to your money, then a 3 Year CD could be better for you. The downside is that you’ll have to accept a lower APY, so your interest returns won’t be as good. Even so, you can still get 2.55% APY on this CD, and it’s also offered by Capital One.
Capital One 360 – 1 Year – 2.40% APY
If you want to get a small return and want the greatest amount of flexibility, then you could consider a 1 Year CD with Capital One. The APY will be just 2.4% but being able to take your investment and returns after just 12 Months can be a great benefit. You’ll ultimately need to decide whether the flexibility is worth the trade-off of a lower annual percentage yield.
American Express Personal Savings Account – 1.75% APY
Finally, we look at a standard savings account. Here the returns are significantly lower, but you have more flexibility and you can continue to top up an account without having to open a new CD. Interest compounds and is calculated daily, so any new deposit will continue to grow your return.
The American Express Personal Savings Account is one of the most competitive in terms of the annual percentage yield. With 1.75% APY, that could mean saving almost $5000 in a single year with a $500 deposit and monthly deposits of $400.
Saving to reach your goals is an important part of being financially independent and responsible. While riskier investments can offer better returns, the security of a high yield savings account or Certificate of Deposit should not be overlooked.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…