Tips for Finding Better Certificate of Deposit Interest Rates

It seems as if it is one of the most unfair things ever, but the truth of the matter is as the market goes lower and interest rates move lower, yields on certificates of deposit also move lower. This means that during the time that the stock market is crashing as it is now, there are generally not many very attractive yields because the bank is unable to offer a high level of interest on your investment.

It is slightly different this time because of outside circumstances which make the banks hungry for safe cash deposits such as investments in cd's. What does this mean? It means that the banks that are in the worst shape as far as capital and solvency are the ones who are typically offering the highest cd yields in today's market. For example, banks such as National City, which was recently bought out by PNC Financial, have recently far outpaced their rivals in their cd rates because they need those safe deposits so badly. A bank that is in a safer position like a JP Morgan Chase is unlikely to offer as high of a rate of return because they don't need those assets nearly as badly.

In order to find the best cd rates you need to do these things:

1) Use Bankrate.com to compare cd rates by bank in your area. The site also offers some very interesting commentary on where yields may be moving in the future and what investors should prepare for.

2) Look for medium term cd's. The longest of term cd's are typically not a great investment because you have to lock your money up for so long, but the shortest of terms cd's also offer very low yields and aren't very competitive.

3) Always be proactive in knowing when your cd expires and do not let it rollover into a much lower rate of return. This is a common mistake!

4) Banks tend to offer the best rates on an odd number of months. For example, they typically their special rates on a 13 month cd rather than a one year cd. This is because many customers simply put their cash in the one year cd without knowing exactly what they are getting in return.

Maximizing your investments is the name of the game in this very tough environment. Use these tips to find some better rates on cd's in your area!