Highest Rated certificates of deposit

Certificates of Deposit (CDs) are a type of savings product offered by banks and credit unions. They provide a fixed interest rate over a specified term, which can range from a few months to several years. In exchange for leaving the money deposited for the agreed period, customers typically receive higher interest rates compared to regular savings accounts.

The primary advantage of CDs is their safety and predictability. They are insured by the FDIC up to $250,000 per depositor, per insured bank, for each account ownership category, making them a low-risk investment. The fixed interest rate guarantees a known return, making it easier for savers to plan their finances. However, CDs require the depositor to lock in their money for the term of the CD, which can limit liquidity. Early withdrawals often incur penalties, which can negate the interest earned. Therefore, they are best suited for funds that do not need to be accessed immediately. Additionally, the interest rates on CDs may not keep pace with inflation, potentially diminishing the purchasing power of the returns over time. Despite these drawbacks, CDs can be a useful tool for those looking to diversify their savings and secure a guaranteed return.