3 reasons to shop for CD rates

I’m constantly hearing naysayers dwelling on the low CD rates currently available. Sure, it’s no secret that CD holders aren’t earning the returns they were five years ago, but that doesn’t mean everyone should abandon CD investing. Here are three reasons I think CDs still provide appealing benefits to the public.

Predictability is good

I have plenty of friends who have earned sizable returns from investing in the stock market. Guess what? Many of those same friends also lost most of their earnings, too. With CD rates, you know exactly what to expect when your CD matures. If you open a certificate of deposit that earns a 1.4% APY each year, you’re going to earn that 1.4% without any question. For account holders who are nearing or already in retirement, that predictable stream of income is an especially attractive aspect of CD investing.

No fees

The discussion of rising fees in the banking industry seems never ending, but CDs typically carry no additional fees. You won’t deal with monthly maintenance costs, and you won’t pay any extra fees for making a trade on the stock market. You’ll park your cash and be able to forget your worries.

Choices, choices, choices

If you’re considering shopping around for CD rates, you’ll be able to compare plenty of options. From bump-up CDs to no-penalty CDs to traditional CDs, banks are offering a wide range of interest rates, minimum balance requirements and commitment levels.

Not sure where to start looking for CDs? The best place to begin is the bank where you keep your checking and savings accounts. See if you qualify for increased interest rates due to your strong relationship with the institution. Before you open it, though, look around. There are plenty of online banks like Ally and Discover that have some of the highest nationally-available CD rates.