There are many people who seek the best CD rates when buying a 1 year CD. After all, it is only normal to want the best possible interest rate when buying any investment products. 1 year certificates of deposit are very popular financial instruments among those who want their savings to grow for a few reasons.
Certificates of deposit are guaranteed by the bank and the government not to lose any of their value, so there is no chance of you ending up with less money than you started with after the investment comes to maturity. The value of a CD grows at a constant rate, unlike market based investments such as stocks, whose value fluctuates on a daily basis.
Another reason as to why a 1 year CD is a popular option among investors is that the term they are required to hold it is relatively short. After the one year period is up, there are several options available to you. You can either cash out the principal and accrued interest, or you can renew the CD for another term of one year. If the CD product that you purchased at the beginning is no longer available, your financial institution may offer you a comparable product where you can transfer your funds to.
Due to the lower amount of time that a person is required to hold the investment, rates for one year certificates of deposit are often a bit lower than those that have longer terms, like 2, 3 or 5 years. But you can still find many 1 year certificates of deposit that pay a rate that is quite attractive. In order to do this, you will need to shop around a bit and compare the different offerings by the nation’s financial institutions. This can be easily done online.
To get the best CD rates, you can click here to see some of the current data collected from many banks around the nation. One thing that you may find is that some banks offer you better rates if you purchase a CD with a higher value. Therefore, if you want to maximize the interest rate that you will be paid, make sure that you’re buying the biggest CD that you can afford at the moment. But this doesn’t mean you need to be particularly wealthy to buy a CD and get the top rates. You can find many banks, especially those that conduct most of their business online and don’t have physical branches, who offer very decent rates on investments that can be purchased for $500 or less.
One thing that you need to be aware of when you buy any certificate of deposit is that you generally will not be able to access the funds before the instrument comes to maturity. Some banks will let you cash out early if you really need the money, however they will charge you significant penalties for doing so which will often wipe out any interest that has accrued on your investment so far.
Join the newsletter
Subscribe to get our latest content by email.