Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

A Brief History Of CD Rates – And Why They’re Still A Good Deal

Monday, April 22, 2013 - 6:50 AM
I wouldn’t consider today’s CD rates as “still a good deal”, but this Ally Straight Talk blog post does provide an interesting look at CD rate history and some useful tips if you’re planning to open new CDs. The three tips include using a CD ladder, using the Raise Your Rate CDs and buying multiple small CDs instead of one large one. The last two are mostly specific to Ally. The third tip is often not necessary at other banks since they allow partial withdrawals. For example, if you need $2,000 out of a $10,000 CD, some banks will allow the customer to withdraw $2,000 from the CD and only pay a penalty on the $2,000 of the principal that was withdrawn. The remaining $8,000 can be kept in the CD until maturity. For the case of Ally, if you need $2,000 of principal from a $10,000 CD, you'll need to close the CD before you can get access to any of the principal.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Monday, April 22, 2013 - 10:30 AM
I was very surprised about how many of my banks are making one close the entire CD even if they only need a small amount out of it.  This way, you are forced to put it back into a CD with a lower rate or take it to another bank or CU.  Years ago, it was a foregone thought that one only had to pay the penalty on whatever is withdrawn.  Now the game is very different so that is why buying several smaller CDs is the way to go for me.
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152