Here are five reasons you might consider investing in a CD right now:
1. Invest with certainty.
CDs from federally insured banks are guaranteed by the government’s Federal Deposit Insurance Corporation (FDIC), up to $250,000 per depositor, per insured bank, per ownership category.
That means that even if your bank closes, your money is safe up to the insured limit. And unless you withdraw your money early — in which case you’ll end up paying an early withdrawal penalty — there’s no risk you’ll lose your original investment or the interest that accrues throughout the term.
2. Get predictable returns.
Unlike many investments, CDs provide predictable, consistent returns — even if rates fall during your term. This makes it easy to determine how much interest you’ll earn over time, which can be helpful in reaching a specific goal, such as buying a home or saving for retirement.
3. Take advantage of higher yields.
CDs usually earn higher annual yields than traditional savings or money market accounts. That’s because with a CD, you agree to keep your money with the bank for a set term. Generally, the longer the term you select, the higher the annual percentage yield the bank will offer. View CD Rate Specials >
4. Choose from multiple term options.
Kendall Bank offers CDs with terms ranging from three months to four years, with multiple minimum balance options. This allows you to find a CD that balances the amount of time you can keep your money in the account with the annual percentage yield that best helps you reach your savings goals.
5. “Jump up” your rate.
With most CDs, your interest rate is locked in for the full term, offering a consistent, predictable return. But with a jump-up CD — sometimes called a “raise-your-rate” or “bump-up” CD — you have the option to increase the interest rate during the term. (This can be especially advantageous when interest rates are expected to go up.)
For example, let’s say you open a 36-month jump-up CD at 1.00% APY. Six months later, interest rates go up to 1.50%. You now have the option to “jump-up” to the current higher rate. (Some jump-up CDs even allow you to increase your rate more than once during the term.)