By and large, CD rates are depressingly low these days. Better CD rates can be found, however, and for a limited time, one credit union is even offering its members a CD rate not seen much since the early 1990s.
Average CD rates currently hover around 1 percent for a 12-month term, yielding less-than-stellar returns for investors. The banks featured in this story offer significantly better CD rates, ranging from 1.28 percent to an incredible 7.5 percent (credit union membership required).
APYs are subject to change before the account is opened. A penalty may be imposed for early withdrawal. CDs are federally insured to the maximum allowed by law. On July 21, 2010, federal deposit insurance for banks and credit unions permanently increased to $250,000 per depositor per deposit category.
Ally Bank: 1.28 percent APY
Open a 12-month CD at Ally for a 1.28 percent APY on investment. Ally offers this rate with no minimum deposit and no monthly fees, with automatic renewal at maturity at the then-current rate.
Ally also offers a 10-Day Best Rate Guarantee. Fund a CD within 10 days of opening or renewing a CD, and automatically get the best rate Ally offers during those 10 days starting with the opening or maturity date.
Discover Bank: 1.30 percent APY
Known as Greenwood Trust Company until 2000, Discover Bank has been recognized for consistently high yields. Discover Bank offers a wide range of CD terms from 3 months to 10 years. A 12-month CD with a $2,500 minimum balance currently offers 1.3 percent APY.
Justice Federal Credit Union: 7.5 percent APY
If you qualify for membership in this credit union, one of the best CD rates around these days might be their 75-day CD anniversary deal. To celebrate the credit union's 75th anniversary, Justice FCU is offering a limited short-term share certificate--a 75-day CD with a whopping 7.5 percent APY.
The catch is that to qualify for membership in Justice FCU, you must in general be an employee, a retiree, or a contractor of the U.S. Department of Justice, Department of Homeland Security, or the federal court system, or a family member of the above.
New money deposits made by new or existing members are eligible, with an investment of as little as $500 to a maximum of $25,000 per member. This certificate does not renew, but can be transferred upon maturity.