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Best Money Market Rates & Accounts – March 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

If you’re looking to save more money beyond your regular savings account, consider adding a money market account to the mix. A money market account can earn at a higher rate than a savings account, especially if you have a larger balance to deposit. Many MMAs tier their rates as well, rewarding higher balances with higher rates.

Like most deposit accounts, the rate on money market accounts has grown over the past few years, up from 0.188% APY in 2016 to 0.391% APY in Mar. 2019. Savings account rates have also increased, but still averaged only 0.273% APY in Mar. 2019.

You can do much better than a 0.391% APY on a money market if you’re willing to break with traditional brick and mortar banks. Opening an MMA at the bank around the corner, for example, may not yield more than 1% APY, while an internet-only bank might offer a rate of 2% APY or higher. With a rate like that, you can boost your savings by a wide margin.

If you were to put $50,000 into an MMA earning 0.04%, you would earn only $20 in interest over a year. Put that same starting amount into an online bank account at 2%, and you’d earn $1,000 in interest over a year.

With so many options out there, it can seem daunting to search for a new bank account with a potentially new bank. We’ve made it it easier for you by rounding up the best money market accounts out there. We searched through over 12,000 banks and credit unions to find the money market accounts paying the highest interest rates. We also looked at an account’s minimum requirements and fund accessibility.

Overall, we found that internet banks consistently beat the competition. You might not recognize all their names — new online banks are continuing to crop up — but if it’s high interest rates you’re looking for, it might be good to branch out since online banks are the way to go. Here are the best rates for March 2019:

1. High Rate: UFB Direct – 2.45% APY, $5,000 minimum deposit and balance to avoid $10 monthly fee

UFB Premium Money Market - New Money from UFB DirectUFB Direct is a division of Axos Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 2.45% is an outstanding rate, but you need to have a balance of at least $25,000. If your balance drops below that, you’ll earn an APY of 0.50%. You’ll also need to keep an average daily balance of at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

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on UFB Direct’s secure website

Member FDIC

2. High Rate: earn.bank – 2.41% APY, $100 to open, $0 minimum balance, $10k to avoid $10 monthly fee

Money Market Account from earn.bankearn.bank is a division of Silvergate Bank, a state-chartered bank headquartered in San Diego, CA. The state-chartered bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. Silvergate Bank created earn.bank to provide “a transparent, powerful savings vehicle that will help you meet your savings goals”. At 2.41% APY, the internet-only bank is certainly starting out strong. You only need $100 to open the account and there isn’t a minimum balance requirement to earn the high rate. A few downsides to this account include a $10 monthly maintenance fee that comes with a steep balance requirement if you want it waived. You would need to maintain an average daily balance of $10,000 to avoid the monthly fee. The account does not come with check-writing privileges and there is no ATM access. You’ll also want to make sure you’re enrolled in eStatements as you’ll be charged a $25 fee for each paper statement you receive. You can deposit your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month.

LEARN MORE Secured

on earn.bank’s secure website

Member FDIC

3. Trusted Bank: Capital One – 2.00% APY, $10,000 minimum balance to earn APY

360 Money Market from Capital OneYou may think of credit cards when you think of Capital One, but don’t overlook their deposit accounts. The 360 Money Market account currently comes with a great 2.00% APY. While the bank doesn’t require you to have a minimum amount to open the account, you will have to maintain a balance of $10,000 or more to earn their high rate. If your balance falls below that amount, you’ll earn an APY of 0.85%. We really like that Capital One doesn’t impose any monthly fees, and while they don’t offer checks, they do provide you with an ATM card that you can use to withdraw up to $1,000 per day. While you’re able to make an unlimited amount of withdrawals from an ATM per month, remember that you’re limited to making six certain transfers and withdrawals per cycle due to Federal Law. To access this account, you may do so online, in person, or on-the-go through Capital One’s mobile app.

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on Capital One’s secure website

Member FDIC

4. Favorite Online Package: Ally – 0.90% APY, no minimum deposit and link to free checking

Online Savings Account from Ally BankAlly Bank is a very popular internet-only bank. If you keep a daily balance of $5,000 or less, you will earn the 0.90% APY. If you’re able to keep a minimum daily balance of $25,000 the APY increases to 1.00%. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package – particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don’t need check-writing capabilities on your savings, you would still be better off with Ally’s savings account.

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on Ally Bank’s secure website

Member FDIC

The rest of these accounts are listed by APY regardless of minimum balance.

5. Highest Overall Rate: Virtual Bank – 2.36% APY, no minimum balance to earn APY

eMoneyMarket from Virtual BankVirtual Bank, a division of IBERIABANK, is currently offering an introductory rate on their money market account that is the highest available. This rate is guaranteed for 12 months and will adjust to the standard rate that is in effect at the time. New customers can earn the 2.36% APY by depositing a minimum of $100. While there isn’t a minimum balance requirement to earn the APY, there is a balance requirement to avoid incurring the $5 monthly service fee. All you’ll have to do is maintain a daily minimum balance of $100 and they’ll waive the monthly fee. While this account doesn’t have any check writing capabilities, you can easily move money in and out of the account via ACH. Virtual Bank has a mobile app, that has the mobile check deposit feature, in addition to their online banking platform.

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on Virtual Bank’s secure website

Member FDIC

6. High Rate: Bay State Savings Bank – 2.35% APY, $5,000 minimum to open and avoid $7 monthly fee

Smile Worcester County Consumer Money Market from Bay State Savings BankBay State Savings Bank opened its doors in 1895 with a commitment to “be the community bank of choice” for its community. As time has gone on, this community bank has evolved to include digital banking and welcomes all U.S. residents to apply for an account. The bank has also grown to acquire over $400 million in assets. Currently, it’s offering a high rate on a money market account that does more than just hold your money. The money that you deposit helps Bay State Savings Bank support the economic growth of areas in need within Worcester County. So, not only will you be earning an outstanding APY 2.35%, but you’ll also be helping to an area in need of support. There are a few items to be aware of prior to opening the account: there is a $7 monthly fee if you can’t maintain a $5,000 balance and outgoing ACH transfers are limited to $10,000 per transaction. This account does come with check-writing capabilities and online bill payment services. Bay State Savings Bank is not only insured by the FDIC, but they are also insured by the Depositors Insurance Fund (DIF).

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on Bay State Savings Bank’s secure website

Member FDIC

7. Top Choice: Sallie Mae – 2.30% APY, no minimum balance and checks available

Money Market from Sallie Mae BankIf you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 2.30% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access – this is a good bet. Sallie Mae has just recently increased the APY, making this one the best rates in the country.

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on Sallie Mae Bank’s secure website

Member FDIC

8. High Rate: Northpointe Bank – 2.30% APY, $25,000 minimum balance, checks and debit card available

Liquid Money Market from Northpointe BankNorthpointe Bank, is a fairly large bank located in Grand Rapids, MI. They have over $1 billion in assets and have only been around since 1999. Currently, they’re offering a 2.30% APY on their money market account. While you’ll only need $1,000 to open the account, you’ll have to have a minimum balance amount of $25,000 to earn the high APY. If you have a balance between $1,000 and $2,500, you’ll earn an APY of 0.20%. If your balance is between $2,500 and $25,000, you’ll earn 0.25% APY. Once your balance exceeds $1 million, the APY will drop to 0.50%. This account comes with a debit card and checks. Northpointe Bank does not charge a monthly maintenance fee, but will charge a $15 Excess Transaction Fee each time you exceed six certain transactions a month. The offer online banking and have a mobile banking app.

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on Northpointe Bank’s secure website

Member FDIC

9. High Rate: Pacific National Bank – 2.25% APY, $5,000 minimum balance to earn APY

MMDA Online Special (New Money Only) from Pacific National BankPacific National Bank has quite an interesting history. In 1982, Banco Del Pacifico Ecuador (BPE) decided to establish Banco Del Pacifico International in Miami, FL as an Edge Act bank. The Edge Act allowed national banks to do international banking through divisions chartered by the Federal Reserve Bank. By 1985, Banco Del Pacifico International decided to become a national bank charter and changed its name to Pacific National Bank. Since this change, the bank has acquired over $454 million in assets. The bank initially offered its services to South Florida residents, but decided to expand to all U.S. residents with a valid Social Security Number in 2016.Today, Pacific National Bank is offering an online special on its money market account. With a minimum deposit of $5,000, you could earn an APY of 2.25%. You’ll need to maintain that amount in the account on a daily basis to waive the monthly maintenance fee of $25 and to continue earning the high rate. Check writing is available with this account, but keep in mind that you can only make six certain transaction within a month due to federal law. If you exceed six certain transactions within a month, Pacific National Bank will charge a fee of $20 per additional transaction. You may also make ACH transfers, free of charge, without any limits after the initial funding. In addition to banking online, the bank offers a mobile banking app for your convenience.

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on Pacific National Bank’s secure website

Member FDIC

10. High Rate: BankPurely – 2.25% APY, $25,000 minimum balance, ATM access

BankPurely
BankPurely, a division of Flushing Bank, currently offers a 2.25% APY on their money market account. You’ll have to either deposit a minimum amount of $25,000 or grow your balance to that amount in order to earn interest. If you’re not able to deposit that amount, you may want to go with Sallie Mae since they have a great rate for a lower deposit amount. However, BankPurely does provide an ATM card, which gives you access to surcharge-free ATMs within the Allpoint Network. Just keep in mind that you’ll be limited to withdrawing $1,000 per business day. Per Federal law, you’ll also be restricted to making six transfers per month. You’ll have access to online banking as well as to their mobile banking app to manage your account. Plus, if you open an account with BankPurely, they’ll plant a tree.

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on BankPurely’s secure website

Member FDIC

11. High Rate: Self-Help Credit Union – up to 1.88% APY, $500 minimum deposit and minimum balance

Money Market from Self-Help Credit UnionSelf-Help is a credit union that anyone can join. If you don’t live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 – but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.88% on balances from that are at least $500. You also need to maintain the balance during the month – otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).

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on Self-Help Credit Union’s secure website

NCUA Insured

Special Mention: Great Rate for Small Deposits: Premier Members Credit Union – 4.00% APY up to $2k

Premier Members Credit Union

Premier Members Credit Union is open to anyone willing to make a $5 donation Impact on Education, a charity for the Boulder Valley School District. This credit union is currently offering an incredible rate of 4.00% with only $5 to open the account. You can earn this APY on balances up to $2,000. Amazingly, even if you grow the balance up to $5,000, you’ll earn 1.49% APY. As the balance increases, the APY decreases to the following:

  • $5,000.01-$10,000: 0.75%
  • $10,000.01-$50,000: 0.50%
  • $50,000.01-$100,000: 0.40%
  • $100,000.01-$250,000: 0.35%
  • $250,000.01+: 0.30%

Premier Members Credit Union rewards low balance savers by placing the highest rate with the lowest deposit, but if the balance grows they start using a reverse tier system where they blend the APY as the balance grows. Checks are available with this account, but you can only make six withdrawals per month. Each additional withdrawal will be assessed a $10 fee.

LEARN MORE Secured

on Premier Members Credit Union’s secure website

NCUA Insured

What to consider before opening a money market account

Before you get bogged down in the details, let’s take a look at some quick pros and cons of a money market account.

Pros:Cons:
  • Typically carry higher interest rates than savings accounts
  • Convenient access to your funds with check-writing abilities and a debit/ATM card (not offered on all accounts)

  • May carry monthly maintenance fees or a high balance to waive one
  • Still limited to six transfers and withdrawals per month like a savings account (or you’ll face a fee)
  • You’re better off using a higher yield product like CDs for money you won’t need in the immediate future

Who money market accounts are best for

Now that you know the basics of a money market account, should you get one? They’re a good choice if you have a big deposit you’d like to keep safe and growing at a high interest rate. Then when you need to access that money, perhaps for an upcoming purchase or in an emergency, you can often easily do so with an ATM/debit card or by writing a check.

Savings accounts vs. money market accounts

Money market accounts often earn a higher rate than standard savings accounts. The caveat is that MMAs often require higher opening deposits or higher balances than a standard savings account. Even so, you may also find that one bank’s top money market rate earns at the same rate (or lower) as a savings account at another bank.

For example, one of the best savings accounts, Ally’s Online Savings account, offers a 2.20% APY while its money market account earns at a mere 0.90% APY (on most balances). So if it’s high interest rates you’re after, be sure to compare accounts across the board rather than turning immediately to a money market account. Just be sure to keep your balance limits in mind when shopping around.

What often separates money market accounts from savings accounts is their check-writing abilities or issued ATM/debit cards. This provides easier access to your money especially if you have larger balances you’re saving for a bigger purchase. Not all money market accounts offer these features, though. Furthermore, money market accounts are still savings vehicles, so they’re also limited to six outgoing transactions per month, like transfers and withdrawals.

Read more about the differences between money market and savings accounts here.

CDs can offer higher rates than money market accounts

Savings accounts and money market accounts often pay much lower interest rates than CDs. Right now you can get a 1-year CD paying 2.75% APY (with only a $500 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are currently as high as 3.00%. Creating a CD ladder also allows you to protect your investments over the years by locking in today’s high rates in a long-term account while also staying flexible for any potential rate increases with your shorter-term accounts. The interest rate on a money market account can change right away, at the bank’s discretion.

If you need some savings more immediately, money market accounts are great places to keep that money— it’ll keep growing, while still remaining accessible. In contrast, should you need to access your CD funds before it matures, you’ll likely face a pretty heavy penalty, typically forfeiting three to six months of interest.

A money market account isn’t the same thing as a money market fund

Money market accounts, like deposit accounts, provide FDIC insurance on your deposits up to $250,000. Money market funds, on the other hand, are investment accounts, most likely sold by your broker, and are regulated by the Securities and Exchange Commission instead. Money market funds invest in highly liquid cash and cash equivalent securities that typically mature within 13 months.

As an example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one “invests in short-term, high-quality securities.” Its objective is to keep the fund trading at $1 and generate a decent return. Still, money market funds can end up with a lower return than those you see from the money market accounts listed in this article. Since money market fund returns are dependent on the market and the Federal Reserve Rate, it’s important to keep an eye on the current interest rate climate to see whether investing in these funds are worth your time and money.

Money market funds charge expense ratios, or management fees, that are charged as a percentage of your fund (Vanguard’s is currently 0.16% as of Dec. 2018). You can also end up paying some transaction fees. It’s important to watch out for an account’s fees which can often lessen your total investment in the end. Like money market accounts, money market funds can also require a high minimum balance to open an account.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds without taking on the risk of market investments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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The Top 6 Month CD Rates for March 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The top 6 month CD rates
Source: iStock

Short-term certificate of deposit (CD) accounts offer investors a safe opportunity to squirrel away money for a future expense. If you’re looking for a brief solution for storing your cash and want to earn more interest than a typical savings account will offer, a 6 month CD can make a lot of sense. (It’s also a good place to start if you’re building a CD ladder.)

Using information from DepositAccounts.com, another LendingTree company and a database of offerings at more than 17,100 banks and credit unions, we found the five banks and five credit unions with the top 6 month CD rates. If there was a tie, we chose the institution with the smaller minimum-deposit requirement. We pulled these rates on March 13, 2019, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.86%, according to the DepositAccounts.com database. These options outperform that average by a long shot. (You may also want to view our picks for the overall best CD rates.)

Banks with the best 6 month CD rates

6 Month CD from ableBanking

ableBanking

6-month CD APY: 2.55%
Bank information: ableBanking was founded by former professionals from brick-and-mortar banks. A solely online bank, ableBanking is a division of Maine-based Northeast Bank, founded in 1872. CD accounts are open to all U.S. residents over 18 years of age.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on ableBanking’s secure website

Member FDIC

6 Month Online Time Deposit from My eBanc

My eBanc

6 month CD APY: 2.53%
Bank information: BAC Florida Bank of Coral Gables, Fla., is part of The Pellas Group. The CD program, open to all foreign and domestic customers, is designated as a “BAC Internet Time Deposit.” Overseas CDs based on the euro are not insured by the FDIC.
Where to open CD account: Online
Minimum balance to open: $5,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE 

Member FDIC

Virtual Bank

VirtualBank

6 month CD APY: 2.50%
Bank information: VirtualBank is a subsidiary of Louisiana-based IBERIABANK Corp., offering 24/7 digital or telephone access on eCDs, open to applicants anywhere in the U.S.
Where to open CD account: Online (paperless account options)
Minimum balance to open: $10,000
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

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on Virtual Bank’s secure website

Member FDIC

6 Month CD from Live Oak Bank

Live Oak Bank

6 month CD APY: 2.45%
Bank information: Live Oak Bank is located in Wilmington, NC, but serves customers nationwide through online banking. While their initial focus was to help small businesses acquire funding, they now help all individuals through personal banking.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on Live Oak Bank’s secure website

Member FDIC

First Internet Bank

First Internet Bank

6 month CD APY: 2.43%
Bank information: A subsidiary of First Internet Bancorp, this online bank founded in 1999 has no branch locations, but offers service online in all 50 states.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on First Internet Bank’s secure website

Member FDIC

Credit unions with the best 6 month CD rates

6 Month Regular Certificate from Advancial

Advancial

6 month CD APY: 2.62%
Credit union information: Advancial was established in 1937. Since then, they’ve been providing creative ways to serve their members.
Membership details: Anyone can join this credit union if they join Connex, which has a $5 membership fee. However, if you choose to join the way, you’ll have to join using a paper application. You can just reach out to the credit union to provide you with the paperwork via email. Before you do that, see if you qualify another way.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: Determined by the credit union.

LEARN MORE Secured

on Advancial’s secure website

NCUA Insured

PenFed Credit Union

PenFed Credit Union

6 month CD APY: 2.40%
Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.
Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

36 Month Share Certificate from Communitywide Federal Credit Union

CommunityWide Federal Credit Union

6 month CD APY: 2.30%
Credit union information: Founded as a credit union to provide quality financial services to individuals in South Bend, IN, CommunityWide Federal Credit Union has grown to offer their services to various communities within Indiana as well as the digital world.
Membership details: Anyone can become a member by donating to a list of organizations including the Y.M.C.A. If you’re a member of the Michiana Goodwill Boosters or Marine Corps. League of St. Joseph Valley, you’re also eligible to become a member.
Where to open CD account: Online
Minimum balance to open: $2,000
Maintenance fees: $0
Early withdrawal penalties: Equal to the amount withdrawn multiplied by the remaining days left in the term.

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

6 Month Share Certificate from Interior Federal Credit Union

Interior Federal Credit Union

6 month CD APY: 2.02%
Credit union information: Interior Federal Credit Union was established in 1935 with the intention to promote financial wellness. During the Great Depression, employees of the Department of the Interior (the federal department that is responsible for the conservation of federal lands and natural resources) couldn’t get credit at their local banks, so they formed this credit union. Today, the credit union serves U.S. residents nationwide.
Membership details: Anyone can join by the credit union by joining the New Mexico Wildlife Federation, which you can do when you’re filling out your application. Check to see, however, if you’re able to join through employment, organization affiliation, or through an immediate family member.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 30 days’ worth of interest.

LEARN MORE Secured

on Interior Federal Credit Union’s secure website

NCUA Insured

Service Credit Union

Service Credit Union

6 month CD APY: 2.00%
Credit union information: Founded in Portsmouth, N.H., in 1957, Service Credit Union originally served employees of Pease Air Force Base. Today, it has grown to serve over 200,000 people throughout New Hampshire, North Dakota, Massachusetts, and even Germany.
Membership details: To become a member, you must live or work, or have family members that live or work in New Hampshire or Falmouth, Bourne, Mashpee, and Sandwich, Mass. Current members of the military, veterans, retirees, and reservists of the U.S. Armed Forces along with their families are also eligible for membership.
Where to open CD account: You can open an account online or at one of their many branches.
Minimum balance to open: $250
Maintenance fees: $0
Early withdrawal penalties: Determined by credit union

LEARN MORE Secured

on Service Credit Union’s secure website

NCUA Insured

Pros and cons of using 6 month CDs

Pros:

  • The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
  • The rates are fixed and guaranteed for the length of their term.
  • The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)

Cons:

  • Six-month CD rates are lower than those offered on longer CD investment terms.
  • To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
  • If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
  • Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.

Using a 6 month CD for laddering

A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.

Where can you open a CD account?

Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Gabby Hyman
Gabby Hyman |

Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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