Certificate of Deposit (CD) rates in the United States vary, depending on the banking institution offering CDs and the type of CD purchased, such as a six-month CD or a twenty-four month CD. Credit Unions offering certificates of deposit pay higher rates than banks. National banks offer lower CD rates than local banks. Some brokerage accounts are now offering certificate of deposits for sale. Individual Retirement Accounts (IRA) Certificate of Deposits are available for higher interest rates. Across the nation, the Annual Percentage Yield (APY) for CDs varies from .01% at on-line only banks to 4.25% at full-service credit unions.



Even with variable CD rates and CD rates lowering these certificate of deposit purchases continue to be an important financial tool because CDs are safe investments and a CD liquidates back into cash easier then other financial investments. Many senior citizens buy CDs to supplement the retirement income they receive. Before purchasing a certificate of deposit it is important to do the research and learn what the specific CD terms and conditions are for each purchase.



Questions to ask are: If this is a variable-rate CD, what are the rate changes? What is the CD maturity date? Read the fine print in the contract as the maturity date is not always the same as the type of CD. For example, a twenty-four month CD may not mature for five years. If purchasing a brokered CD, from a brokerage firm ask, who is issuing the CD? What are the CD record keeping procedures? Does the broker plan on selling the certificate of deposit to another company? If so, the consumer is at risk of losing money, esp. if the broker sells the CD for a discount. What is the exact certificate of deposit interest rate and how is that CD interest paid? What are the penalties for an early CD withdrawal? Which banking institution owns the CD? What additional information is needed? An example is inheritance of CD if the purchaser should die. The most important question to ask is does this CD purchase make sense.