Consider yourself warned… The Federal Reserve just cut interest rates by another 0.50%, meaning that it’s just a matter of time until the interest rate on your online savings account drops. Again. If you have extra money sitting around, now might be a good time to think about locking in a decent rate of return by purchasing CDs.
As I write this, ING Direct is offering 4.25% APY on 12 months CDs. This is actually quite competitive, and you can’t beat the convenience if you already have money deposited with them. You might also want to look at Jim’s updated list of certificate of deposit rates, which lists the top rates for CDs in the 6-18 month range.
And while we’re on the subject of CDs, be sure to check out my previous article on building a CD ladder. It takes a bit of time, but it’s definitely worth the effort if you want to maximize your returns.