Depending on how long you store money in a CD and how high the rate is, the interest rate might not keep up with inflation.Ĭonsider investing instead. Also, you could find a different bank that pays better rates on regular CDs than a certain bank pays on jumbo CDs. Banks usually pay higher rates on jumbo CDs - but not always. Regular CDs typically require a few hundred or a few thousand dollars, but you'll need around $100,000 to open a jumbo CD.
With a jumbo CD, you know exactly how much you'll earn. If you were to put that money into a riskier investment, such as the stock market, you wouldn't know how much you'd end up with in a few months or years. You're putting a lot of money into a jumbo CD. In many cases, banks pay higher interest rates on jumbo CDs than on regular CDs. For example, CIT Bank's shortest term for a jumbo CD is 2 years, but you can get a CIT regular CD with a term as short as 6 months. Some banks also offer different term lengths for its jumbo and regular CDs. The main distinctions are that a jumbo CD requires a higher deposit, and it usually pays a higher rate. What's the difference between a jumbo CD and regular CD? As a reward for placing this large deposit, you'll earn a higher interest rate than you would on a regular CD. What is a jumbo CD?Ī jumbo CD is a certificate of deposit that requires a high minimum deposit - usually around $100,000. Most banks offer varying rates for different terms and deposit amounts - typically, the longer the term, the higher the rate.Īt the CD's maturity date, you'll typically have a 10 to 14-day grace period in which you can withdraw your money and close the account or renew the term. You will, however, earn interest on the amount and have the option to collect those payments monthly or reinvest them into your CD. During that period, you typically won't be able to add additional money or access your original balance without paying a penalty. If you don't need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed annual percentage yield (APY) for the term of the CD. You can open one at almost any bank or credit union. What to look out for: Consumers Credit Union doesn't have any major downfalls, but you might earn a higher rates at another institution, depending on the term length.Ĭredit Score Good to Excellent Frequently asked questions What is a CD?Ī CD is basically a time-sensitive savings account that holds your money at a fixed interest rate for a specified period of time. Unlike most credit unions, Consumers compounds interest daily, meaning you can earn more money in the long run. Consumers makes it easier to become a member than most credit unions do - you just have pay $5 to join the Consumers Cooperative Association, then deposit $5 in a Consumers savings account. Why it stands out: Consumers Credit Union pays competitive rates on jumbo CDs, especially for longer terms. Interest compounded daily, paid monthly.Early withdrawal penalties are as follows: 60 days interest for terms of 1 year or less 120 days interest for terms over 1 year.Join Consumers Credit Union by paying a $5 membership fee to the Consumers Cooperative Association, then by depositing and keeping $5 in a Consumers savings account.Or you can join by living with a Navy Federal member, or by being a Department of Defense civilian personnel or contractor. You or a family member must have ties to the military for you to become a member of Navy Federal.
Navy Federal also offers terms for up to 7 years, while many banks cap out at 5 years. Navy Federal compounds your interest daily like most banks would, unlike manyĬredit unions that compound monthly. Why it stands out: You'll earn the highest rates with a $100,000 minimum - but you can still earn good rates with lower balances. Read Our Review Read Our Review A looong arrow, pointing right Interest compounded monthly, paid monthly.Early withdrawal penalty of 90 days dividends for terms of 3 months to 1 year 180 days dividends for terms of 1 year to 5 years 365 days interest for terms of 6 and 7 years.247 branches worldwide, including on select military bases.Join Navy Federal Credit Union as an active military member, military veteran, Department of Defense employee/retiree, or family member of any of the aforementioned groups.