Which Are the Different Kinds of CD Rates?

Certificate of deposit (CD) is savings product that starts paying interest after 3 months-5 years. They pay specific interest rates in the form of Annual Percentage Rates (APR). Here below are different kind of CDs and their associated rates.

Jumbo CD Rates

When your CD balance exceeds $ 100,000, it is referred to as the Jumbo CD. Here the rates of interest are higher than small certificate of deposits. Banks generally give good rates during high federal rates related to borrowing.

Callable CD

For an investor, the callable CD signifies a high-risk proposition compared to other varieties. Here you do not necessarily get a definite rate because the issuer can call investments at any point of time. The upside of this arrangement is that you get a higher rate compared to other CDs.

Brokered CDs

With brokered CDs, you get a long-term investment scenario with variable rates of interest and high liquidity. However, it is necessary to remember that purchasing such CDs from brokerage firms signify that you need to pay a higher rate compared to bank CDs.

Short Term CD Rates

If you have some money to invest immediately that you do not require for the time being short-term CDs are ideal. Here the rates of interest are higher than savings account. Here the rate of interest is fixed so you know what you will be getting at the end of the term.

Liquid CD

Liquid CD is similar to traditional certificate of deposits but here you can withdraw some cash before the maturity period. Interest rates here vary between money-market account and its traditional counterpart.

CD Ladder

By laddering your CDs, you can minimize associated risks and maximize returns. Here you can invest money in different maturity schemes and make the most of different rates of interest.

Bear CD

When you want a certificate of deposit for hedging or speculation, going for Beer CD makes sense. Here the rate of interest fluctuates and remains indirectly proportional to underlying market value index.

Bull CD

Yields from Bull CD are high since it remains directly proportional to the market value index.

Step Up CD

Step up CD allow investors to go for higher returns related to their deposits at definite periods.

Yankee CD

Foreign CDs denominated in American dollars are the Yankee CD. For large investors they provide an ideal option.

Variable CD

A number of metrics define the rates in variable CDs. it includes market index, index of consumer price, treasury bills, and prime rates.