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    rhouse30's Avatar
    rhouse30 Posts: 306, Reputation: 1
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    #1

    Apr 15, 2008, 05:55 PM
    CD rates
    When comparing CD rates, is it just enough (to get the most interest) to get compounded cd's or should I know how they are compounded?

    Any tips will be appreciated.

    Thanks in advance.
    ISneezeFunny's Avatar
    ISneezeFunny Posts: 4,175, Reputation: 821
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    #2

    Apr 15, 2008, 05:56 PM
    Well, most of the time, CDs are compounded annually. If you find one that's compounded semi-annually or quarterly, then that'd be pretty sweet.

    I suggest you find out as much detail as possible about your CD, and compare it to other banks' CD rates to maximize your interest benefit.
    smearcase's Avatar
    smearcase Posts: 2,392, Reputation: 316
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    #3

    Apr 15, 2008, 08:12 PM
    The annual yield (APY), I believe will show the best deal since it is calculated based on interest rate and compunding frequency. And you need to determine how long you can have the money tied up for--6 months. 1 yr. etc. FDIC insurance is important.
    You will have a week or so grace period when the term is up, to do something else with the money, or in most cases the bank will renew it for the same term at a new rate (higher or lower) and then penalize you if you take it out (once the grace period is up)
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