Can you still get high interest CD rates in 2010? For some people yes and for others no. It really depends on what you’re trying to do with your investments. A CD offers investors the highest interest rates they can get on an FDIC insured bank account. These yields aren’t very high in 2010, but they’re still the best FDIC insured account to keep your money in.
If you’re looking to compare rates from banks, Bromoney.com is a great site to do this at. If you want to get a decent return on your money you’re going to have to stay away from short term CDs. Anything less than a 1 year term really isn’t worth it as a 1 year term is yielding about 2% right now. A 5 year term is yielding around 3.30% APY, but that’s a long time to keep your money at the bank, especially for a time when interest rates are low. You might want to keep your money in for a shorter amount of time, so that you can reinvest your cash when interest rates are higher. It’s all about when you think the Federal Reserve is going to raise interest rates again.
You could also start a CD ladder now. This is when you invest in a 1, 2, 3, 4, and 5 year CD. When each CD matures you will reinvest your fund into the best 5 year CD rate at the time. This way you’ll have funds that mature every year, and you’ll get the average 5 year interest rate over the long haul. This way you don’t expose yourself to bad interest rates of just a year.
One other thing to look out for is banks that let you get a one time rate bump. This way you can invest in a long term CD with the confidence that if rates go up, you’ll be able to adjust the rate of your CD to match the current rates.