After many years of bottom-of-the-barrel returns, savers finally are seeing better CD rates.
Not so long ago, 1 percent was considered a great return. But now, it’s easy to find returns well north of 2 percent — with some banks inching ever closer to the magic 3 percent mark.
As of Tuesday morning, Sallie Mae was offering 2.8 percent on a two-year CD if you deposit $2,500. Several other banks are offering returns of about 2.5 percent.
Such returns dwarf what was available just a couple of years ago. As the Federal Reserve has steadily raised its benchmark federal funds rates, banks have responded by lifting the returns on CD and savings accounts.
If you don’t have thousands of dollars lying around, don’t despair. Capital One 360, Ally, American Express Bank and Barclay all are offering two-year CDs that require minimum balances of just $1.
Of course, if the Fed continues to hike the federal funds rate — and most experts expect it will — CD rates could climb even higher. For that reason, you might not want to lock up your cash for two years.
Fortunately, you have other options. For example, you can still get up to a robust 2.5 percent on your cash by purchasing one-year CDs from any of several different banks.
And if you really don’t want to commit yet, know that EverBank is offering 1.65 percent on a three-month CD if you deposit $5,000.
To search for the right rate for you, just stop by the Money Talks News savings page.
For additional tips about earning more on your savings, check out:
- “3 Ways Savers Can Beat Inflation Without Risk“
- “This Simple Change Can Boost Your Savings Return by 450 Percent“
- “Consumers Say These Are the 3 Best Online Banks“
How do you get the most on your savings? Share your tips in comments below or on our Facebook page.