Elena Terrazas Chesney
Looking for places to store your cash to outpace inflation? One risk-free option to consider is a jumbo CD, with rates that can earn you returns as high as 4.35% in a short maturity period.
CD rates have dipped slightly after the Federal Reserve lowered interest rates at its September meeting. With one or two more rate cuts likely before the end of the year, now is an excellent time to secure higher rates.
The best part about CDs? They come with fixed interest rates. Even if you lock one in and the Fed reduces rates, it won't affect you. As you can see from the Bankrate tool, you can earn excellent rates on CDs.
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What is a jumbo CD?
A jumbo CD account is practically the same as a regular CD account, with one main difference — jumbo CD accounts require a higher minimum deposit to open.
Typically, most banks require a deposit of $100,000, but this number varies from bank to bank. You'll also have shorter maturity dates, usually from six months to one year.
How do you find the best jumbo CD rates?
To find the best rate, you need to follow a few steps, including choosing the right bank and deciding which factors work best for you.
- Choose an online bank: Typically, online banks offer more competitive rates than those at traditional banks. This means you’ll likely have to forgo a brick-and-mortar bank for an online institution if you want to open one of the top-earning CD accounts available.
- Keep your cash secure: Your account should be FDIC or NCUA insured, so your money stays safe even if your bank or credit union fails. The FDIC protects up to $250,000 in individual deposit accounts, and the NCUA protects up to $250,000 per credit union member.
- Compare APY across accounts: While many jumbo CD accounts offer impressive rates, you could potentially find higher yields among other CD accounts, with varying deposit requirements and term lengths.
- Choose the right term: If you withdraw funds from your CD account before the term is through, you'll likely be charged a withdrawal fee that can offset any interest you’ve earned on your savings (unless you have a no-penalty CD).
Here are some of the top-earning jumbo CD accounts available for a range of term lengths:
Account | APY | Min. Deposit | Term |
|---|---|---|---|
4.35% | $100,000 | 12 months | |
4.30% | $50,000 | 6 months | |
4.15% | $75,000 | 12 months | |
4.10% | $100,000 | 12 months | |
4.10% | $100,000 | 12 months | |
3.95% | $50,000 | 6 months | |
3.80% | $25,000 | 12 months |
Bottom line on jumbo CD rates
Jumbo CDs are an excellent option for risk-averse savers. You'll earn a guaranteed rate of return, and even if the Fed lowers rates again in the future, locking one in now won't impact you.
Remember that if you need your money before your term expires, banks charge penalties for closing your CD before your maturity date. Only buy a jumbo CD if you're confident you won't need the money before the term expires.
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