The key to making money is all about finding the least risky investment that returns the highest interest rate. One of the best ways to accomplish this is by finding a high yield jumbo CD.
For those of you who are new to investing, a jumbo CD is a certificate of deposit that requires a large deposit, usually $100,000 or more. A certificate of deposit is a deposit you make with your investment firm or bank that requires you to leave your money invested for a specified period of time, anywhere from three months to six years or longer.
Ok, so now that that’s out of the way, here are a few tips for finding the ones that pay out the most amount of cash.
In the world of CDs, your investment adviser may not be the best avenue for finding high paying jumbo CDs. Why? Because investment brokers only have access to brokered CDs. These CDs are hovering right around 0.35% for a one year investment. There are plenty of better opportunities out there. Simply plugging “Jumbo CD Rates” into your Internet search browser will net you a list of opportunities you can take advantage of including the purchase of 2 year CDs at 2.50%.
Money talks, especially when it comes to financial institutions. So, the next time you find yourself looking for a place to put your money, take it to your local bank and plop it down on the counter. Ask to place it in a high yield jumbo CD. At first, you will probably be offered their standard fare, a CD that returns around 0.50%, but don’t settle. Ask to speak to the branch manager. If they still refuse to offer you a better deal, simply walk away and look for another bank who will give you what you are looking for. You can find other banks in your area by visiting the FDIC website.
5 year CDs often pay higher rates than shorter term CDs. Why? Because you are forced to leave your money in the CD for a longer period of time, unless you want to pay an early withdrawal fee. The key to investing in a longer term CD is to find one that is paying a higher rate and has a lower early withdrawal fee. The reason behind this is so if rates begin to rise, you can withdraw your money early without paying too much and place it into a shorter term CD. And, if the rates stay stable or drop, your money will be earning a higher rate than if you’d placed it into a shorter term investment. The only real problem with this is if the bank goes under. Your investment is protected thanks to FDIC insurance, but there might be a little time invested if it ever comes to having to make a claim.
Credit unions are a often-overlooked goldmine when it comes to high jumbo CD rates of return. Because credit unions aren’t trying to turn a profit for their stakeholders, they pay more money out to their members, usually in terms of offering lower interest rates on loans and higher interest rates on CDs.
