IRA CD rates and savings account rates are pretty low at this time, but if you are resourceful enough, you will still find good bank deals out there. Let’s take for example the following:
1. For a 1 year IRA CD:
The best 1 year IRA CD rate there is available is offered by GE Retail Capital Bank. The bank promoted it as the “Optimizer+Plus” currently at 1.05%APY. However, this IRA CD rate is not for everyone. If you do not meet the required minimum balance of $25,000.00, then you better look for other IRA CD rates at other banks.
Another bank offering the best IRA CD rate is CIT Bank. It currently offers 1.05%APY on a 1 year IRA CD and requires the same amount as minimum balance.
2. For Savings Account:
The best savings rate currently available is that offered by My Savings Direct, a division of Emigrant Bank which was established in 1850. My Savings Direct is currently offering a savings rate at 1.00%APY, which is considered to be the highest savings rate so far. And, they won’t slap you with fees or service charges for opening an account.
Now, deciding which account to open is really a matter of a future need. The 1 year IRA CD rate may be tempting to go for, but if you are looking at a future need you may have to sacrifice a bulk of your money since it will be tied up for a year in the bank. However, banks allow early withdrawal for a fee, but this could lower your profit margin. Going for a savings account would be the best option if you want cash right away whenever you need it. You can withdraw money from a savings account anytime you want as it is not tied with the bank for a period of time unlike certificate of deposits.
Whatever it is, saving or investing the extra money you have is a very good plan. The situation is very different with one who has money being set aside and who doesn’t. Money set aside is a comfort zone in times of need.