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• Highest 12 month certificate of deposit rates for January 2012

  If you are looking for a short term certificate of deposit say, 12 months, below are the financial institutions offering the highest certificate of deposit rates for January 2012.

  1. Alliant Credit Union 12 month CD – 1.00%APY with $1,000 minimum required to open

  2. First Internet Bank 12 month CD – 1.00%APY. Also $1,000 minimum required to open

  3. Discover Bank 12 month CD accounts – 1.00%APY. Discover Bank requires a higher minimum amount to open the CD account of $2,500. You can view previous months certificate of deposit rates of the bank here.

  4. GoldWater Bank 12 month CD – 1.00%APY. Requires a much higher amount of $5,000 minimum to open

  The rest of the certificate of deposit rates offered are way below 1.00%APY.

  For example, Ally Bank offers 0.99%APY for a 12 month CD, but it has no minimum balance requirement. Ally Bank also offers a No Penalty CD, an 11 month term CD, with no minimum amount required to open at a rate of 0.91%APY. Please note that Ally Bank is an online bank and is ideal only for those who are comfortable banking online.

  You can compare the above certificate of deposit rates with what was offered in November 2011.

   

   

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• Are Interest Income on Certificate of Deposits Taxable

  Are interest income on your certificate of deposit subject to tax?

  Certificate of deposits can be a sound portfolio. It is considered to be the safest investment one can have. The certificate of deposit rates are pre-determined and you are guaranteed to gain interest income at the end of the maturity period. The term or maturity period of a certificate of deposit could vary. The term could be from 3 months to 10 years, which most banks offer.

  Certificate of deposits are a safe haven to investors as it guarantee a fixed interest income for a specific period of time. Best of all, the certificate of deposit itself is not taxable. The interest income varies depending on how much money is invested and for how long. In other words, the shorter you keep your money in a certificate of deposit account, the lower your rate of return. However, while a certificate of deposit is tax-exempt, the corresponding interest income is not. The interest you earn on your certificate of deposit account is subject to tax.

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