Certificates of deposits are a hard sell these days as rates are pretty low, but if you are looking to invest your extra money, a CD is still the best since it is easily accessible. Unlike an IRA, which stands for Individual Retirement Account, funds invested are tied up until retirement age. IRA funds can be withdrawn at any time when there is a real need, but the bank will charge fees for early withdrawal. Among the fees bank usually charge for an early withdrawal of an IRA are its regular bank fees and taxes.
To avoid being caught up in a situation where you need to access your IRA account, make sure you have other forms of investment that can easily be accessed like a certificate of deposit. Although bank charges a fee for early withdrawal on CD deposits, the fees are very minimal.
Here are the top 10 national high yield 1 year CD as of June 26, 2012:
1. Doral Bank – 1.15%. Minimum deposit required is $1,000.
2. CIT Bank – 1.10%. This requires a high minimum deposit requirement of $25,000.
3. Colorado Federal Savings Bank and Metlife Bank – 1.05%. The federal savings bank requires $5,000 minimum deposit while Metlife requires $25,000.
4. EH National Bank – 1.03%. Requires $10,000 minimum deposit.
5. Ally Bank – 1.02%. Zero minimum deposit.
6. AloStar Bank of Commerce – 1.01%. The bank requires $1,000 minimum deposit.
7. Barclays and Ascensia, a division of PBI Bank – 1.00%. There is no minimum deposit requirement for Barclays, but Ascensia requires $500 minimum.
8. Metropolitan National Bank – 0.95%. $1,000 minimum is required.
9. Lone Star Bank, Discover Bank, E-LOAN, Virtual Bank and Pacific Mercantile Bank – 0.90%. Minimum deposit requirement for Lone Star Bank is $1,000 and $2,500 for Discover Bank. The last three banks require a minimum deposit of $10,000.
10. AIG Bank and California First National Bank – 0.88%. AIG Bank requires a minimum deposit of $2,500 and $5,000 for California First National Bank.
The bank CD rates indicated are for informational purposes only. You can compare the above 1 year CD rates with the 12 month CD rates in May 2012. You will notice that Doral Bank has maintained its rate at 1.15%.