GOBankingRates Study Uncovers the Best CD Rate in Every State

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Oct 28, 2014, 07:15 ET

LOS ANGELES, Oct. 28, 2014 /PRNewswire/ -- California boasts the best CD rate in the nation, a 5.13% APY¹ that's 10 times the average certificate of deposit rate today. A new study from leading personal finance website GOBankingRates uncovered the highest CD rates in every state across four popular terms, finding that rates vary widely by region.

California's rate is for a six-month CD, while the second-highest rate for that term is 1.35%, offered by a Massachusetts institution.

GOBankingRates study shows the best CD rate in every state.

CLICK HERE to see the highest rate in your state

Additional findings:

The average U.S. CD rate is 0.51% APY, five times the average savings account rate.²
The highest rate in each term surveyed belongs to a credit union – except for the six-month 5.13% APY, which belongs to California-based Pacific City Bank.
Increases in term length are not proportionate to increases in the yield; longer-term lengths result in diminishing increases to the yield.

"Regional variations were a lot more dramatic back in the '80s, when average CD rates were hovering around 17%. But in a low-rate environment, savers need to do more than just find the best rate; they need to use it strategically – perhaps even break some rules," said Christina Lavingia, GOBankingRates' managing editor.

Though account holders are often advised not to withdraw funds before maturity, at risk of incurring a penalty, closing a CD early can actually earn a saver more interest in some cases, according to Neil Stanley, president of Bank Performance Strategies.

"Some CD customers are investing in long-term CDs while expecting to cash out early, regardless of rising rates," Stanley told GOBankingRates. "For example, if a 1.80% five-year CD is withdrawn after a year, the depositor will net 0.90% for the holding period; meanwhile, the same bank may be only offering 0.45% on a one-year CD."

For tips on squeezing more out of a CD, go to bit.ly/CD-squeeze.

About GOBankingRates

GOBankingRates.com is a personal finance and consumer banking website that connects consumers with the best credit unions, banks, interest rates and money-saving tips.

Methodology: Rates, compiled from GOBankingRates and Informa Research Services databases, are accurate as of Oct. 10, 2014 and subject to change at any time, at the discretion of individual institutions. Other terms and conditions could apply.

¹ Six-month term
² Average considered six-month, one-year, two-year and five-year terms.

Contact:

Connie Lundegard
[email protected]
310-297-9233 x112

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SOURCE GOBankingRates