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Interest Rates on CD’s

In my internet research I found a wide range of interest rates available for CD’s. The amount of money you could make from a CD depended for the most part on how long you were willing to leave the money in the CD. A longer term of investment earned the investor a higher return. Of course, if you have more money to start with, you could get a better rate of return for investing more money to start. There was also some difference in the rate of return between different sources of CD’s. Here is a list of some of the typical rates I found (for an investment of $1000):

Banks                         3 Month CD (APY)   6 Month CD (APY)   1 Year CD (APY)

IndyMac Bank                        5.25%                         5.50%                         5.15%

Wells Fargo Bank                    2.00%                         2.75%                         3.25%

Washington Mutual                  1.10%                         2.55%                         3.30%

World Savings                         3.52%                         4.61%                         4.82%

Bank Of America                    2.15%                         2.40%                         3.15%

Allstate Bank                           2.15%                         2.30%                         4.50%

Digital Federal Credit Union     3.80%                         4.25%                         4.55%


In all cases, IndyMac Bank was my best option. With $1000 invested in a one-year CD, my return would be $51.50 with IndyMac. In the worst case, I could have invested with Bank of America and received a 3.15% interest rate. At the end of one year, that would have gotten me $31.50. With the yield on IndyMac’s 3 month CD at 5.25%, I am making a better interest rate, but the actual yield is smaller than the APY, so my return after 3 months would be a little less than $13.12.