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CDs often have a larger minimum deposit required.On the other hand, savings account interest rates can fluctuate based on the prime rate.

Some financial institutions, such as JPMorgan Chase, offer CDs with terms as short as one month or as long as 10 years. When you open a CD, you will get a set interest rate and a fixed term, typically ranging from 3 months up to 5 years. Both are either FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) insured for up to $250,000 per account holder, per account type.īut there are some significant differences you should understand before deciding where to put your money. Why CDs Differ from High-Yield Online Savings AccountsĬDs and high-yield online savings accounts both currently offer interest rates from roughly 1% APY up to 4% APY and sometimes even higher. Orman’s new guide explains the basics of CDs, how they differ from traditional savings accounts and how to get the best rates. Rising interest rates and the growth of online banks with low fees and higher interest rates, however, have changed that. Her new guide to CDs explained: “Ever since the financial crisis began in 2008, it has generally not been possible to earn much of an APY (annual percentage yield) on most CDs.” See: Suze Orman Cautions Against Investing Emergency Funds in Two Common Places - Here’s Whyįind: 3 Things You Must Do When Your Savings Reach $50,000 And that includes investing in certificates of deposit, or CDs. Picture Perfect/Shutterstock / Picture Perfect/Shutterstockįinance guru Suze Orman recently offered up a take regarding the silver lining of rising interest rates - faster ways to save.