Traditional Fixed Rate CDs

March 8th, 2007

What are traditional fixed rate Certificates of Deposit?

Traditional fixed rate Certificates of Deposit or CD are traditional fixed-rate certificates of deposite that pay interest periodically. These traditional fixed rate Certificates of Deposit are available in maturities that can range from three months to 10 years.

The issuers of these Certificates of Deposit can be from all parts of the country. The more Certificates of Deposit issues you have to choose from, the higher Certificates of Deposit yield choices you will have. Therefore, if you just go into your local bank to buy your Certificates of Deposit without ’shopping around’ for Certificates of Deposit issued by other banks of other parts of the country, you will be less likely to get the best CD rates.

Do I have to buy local Certificates of Deposit or Certificates of Deposit issued by my state?

Unlike popular beliefs – buying a certificate of deposit that is not issued in your state does NOT have the negative implications most people think. You will not be penalized for not buying Certificates of Deposit, bonds, 529 plans, or notes issued by your state. It may used to be the case that if you don’t buy from your state then you might not get some tax benefits. This is less and less true.

If your Certificates of Deposit are taxable, you will be taxed on the federal level no matter which state you are from. The only time you will ever need to consider tax implications is if you buy municipal bonds. But taxation is complicated and we will not go into that now.

The bottom line is for Certificates of Deposit, bonds, notes, etc… most investors prefer buying them from any issuers that would give them best CD rates. That is why the most popular and best Certificates of Deposit are often the high interest rate Certificates of Deposit. If you are one of these investors looking for high CD rates, then you want to have Certificates of Deposit that have significant yield advantage over the national average. Why? because most people will just walk into their local bank and buy the Certificates of Deposit there without shopping for best CD rates first.

Some savvy investors might shop around a few local banks for best CD rates or even call around. But, however they compare rates on Certificates of Deposit, they still would restrict themselves to local Certificates of Deposit.

To see a chart of Certificate of Deposit Best Rates Comparison, click here.

Certificates of Deposit