For savers who are hoping to supercharge their savings balance, the perfect time to find a new deposit account might just be today.
Amid recent federal interest rate increases, banks and credit unions across the nation are raising deposit account annual percentage yields (APYs) to record-levels, with some institutions offering well above 4% and 5%.
One of the highest 1-year CD rates available right now: BrioDirect’s “Promo 12-Month CD.”
BrioDirect: Promo 1-year CD offers 5.25%
BrioDirect is an online bank that is a sub-brand of Webster Bank. It offers just one type of product: high-yield CDs with terms ranging from 30 days to 60 months.
Brio is currently offering one of the highest rates on the market through its promo high-yield 12-month CD. Brio’s standard rate for 1-year CDs is 0.45%, but if you take advantage of this promo, you could score a rate that’s more than 11 times that rate and over three times the national average for a 1-year CD. Note: this CD is only available for new accounts opened on or after 4/6/2023.
Key figures
Minimum opening deposit: $500
APY: 5.25%
Early withdrawal penalty: 90 days worth of interest.
Once your year is up, you have 10 days to withdraw your funds without penalty. If you do nothing, this CD will renew automatically at maturity to another 12-month CD at the standard, non-promotional rate at the time of renewal.
Should you open a new CD?
A certificate of deposit (CD) is just one of many different types of savings vehicles you can use to hit your goal. However, it does work a little differently and may not be the right fit for you depending on what you’re saving for. If you’re on the fence about opening a new CD, consider the following:
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Your savings goal: If your goal is to save for a specific goal with a predetermined timeline, a CD could make sense. Say you want to save for a down payment on a home that you plan to purchase in three years. Putting your money in a 3-year CD and leaving it untouched while it accrues interest could make it easier to hit your savings goal and ensure that when you do need the money, it’s ready for you. Depending on your individual goals, a 1-year CD may be too long or too short of a timeline.
- Other CD terms to fit your savings goal:
- Liquidity: If you’re considering a new savings account for something like your emergency fund, that’s a case where a CD may not be the best fit. CDs do not offer the same liquidity that traditional savings accounts offer. Once you agree to put your money into a CD, you’ll be expected to keep your hands off that money until the end of your term (in most cases). An alternative that could make more sense: a high-yield savings account.
- Your current savings balance: More often than not, you won’t be able to make additional contributions to your CD once you’ve made your initial deposit. If you’re a long-time saver, this might not be an issue. But, if you’re just starting to build up your savings, you might want to opt for an account that allows you to continue making weekly or monthly contributions and revisit the idea of a CD later on.
The takeaway
To get the most out of your CD, you’ll need to be sure about what exactly you’re saving for and when you’ll need to dip into those savings. The good news: CDs come in a wide range of terms, from 30 days up to ten years. If you’re not quite ready to commit to a year-long CD, you might consider test-driving a shorter-term CD first.
