Three Month CD at First Century Bank, Gainsville, Georgia
First Century Bank of Gainsville, Georgia has by far the best APY of three month CD interest rates available, standing at 1.35 percent at this time.
I’m doing a review on them because they are the best rates at this time for a place to put your short-term money, but also as a quick lesson in understanding the give-and-take related to good interest rates on safe investment products.
Normally when you’re offered the highest or close to the highest interest rate for safe investment vehicles, there’s a caveat that comes with it, and in the case of the 3-month CD from First Century Bank, that is a minimum deposit of $10,000.
There are other banks offering fairly close interest rates on 3-month CDs which require far less deposits. For example, there is one that offers a 1.10 APY which requires $0 for a deposit and no monthly fees (as of this writing). Another offers a 1.21 APY with only a $1,000 deposit required.
Banks can also offer 3-month CD rates that compete internally with one another; with smaller deposits required for a smaller interest rate.
Obviously if you have the capital on hand, there’s no complications as to the decision to make: the highest APY is the only way to go. But even then, as in the case of the 3-month CD from First Century Bank, there are other competitors who require a $10,000 deposit who have an interest rate far below the APY First Century has. So just because there’s a large deposit required doesn’t mean the interest rate is competitive. I’ve seen just today as I was writing this an $10,000 deposit only giving you 0.50 interest on a 3-month CD.
This isn’t rocket science, just ask a couple of questions when you’re searching around for the best performing short-term CD to be sure you’re getting the best rates you can. Don’t assume anything.
As far as the strategy of investing in a 3-month CD, the reason you do that is because of the unsurety of the interest rate environment we live in, along with inflationary pressures, which have already put the squeeze on consumers in regard to certain products and services.
A short-term CD allows you to get a decent return while keeping your money safe, and at the same time not tie it up in a way that inflation or rising interest rates make it a bad investment. 3-month CDs are one way you can protect yourself while building up your wealth a little and having your money available in a short time when interest rates and inflation start to rise.
Tags: cds, certificate of deposit, saving strategies, short term savings
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