Ascencia, a division of PBI bank, offers a good return of 1.63 percent APY on its 6-month CD, based on a 1.62 percent return compounded monthly.

For an initial deposit the minimum is $500 and the maximum $250,000. All accounts are protected for up to $250,000. An extension of the Emergency Economic Stabilization Act of 2008, which increase deposit protection from $100,000 to $250,000 per depositor has now been extended to December 31, 2013 by Congress, and all CD accounts a Ascencia fall under those guidelines.

Here are some of the other CD rate offered at different maturities by Ascencia. All of these have a $500 minimum on the initial deposit and a maximum of $250,000.

1 Year CD (12 Months) 1.98% with a 2.00% APY
2 Year CD (24 Months) 1.98% with a 2.00% APY
2.5 Year CD (30 Months) 1.98% with a 2.00% APY  
3 Year CD (36 Months) 1.98% with a 2.00% APY 
5 Year CD (60 Months)  2.25% with a 2.27% APY

Notice that all of the CDs from 1 year to 3 years offer the same interest rate of 2.00% APY. Unless you believe rates will rise above that, the 1-year CD would be a better way to go. If you believe interest rates will decrease below that, a longer term CD would be better to invest in, as it would lock in a better rates.

Be sure you are committed to any of these CDs, as you aren’t allowed to withdraw any funds from the accounts for a 90-day period, and of course there will be the usual early withdrawal fees applied of you decided to withdraw funds after that.

A CD continues to be a good place to safely park your money, and the early withdrawal penalities are actually good for you, as it forces discipline on you unless you absolutely need the money in a major emergency situation.

While October was a poor month for CD rates, as almost all CD rates dropped, from 3-month CDs to 5-year CDs, TotalBank was still able to hang on with its Total e-CDs, to lead in the 3-month category, with a 1.64 interest rate for their online-only CD. CDs with a length of 3, 6, 9 and 12 months also offered a 1.64 interest rate, with a 1.65 APY when investing a minimum of $1,000.00.

Even though TotalBank has participated in the overall drop in CD rates for the month of October, they still continue to lead the way for 3-month CDs with the 1.65 APY they offer at this time. For all of October, 3-month CD interest rates dropped 3 basis points in the industry, which has experienced an overall plunge of 82 basis points so far in 2009.

Along with the fall in interest rates for 3-month CDs in October, 6-month CDs, 1-year CDs, 2-year CDs and 5-year CDs also fell from the month before, with the 6-month CD dropping by 9 basis point in October; the 1-year CD by 10 basis points; 2-year CDs fell by 7 basis points and 5-year CDs were off by 6 basis points.

For the 3-month CD, it fell from 0.64 percent to 0.41 percent for the month of October, one of the lowest levels in 20 years, as measured by a weekly survey performed by Bankrate during that time. 

Still, as measured in this economic climate, TotalBank continues to offer the highest-yielding 3-month CD on the market, which is has done over the last four months.

Long-term CD rates fell faster than short-term CD rates, but even so, they are still standing at record lows.

I would still look at investing in short-term CDs or other short-term investments going forward, as it relates to safety, as long-term, safer investments could and have been getting clobbered in this low-interest rate environment.

So with the money you’re investing to protect and hold, a short-term CD like the 3-month CD offered by TotalBank is a good way to go at this time.

An Add-on CD is a certificate of deposit with a fixed or variable rate where you can continue to make deposits over the term of the CD.

A little later we’ll get into the purpose for investing in an Add-on CD, but for now let’s look at some of the differences in order to understand what you’re investing in.

While there are no basic differences between a fixed or variable CD or an Add-on fixed or variable CD in and of themselves, the obvious difference is the adding of money to the certificate during its term, otherwise it functions as a normal CD with all its usual functions and protections.

The difference you’re looking for is like any other CD, where there are minimum opening deposits, and also in some cases, minimum additional deposits. There are also some Add-on CDs which require a minimum amount on a monthly basis. For example, you may be required to add $50 a month for the duration of the certificate. This isn’t bad if it falls within the parameters of your investment strategy.

As with any CD, you must be aware of the automatic renewal window, which allows only a certain amount of days to close the CD or allow it to renew.

So why bother with a CD like this at all? In our existing economic conditions, cash is the ultimate contrary asset to hold in the world right now, and so is a good time to hold some, as many people in America are starting to do.

To that end, all of us should have a stash of cash socked away for emergencies, possibly even a little higher than the usually suggested three to six months worth in normal economic times in case of unexpected circumstances. If you’re able to, I would even put away as much as nine months to a years’ worth of cash to protect yourself against the poor economy.

With that in mind, why an Add-on CD works so great is it gives you the option of putting away and building up cash in a way that forces some discipline on you. If you attempt to take it out, you’re hit with a stiff penalty, which is good in my estimation, as it keeps you from spending it on whims and not on truly unexpected things as the consequence of hard times.

One other nice thing about an Add-on CD is it allows you have a shorter waiting period for your money as the CD matures. In other words, if you pay some into it every month, that means it’ll be less time you have to wait for your money as it continues to bear interest for you and build up your personal cash reserves.

If you have a safer investment that could provide better and more flexible returns, you could then put your cash in that to continue to build it up without having to wait long periods of time with all your money. So money you put in over the last several months of an Add-on CD is only tied up for that period of time until the CD matures, and then you can decide from there what your next step will be in reference to building up your cash reserves.

The point is an Add-on CD is a great place to build up your cash on a monthly basis without tapping into it like you easily could with a money market fund or money market account. That’s a good discipline to have when it’s imperative to have some cash on hand during these difficult economic times.

A variable interest rate CD is different from the fixed rate CD in that it is tied into the movement of current interest rates – whether up or down – while the fixed CD interest rate remains the same throughout the duration of the term. So with a fixed rate CD you know what you’ll make over the term of the CD, while with a variable rate CD you won’t.

The strength of a fixed CD is its safety and predictability, while its weakness is if interest rates go up, you don’t get to participate in the better situation; thus the reason for the creation of a variable-rate CD by financial institutions to address that situation.

With a variable-rate CD, if interest rates rise, your interest rate on the CD will rise with it, and if it falls, your interest rate on the CD will fall as well, giving some downside risk. For example, if you have a fixed rate CD and interest rates fall, you will still be able to collect the higher interest rate from the CD.

What this means is we must be aware of the interest rate environment we are currently in to determine the best type of CD to buy. In our current interest rate environment the U.S. government is holding interest rates down in an attempt to stimulate exports and hopefully stimulate the creation of more jobs, or at minimum, keep them from falling even further in the manufacturing sector.

Consequently, the current low interest rates mean that have nowhere to go but up, yet there’s a lot of questions as to the political will to allow that to happen. The thing that must be considered at this time then is when interest rates will be allowed to go up; that ’s what determines your decision on the type of CD to buy.

If you believer after looking over the overall situation that interest rates will be raised by the Federal Reserve sometime soon, a variable rate CD could be a great way to invest for your safe money. You would probably get similar rates to a fixed CD, yet with upside potential. All of this depends on what bank or financial institution you do business with or buy the CD from, so all that has to be included in your decision-making process and where the interest rates will stand when the variable-rate CD is bought.

In a rising interest rate environment, when comparing a variable-rate CD versus a fixed rate CD, the variable-rate CD will do better.

Finally, check with the institution you plan on buying a variable-rate CD from as to how the interest rates are determined or measured. Banks tie the interest rates of the CD into different instruments, so you want to know what they are. Some, for instance, may track an interest index, while others may tie the interest rates to a U.S. Treasury Note. Either way, you should ask what is the determining factor in the movement of interest rates as it relates to your variable-rate CD.

8In our continuing coverage of CDs, this article we’ll talk about callable CDs, which as with all investments, offers pros and cons if you decide to invest in one.

The first thing to understand with a callable CD is it can be returned by a financial institution before the term ends, along with whatever interest has built up during that time. Along with that, there is included what is named a call-protection provision, which guarantees you will own the CD during that period at the interest rate offered. For example, if you acquired a 3-year CD, it may be callable after you hold it for six months. At that time the bank can end the deal and pay you the principle and interest for that period, without continuing on with the contract.

I want to interject here concerning the reason in talking about CDs in all the various ways you can invest in them; it’s so you can not only discover what’s available out there, but more importantly, to understand what each one has to offer and why. This helps you become a better investor, even if you decide to go outside the relative safety of CDs into another type of more risky investment.

With that in mind, what value would it be for someone to invest in a callable CD, and why would a bank or financial institution offer one?  From the point of view of the bank or financial institution, it shifts the risk concerning interest rates away from the bank to the one buying the CD. Banks are managing their loan portfolio as it applies to interest rates of their deposits, the reason a callable CD is offered.

Why would we want to do something like that? It’s all about return on investment or interest rate yields; you get a higher interest rate for bearing the risk. This isn’t risk to your money invested, but risk as to returns.

During the period of time you own the CD, if interest rates fall, you then will have the bank “call” the CD if the call-protection period is over, causing to lose the higher interest rate you originally had.

How do you determine whether to invest in a callable CD or not? It’s all related to the interest rate environment and if your research shows it’ll fall, plateau, or go up.

The downside for the investor is if the callable CD is in fact called by the bank, it would force the investor to invest at lower interest rates, receiving less on their money.

We’ve been talking a lot about CDs lately on Savingtoolbox.com, and I’m going to continue on with that theme for awhile, as in low-interest rates time like we’re in, banks usually offer up a bunch of diverse CDs to customers to provide a variety of options to suit individual needs, and also to entice them to park their money using some dangling carrots of higher interest rates and flexibility for those looking for better but safe interest returns.

Some of these CD products are called different names by different banks, and sometimes in different parts of the country, so it can become very confusing to those shopping for banking products. For example, we recently looked at what is called bump-up CDs, which can be used to take advantage of higher interest rates, but the owner has the responsibility to check in with their bank sometime in the duration of owning the CD to tell them they want to bump it up to a higher interest rate.

Now with something called a Step-Rate CD or Step Up CD, it’s a little different in that there are guaranteed interst rate increases which the buyer doesn’t have to be concerned about watching, but automatically kick in a specific intervals of the term of ownership.

For example, a 4-year CD may start off at a 4 percent interest rate for a year, and then jump to 4.5 percent after 24 months, and on up as it matures.

What you want to do with something like that is add up the interest rate offered during the term of the CD and divide them by four, or however many years you have it to get an average interest rate for the overall period you own it. That guides you as to whether it’s a good deal or not.

Many Step-rate CDs will be for less time, but still offer interest rate increases at intervals of seven months and so on, so you can still divide by the number of increases over the length of the CD and get the average interest rate for the period of time you own it.

So the difference between a bump-up CD and a Step-rate or step up CD is you’re guaranteed an interest rate at specific intervals and specific rates while you own it. Bump-up CDs on the other hand, only guarantee that you can bump up the rate sometime during the time you own it. Sometimes it’s more than one time, but with many bump-up CDs you only get one crack at it. You’re still guaranteed a minimum interest rate, but it’s less certain as to how much it’ll increase, as it depends on the market.

Step-rate CDs are for those who want certainty and guaranteed returns they don’t have to think about. Bump-up CDs are for more hands-on people who want the chance to make more on their interest rates by watching the market carefully and timing the interest rate bump for the best possible increase.

If these types of CDs are called something different when you’re checking them out, just remember the differences shown in the above paragraph and you’ll understand what they do no matter what name is applied to them.

Other than a different name, a liquid CD is really not much different than a regular Cd, with the obvious exception of having access to you capital at any time.

You may also ask, if that’s the case, wouldn’t it be the same as a money market account and savings account? The answer would be: absolutely yes – but with an exception we’ll get into in a moment.

So you don’t get confused, a liquid CD is still a CD. You buy it in the same way you would a regular CD, only now you have access to your cash when you want it.

Similar to a regular CD, a liquid CD will also be insured by the FDIC, but your allowed withdrawals will be penalty-free, in contrast to a regular CD.

One thing to keep in mind when looking at investing in a liquid CD is the terms offered by the various institutions. In some cases a bank will cap the amount you can withdraw, so the liquidity offered is limited. In these cases there should be a trade-off of a higher interest rate in comparison to other liquid CDs offered by other banks, otherwise there would be no incentive to buy one.

Other limitiations some banks include are how many withdrawals you can make within a specified time period, or some banks leave the entire withdrawal situation alone and allow you to withdraw however much you want when you want. Again, if there are restrictions, look for higher interest rates or don’t bother with them, as there’s no reason in the world to get a limited product that is offered by someone else with the same or higher interest rates with no limitations. If there’s no added incentive to buy a CD with limits on withdrawals, simply pass on it and buy one that allows unlimited withdrawals with similar interest rates.

Now the interesting thing about a liquid CD, is it might be marketed by a bank as a great alternative to a regular CD, and it is as far as liquidity goes. But the problem is there are already savings products available like a money market account and a regular savings account where you have liquidity already.

So why would you even want to consider a liquid CD if there’s no real obvious advantage to buying one? The answer is it has to do with interest rates.

If we’re in a time of interest rates falling, then acquiring a liquid CD instead of using a savings account or money market account makes sense, as it will protect you from lowered returns during that period, while having immediate access to your money.

But if interest rates are bottomed out, like they are as of this writing, a liquid CD really offers no value at all, and performs exactly the same a a money market or savings account. It won’t hurt you, but it won’t help you either. The only thing it could do is lock you in to lower interest rates, keeping you from enjoying better returns.

Consequently, in a low interest rate environment like we are in today, there is no value in a liquid CD, and if you think interest rates will rise sometime soon, you could miss out if you’re locked into a liquid CD rate.

On the other hand, if interest rates start to move up and look like they’ll start declining again, a liquid CD makes sense, and it is the only real time it adds any value to your savings strategy.

The eSavings Time Deposit is offered through Amboy Direct, the online version of Amboy Bank from New Jersey, featuring a reasonable 2.35% APY for savings of $10,000 or more and 1% APY for $100 to $9,999.  You can open the time deposit with a small minimum of just $100 and you are required to leave your money in the savings for a 12 month term.  If you would like to make additional deposits to the eSavings Time Deposit you can do so within the first six months of opening your eSavings Time Deposit, up to a maximum balance of $100,000.  Your interest rate is guaranteed throughout the twelve month term.  The only other stipulation is you can’t open an eSavings Time Deposit with money you already have saved with Amboy Direct.

It’s not in your best interest to save money in an eSavings Time Deposit if you don’t think you can leave the money untouched for at least 12 months.  If you withdraw your money before the 12 month term, you will pay a penalty equivalent to 3 months of nterest.  When making a withdrawal from an eSavings Time Deposit, you cannot withdraw just a part of the money – they require that you withdraw the full amount, and the enire balance is subject to the early withdrawal penalty.

The eSavings Time Deposit is available nationally.  They have an online application available on their Certificate of Deposits page.  Deposits and add-on deposits to the eSavings Time Deposit need to be done through ACH (electronic transfer) from a checking account held at any other, non-Amboy Direct bank.  The interest rates for eSavings Time Deposits lock in when the application is submitted.

This Time Deposit (CD) will be converted to the basic eSavings account unless you contact Amboy Direct and ask them to renew your Certificate of Deposit.  So if you are not interested in having an eSavings account with Amboy Direct, you’ll want to be sure to contact the bank for renewing your CD or withdrawing your money upon maturity.

Most certificate of deposit products require much higher minimums.  The Amboy Direct eSavings Time Deposit makes it possible to open your account with just $100.  During your first six months you can continue to deposit to the account to build it up and earn more interest.

Amboy Direct and Amboy Bank is FDIC insured up to the regular deposit limits.  Bankrate gives the financial institution 4 stars.

Although GMAC has been part of recent government bailouts to avoid bankruptcy, the bank continues to offer one of the higher 12 month CD rates
available in the US with it’s 2.95% APY.  This is down from 3% in February.
You can open a GMAC 12 Month CD with a minimum of $500, either by using their website or by calling on the phone.  You have the ability to fund the CD using an ACH fund transfer or by mailing a check.  The rates do not lock in until the money is received and the accounts are opened, so keep that in mind if you plan to mail your check the rate for the 12 month CD could change in the amount of time it takes to be mailed.  Also, if for any reason the bank takes awhile to open the account, you could have your CD opened at a different rate as well.  The interest rate at the time of application is not locked in – the interest rate on the day the account is physically created is the interest rate the CD will receive.

GMAC 12 Month CD’s have a 10 day grace period when they reach maturity.  During this 10 day window, you can close your CD without penalty to access the money, or you could choose to open a new CD.  If you withdraw your money from the CD before it matures, you’ll be hit with an early withdrawal penalty equal to 180 days of interest.

Interest earned on your GMAC 12 month CD can be posted monthly, quarterly, semi-annually or annually.

GMAC Bank offers other savings products, in addition to the Certificate of Deposits.  While they don’t have IRAs, they allow custodial and legally titled accounts, money markets and standard savings accounts.  The rates for both money  market and savings accounts have also dropped recently, although are still quite competitive, with 2.15% APY for the money market account and 2.75% APY for the online savings account.

If you have more than one account with GMAC you can transfer funds using the ACH transfer, and the process typically takes one or two days at most.

If you’re not sure which account would benefit you the most, you can use the GMAC calculator to check on different amounts of money saved in various accounts for varying lengths of time – to determine how much money you’ll earn.

ViewPoint Bank is offering two very good special rates on their certificate of deposit products.

The special rate on 60 month Certificate of Deposits with a $1,000 minimum deposit is 5.25%; while the special rate on a 12 month Certificate of deposit with a $1,000 minimum deposit is 4.25%.  (Interest rates are subject to change until you open the CD, after which the rates are locked in until the certificate reaches it’s maturity date).

If you don’t yet have $1,000 available to take advantage of the special CD promotions with ViewPoint Bank, you might consider their Regular Start Up CD or IRA – with only a $100 minimum deposit required, you can earn 4.18% on a 12 month CD or IRA.  Use this to put your money to work for you and as you grow your savings, move them to a higher yield, longer term certificate of deposit for even greater earnings.

ViewPoint Bank Absolute Checking Earns 4% Interest

Open an Absolute checking account with ViewPoint Bank with a minimum of $100, and you’ll receive a checking account that earns 4% interest (up to $50,000 balance).    There are no monthly services charges regardless of what your account balance is, no ATM charges, and free checks helping you earn more from your checking account balance.  To qualify for the 4% interest account, you just need to either sign up for direct deposit or use the free online bill pay options within your account, receive your statements online instead of through the mail (save some trees and postage!) and use your Absolute Checking Visa Debit Card 15 times per month for purchases.