Bank CDs Often Have The Advantage Over Savings Accounts

When the stock market falls, professionals often declare it the best time to buy. But, for most of us, it is frightening to put our hard-earned money into something that is given to so many fluctuations as of late.

There are other savings vehicles like mutual funds out there, but, those, too have their ups and downs.

The two most common risk-free savings vehicles are FDIC-backed savings accounts and Certificates of Deposits (CDs).

Savings rates are yielding on average less than half a percent, according to Bankrate.

Certificates of Deposit (CDs) generally offer a greater return on your money. In exchange, you lose the flexibility of a savings account, where you can withdraw or transfer the money. Terms start as  low as 6 months, however, you will find greater interest rates if you commit to longer term CDs.

The average rates, as of August 26, in Bankrate’s survey were:

• .41% on a 1-year CD
• 1.42% on a 5-year CD

Credit unions sometimes offer very competitive CD rates, however, membership criteria is generally restrictive. Contact your employer or trade organization to see if you are eligible.

Shop around at local banks and you may find you fare significantly better than simply leaving all of your money in one place.

Here are your CD rates for in and around Hillsborough, as of August 30.Terms vary, but most start at $250 minimun. Contact the specific banks for details.

Bank: First Constitution Bank
Address: 32 New Amwell Road
Phone: (908) 359-1776
1 year CD: 0.75%
3 year CD: 1.5%
5 year CD:  2%
Additional: Open a checking or savings account with $10,000 minimum and you can have a non-CD account that receives 1% interest.

Bank: TD Bank
Address: 380 US Highway 206, Hillsborough
Phone: (908) 359-7004
11 months CD: .4%
*Step rate CD (3 year): .4%, .5%, .75% (escalation by year)
*Step rate CD (5 year): .7%, .8%, .9%, 1%, 1.74% (escalation by year)
Step rate CDs allow you to remove money annually, within 10 days of the anniversary date, great if you are seeing better rates elsewhere.

Bank: Skylands Comunity Bank
Address: 601 US Highway 206, #46, Hillsborough
Phone: (908) 281-4009
1 year CD: .45%
3 year CD: 1%
5 year CD: 1.75% APY

Bank: Bank of America
Address: 430 Amwell Road, Hillsborough
Phone: (908) 874-6000
1 year CD: .35%
3 year CD: .75%
5 year CD: 1.35% APY

Bank: Sun National Bank
Address: 286 Rt 206 S, HIllsborough
Phone: (908) 904-0211
1 year CD: .65%
3 year CD: 1.25%
5 year CD: 1.25%

Bank: Valley National Bank
Address:  323 Route 206, Hillsborough
Phone: (908) 281-5109
1 year CD: .5%
3 year CD: 1.15% APY
5 year CD: 1.75% APY

If you know of any great CD rates locally or nationally, please post them here to share.