NEW YORK (RateWatch) – The days when you were stuck with the rates offered by your local bank are long gone, as numerous online-only and national banks now allow you to open an account no matter where you live. So if you’re not pleased with the rates you’re getting at the banks or credit unions in your town, it may be time to look online.
Last week we looked at the best savings accounts from internet-only banks and the results were surprising: Many of these accounts had rates more than five times the national average for a savings account. As we see today, it’s the same story for CDs, though to a lesser degree. You can improve on your brick-and-mortar rate by going online, with many banks offering rates at more than twice the national average yield for a 12-month CD, currently 0.536% according to RateWatch data.
As before, these rankings also include each bank’s rating from Weiss Ratings, which measures the strength and safety of financial institutions. A shaky bank should be of particular concern to anyone with money in a CD there: If a failing bank is taken over by another institution, the new owner can change the CD rate mid-contract. And while all of these banks are insured by the Federal Deposit Insurance Corp. in case of a total collapse, that protection only covers up to $250,000 of assets.
Here, then, are the top 10 highest rates offered on standard 12-month CDs by online banks, along with the bank safety grade given to them by Weiss Ratings. For the rating of your own bank, visit the TheStreet’s bank safety section.