High net worth investors may have a difficult time finding enough institutions to cover all of their CD needs. This site is focused on providing some options. We will feature federally insured rates from banks (FDIC) and credit unions (NCUA).
However, be prepared for some work. Setting up CDs these days is not always easy. Some financial institutions can be set-up as easily as a phone call or fax, but many require some sort of on-line application.
CDs are generally insured up to $250,000, but there are some ways to extend that utilizing joint accounts and trusts. There are good resources on this, but here is an article that covers it pretty well, .
Certificates of deposit come in a view flavors. Most people stick with traditional, fixed-term CDs, but you may be able to increase your yield a bit with callable CDs, step-ups or bump-up CDs.
Callable CDs are insured up to the federal insurance maximum, but the bank has the option of closing the at given periods. So you might find a bank offering a 10-year CD at 3.50%, with 6-months of call protection. This means the bank has the option of closing your CD and returning the principal and accrued interest after 6-months. You, however do not have that option. So you must be willing to own the CD for the full 10-year period.
These are CDs where the bank has pre-defined periods at which the CD rate will move up. Usually the start rate is lower than a fixed CD at the same level, but the average of the steps is higher. They are often odd-term CDs such as a 16-month where the rate steps up every 4-months.
Bump-up CDs have an option to increase the rate if the bank moves their rates up on the same term. So let's say a bank is offering a 2-year bump-up at 1.00% with a one-times bump. Six months into the CD, the bank raises their 2-year rates to 1.35%. You can decide to raise your rate to 1.35% at this point or wait to see if rates increase further. The problem arises when the bank offers this on an odd-term and they raise their other rates, but not the odd-term.
Keep an eye on the blog, we'll post future articles, new rates, and stuff there.