Released: September 21, 2008

Fat yields on Certificates of Deposit

Source: Joan Goldwasser, Kiplinger's (Free Registration)

There’s nothing wrong with a little schadenfreude these days when it comes to investing in certificates of deposit. That’s because struggling banks, desperate to attract deposits, are ratcheting up CD rates, which many healthy banks feel compelled to match.

Their pain is your gain. “Consumers are getting a premium over the historical CD benchmarks,” said Scott Wallace, treasurer of Imperial Capital Bank in California.

EverBank guarantees its CD rates will be in the top 5 percent of competitive yields at leading banks—now and when you roll over a CD. Recently, it offered a five-year CD yielding 4.61 percent. But the top yielders were cresting 5 percent. Discover Bank’s five-year CD was yielding 5.12 percent on deposits of at least $2,500. E-Loan was offering a little less, at 5.01 percent with a $10,000 deposit. You could even find one-year CDs with yields topping 4 percent at a handful of banks.

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