Friday, 5 June 2020

Top Jumbo CD Rates for August 2018

Top Jumbo CD Rates for August 2018
13 Aug
6:43

Jumbo CD ratesiStock

In the banking world, CD stands for certificate of deposit. This is a type of savings account where you agree to put a certain amount of money in for a set period of time. In return, the bank agrees to pay you interest. You may have to pay early-withdrawal penalties if you access your money before the CD term ends.

There is a type of CD called a jumbo CD, in which you generally have to put in a minimum deposit of $100,000. Sometimes these jumbo CDs have higher interest rates than CDs where you deposit less than $100,000.

Best CD Rate Currently Available: Synchrony Bank USA – 12-Month CD – 2.45% APY

Synchrony Bank is currently offering one of the highest CD rates available on a 12-month CD. While this CD is technically not a jumbo CD, it offers a rate that is too good to pass up at a lower minimum deposit than a jumbo CD. You can earn the 2.45% APY with a minimum of $2,000 and lock in that rate for the duration of the term once the account is funded.

Your deposit is FDIC-insured up to the maximum limit.

The top jumbo CD rates

To compile a list of the top jumbo CD rates, we used information from DepositAccounts.com, which, like MagnifyMoney, is a LendingTree company. We sorted products by APY. Then, we excluded any institutions with a health rating below a B, as well as any credit unions with very restrictive membership requirements. If there was a tie between APYs, we chose the CD with a minimum deposit of $100,000. All products on this list are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), but with jumbo CDs, it’s especially important to remember that only deposits up to $250,000 are insured.

Keep in mind that other banks might offer a CD with a better APY and a lower minimum deposit than $100,000. However, the chart below reflects the true definition of a jumbo CD, which involves a deposit of $100,000 or more.

This table is updated as of August 10, 2018, but it’s always a good idea to double-check the annual percentage yield (APY) before making your choice of where to invest. Some banks on the list offer promotional APYs, so be sure to check that the rates below are still available since rates can change day to day.

Institution

CD Term

APY

Minimum Deposit Amount

M.Y. Safra Bank

3 months

1.15%

$100,000

My eBanc

6 months

1.85%

$100,000

KS StateBank

1 year

2.40%

$100,000

Interior Federal Credit Union

18 months

2.78%

$100,000

KS StateBank

2 years

2.85%

$100,000

KS StateBank

3 years

3.10%

$100,000

KS StateBank

4 years

3.29%

$100,000

Interior Federal Credit Union

5 years

3.39%

$100,000

As of August 10, 2018

Banks that offer the best jumbo CD rates

M.Y. Safra Bank

M.Y. Safra Bank

M.Y. Safra Bank holds three spots on this list. When you go to its homepage, you’ll notice the banner shows “Special CD Offers.” This means that it’s important to keep track of these interest rates to make sure you get one that is current. This page has asterisks next to online promotions, so you know which ones might not be offered for a long time.

One downside to M.Y. Safra Bank is that the website is hard to navigate and is slow to load. This could be difficult for sophisticated investors who are used to banking with ease.

For a three-month jumbo CD, the APY is 1.15%. Keep in mind there might be other banks that offer 35- or 38-month CDs for slightly better rates, but they were not factored into this chart since this category was specifically for a three-year offering.

My eBanc

My eBanc

My eBanc is an online-only bank. It’s a division of BAC Florida Bank. Unlike M.Y. Safra Bank’s, the eBanc website is much easier to navigate and has clear instructions on how to open a jumbo CD.

According to the site, My eBanc has no maintenance fees and compounds interest daily. When your jumbo CD matures, withdrawing your money is simple, although there is an early-withdrawal fee.

For a six-month jumbo CD, their APY is 1.85%.

KS StateBank

KS StateBank

KS StateBank currently has internet-only specials on their 1, 2, 3, and 4-year jumbo CDs. This month the bank has truly outstanding rates on all of their terms.

Although KS StateBank is mainly located in Kansas, they do have the option to bank online or through their mobile banking app. This allows them to reach customers nationwide.

Interior Federal Credit Union

18 Month Share Certificate Special - New Money from Interior Federal Credit Union
Interior Federal Credit Union currently has outstanding rates on its 18-month and 5-year CDs.

Becoming a member of this credit union is fairly easy. If you’re not eligible through regular eligibility requirements such as employment, family relatives, association with partner organizations, etc., you can join the New Mexico Wildlife Federation when you apply to become a member.

on Interior Federal Credit Union’s secure website

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The difference between jumbo and regular CDs

As mentioned previously, you can open a CD with less than $100,000. You can even get CD rates comparable to the ones above, with a lower minimum deposit requirement. Of course, the more money you put in a CD, the more interest you can earn, but if you don’t have $100,000 to open a jumbo CD, it’s important to know you do have other options with lower minimums.

Withdrawal penalties on jumbo CDs

According to a recent survey, the penalties for withdrawing your money from your CD early could be serious. Some banks will even take part of your principal as a penalty.

Below are the most common penalties, according to the survey:

  • 3 month CD: Three months of interest
  • 6 month CD: Three months of interest
  • 1 year CD: Six months of interest
  • 2 year CD: Six months of interest
  • 5 year CD: A year’s worth of interest

So, it’s important to be confident that you want to put your money in a CD. When you do this, you’re making an agreement with the bank to leave it there for a set period of time. If you’re unsure if you want to tie up your money for a long period of time, consider a high-yield savings account instead.

How jumbo CDs are taxed

It’s important to know that the interest you earn on your jumbo CD will be taxed as interest income, not as capital gains income.

This means that your bank or credit union will send you a 1099-INT form at the end of the year to show how much interest you earned in your jumbo CD and you will be taxed on that.

Are jumbo CDs safe?

According to the U.S. Securities and Exchange Commission: “Certificates of deposit are considered to be one of the safest savings options. A CD bought through a federally insured bank is insured up to $250,000.”

Some people prefer investing in the stock market over CDs because you can often get higher rates of returns; however, the stock market is a riskier bet, and returns are not guaranteed like those associated with CDs.

CDs are not affected by the whims of the stock market. The interest rate you agree on with your bank is the rate you will get. That interest rate, however, may not outpace inflation, meaning you may not really earn much, if anything, over time.

Final thoughts

If you have over $100,000 and want to invest it in a jumbo CD, you have several options. Like the chart above shows, you can choose many different terms and durations for your jumbo CD. Just be sure to research the bank you invest with so you know you’re putting your money with a top-rated institution. Also, be sure that you’re comfortable with putting your money in a CD long-term because there are often penalties for withdrawing your money early.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Cat Alford

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Source: https://www.magnifymoney.com/blog/earning-interest/top-jumbo-cd-rates/

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