Best Jumbo CD Rates August 2023 (Up to 5.15% APY)
Best Jumbo CD Rates August 2023 (Up to 5.15% APY)
Unlocking the Benefits of Jumbo CDs: High Deposits, High Returns
Here at Personal Finance Insider, our experts are committed to answering readers’ banking questions, providing unbiased product reviews, and helping you make the best decisions with your money. In some cases, we receive a commission from our partners; however, our opinions are always our own. When it comes to maximizing your savings, jumbo certificates of deposit (CDs) can be a lucrative option worth exploring.
A jumbo CD stands out from regular CDs due to its high minimum deposit requirement, which in turn allows for higher interest rates. For individuals with substantial savings exceeding $100,000, a jumbo CD can potentially offer attractive returns. While jumbo CDs are less common than regular CDs, finding ones that provide competitive interest rates or flexible terms is even more rare. If you’re interested in other types of CDs, be sure to check out our comprehensive guide to the best CD rates available.
The Best Jumbo CD Rates
As financial planning experts, we have sought out the most lucrative jumbo CD options available. Here are our top picks:
- Consumers Credit Union Jumbo CD: 0.50% to 5.15% APY
- USAA Jumbo CD: 0.05% to 5.00% APY
- Navy Federal Credit Union Standard Certificate: 0.45% to 4.55% APY
When considering a jumbo CD, it’s important to also compare other financial products in the market, as some regular CDs may offer even higher rates. Take the time to explore your options and find the best fit for your specific financial goals.
Trusting the Expert Perspective: Insights on Choosing the Best Jumbo CD
To provide you with well-rounded advice, we consulted banking and financial planning experts for their insights on finding the best high-yield savings accounts and maximizing your returns with jumbo CDs. Here’s what they had to say:
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What makes a jumbo CD good or not good?
According to Sophia Acevedo, a certified educator in personal finance and banking reporter: “The main benefit of a jumbo CD is that it can sometimes offer a higher interest rate than a regular one because you’re making a substantial initial deposit. However, if a bank pays the same interest rate regardless of how much money you deposit upfront, I would probably consider another financial institution or put my money in another type of account.”
How should someone choose a CD term length?
Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life,” suggests: “I would think about when you need the money and then compare that with what the prevailing CD rates are, and then what makes sense from a financial perspective, but also from your own personal timing perspective.”
Mykail James, CFEI, adds: “I believe in having a plan for whatever the funds are. If it’s supposed to be a house fund, and you want to wait for another two years to buy a house, that’s what you should be thinking of when you want to have this money.”
How should someone decide whether to put their money in a high-yield savings account, money market account, or CD?
Considering the different options, Tania Brown, a certified financial planner at SaverLife, advises: “So I guess we’ll start off with how much money you want to put in and the level of transactions you want to have. If you want to have any transactions, that automatically takes out CDs. Then you’re stuck between the high-yield savings and the money market account.”
Sophia Acevedo of Personal Finance Insider further explains: “Generally, I think a high-yield savings account or money market account could be good options for an emergency fund or short-term savings goals. A high-yield savings account offers a higher interest rate than traditional savings accounts at brick-and-mortar banks. Meanwhile, money market accounts might be worth considering if you want more account accessibility — several offer paper checks, ATM cards, or debit cards. CDs could be worthwhile if you don’t need access to some of your money since they have a fixed interest rate for a specific term.”
Our Methodology
At Personal Finance Insider, our mission is to help smart people like you make the best decisions with their money. We understand that “best” can be subjective. That’s why, in addition to highlighting the clear benefits of a financial product or account — such as a high APY (Annual Percentage Yield) — we also outline any limitations. We have spent countless hours carefully comparing the features and fine print of various CDs, so you don’t have to. Our selection process includes evaluating minimum opening deposits, early withdrawal penalties, and interest rates. We also consider the overall banking experience by assessing customer support availability, mobile app ratings, and ethics at each financial institution.
Frequently Asked Questions
Q: Are jumbo CDs a reliable investment option?
It’s important to remember that investing always carries some level of risk. However, jumbo CDs are generally considered a safe option. They are typically offered by reputable banks and credit unions, and your deposits are often insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per bank.
Q: What happens if I need to withdraw my money before the CD term ends?
Withdrawing money from a CD before its maturity date can result in penalties, including forfeiting a portion of the accrued interest. It’s crucial to carefully evaluate your financial needs and choose a CD term that aligns with your objectives.
Bank Trustworthiness and BBB Ratings
We understand that trust is a major factor when choosing a financial institution. To help you make an informed decision, we compared each company’s Better Business Bureau (BBB) score. The BBB rates businesses based on factors such as responses to customer complaints, honesty in advertising, and transparency about business practices. Here is the BBB score for each company:
- Consumers Credit Union: A+
- USAA: NR (“No Rating”)
- Navy Federal: NR (“No Rating”)
It’s worth noting that both Navy Federal and USAA currently have “No Rating” due to responding to previously closed complaints. Furthermore, these two institutions have recently faced public scandals. In 2020, a Navy Federal employee filed a lawsuit alleging pressure to approve loans without sufficient reason. The employee subsequently dropped the case. Likewise, the Office of the Comptroller of the Currency found that USAA broke the law by failing to establish effective risk management and IT governance programs.
