Guide to Finding the Best Fixed Deposit Rates & Top Fixed Term Deposit Accounts
When it comes to investing personal finances, many consumers report experiencing greater variations of stress and pressure.
Even in safer investments, there are still certain risks and guidelines to consider. Still, financial investments can be crucial—and often extremely beneficial—tools to use when looking to develop savings.
Perhaps the most common way to securely develop savings is through a fixed deposit.
Image source: Mirror
Since fixed term deposit rates are meant to stay constant throughout the life of the investment, this makes finding the best fixed term deposit rates incredibly important. Ultimately, the fixed interest rate is what will determine the success of your fixed deposit, regardless if it lasts six months or six years.
Our review will cover the best fixed deposit rates in 2017 while also providing guidance for consumers who are looking to find products with great fixed term deposit rates. Even if you aren’t particularly familiar with what fixed rate savings products are, our review will explain what a fixed term deposit is and why they are such popular investment strategies.
By following our in-depth analysis on fixed rate savings products, each and every consumer will be well-equipped in finding the best fixed term deposit rates to securely develop his or her savings.
What Is a Fixed Term Deposit?
Before getting into the best fixed term deposit rates and how to find them, it’s important to take a detailed look into what a fixed term deposit is. Fixed term deposits are widely popular investment products across the U.S., Canada, Australia, England, and India. While international fixed rate savings products are typically in the form of bonds, the most common fixed term deposit in the U.S. is a CD, or a certificate of deposit.
As a fixed deposit, a CD is meant to provide a steady growth from a fixed interest rate. The biggest difference between a fixed rate savings product and a traditional savings account is that interest rates on fixed deposits are generally much higher. The sacrifice for higher bank deposit rates, however, is that fixed deposit rates come with the expectation that the money won’t be withdrawn until the product matures.
CDs will have varying lengths, usually between 1–5 years. With varying lengths of time also comes varying interest rates on fixed deposits. The longer the fixed term deposit, the higher the fixed interest rate. Finding the best fixed term deposit rates often involves looking at longer terms for fixed rate savings products.
Keep in mind that consumers within the United States will almost always equate fixed term deposits with CDs. On the other hand, international consumers may find that searching for a “fixed deposit” yields multiple different products. For our purposes, however, a fixed rate savings product will always be a CD, or a certificate of deposit.
What Options Are Available for Fixed Term Deposits?
Image source: Money
When it comes to looking for fixed term deposits, there are plenty of available options regarding interest rates on fixed deposits as well as the length and terms of the fixed term deposit itself. Understanding these varying options can go a long way in finding the best fixed term deposit rates.
When looking for the best possible rates, keep in mind that there are a handful of CD options to consider:
- Traditional. With a traditional fixed deposit, longer terms yield the best fixed term deposit rates. On the other hand, early withdrawals yield hefty penalty fees.
- Variable rate. This means that the CD is subject to fluctuating bank deposit rates, making it a riskier fixed rate savings product. Interest rates on fixed interest rate deposits that allow for automatically fluctuating rates may be beneficial if interest rates rise.
- Bump-up. Consumers with these fixed term deposits can utilize fixed deposit rate comparison tools. If another CD is offered with better bank deposit rates, the original fixed interest rate can be “bumped up” to the new, higher interest rate.
- Liquid. These fixed term deposits allow for early withdrawal without a penalty fee. However, the fixed term deposit rates are typically much lower.
- Callable. Typically, the fixed interest rate for these CDs is much higher than a traditional CD, making them a great fixed rate savings product. The only downfall is that the bank has the ability to end these CDs before they mature, decreasing the possibility of gaining interest.
- Zero-coupon. These fixed rate savings products can be purchased for much lower than face value, but interest doesn’t appear until the CD has reached maturity. Additionally, taxes need to be paid on anticipated interest until then.
- Jumbo. As the name suggests, this fixed interest rate product involves large sums of cash. Of course, these also tend to come with the best fixed term deposit rates too.
- Brokered. These CDs will come with a fixed interest rate that has been negotiated and arranged by a financial adviser. While they do charge extra in service fees, these brokered fixed rate savings products are a good way to find the best fixed term deposit rates (without doing all the legwork yourself).
When looking for the best fixed term deposit rates, keep in mind that each and every fixed rate savings product comes with its own set of terms and conditions. This can produce a lot of variation in the fixed interest rate from one CD to another. As a result, understanding the different types of CDs is a crucial step in finding the best fixed term deposit rates.
All-in-One Change Management Tools
Top Rated Toolkit for Change Managers.
Get Your Change Management Tool Today...
The Best Fixed Term Deposit Rates
Image source: The Telegraph
With so much variation in the type of available CDs, the fixed interest rate will vary greatly between each fixed rate savings product. Luckily, it is still possible to create a fixed deposit rates comparison to determine the best fixed term deposit rates.
Our fixed deposit interest rates comparison will look at the best fixed term deposit rates from a range of different products – from 1-year CDs up to 5-year CDs. By taking an in-depth look at the terms and conditions for each fixed interest rate, consumers will be well-equipped to find the best fixed term deposit rates for their financial investments.
Best 1-Year Fixed Rate Savings Products
Since these CDs have some of the shortest terms, they tend to have the lowest fixed deposit rates. Still, it is possible to get a great fixed interest rate, even with shorter terms. Our fixed deposit rates comparison found that the following 1-year CDs had the best fixed term deposit rates:
- Live Oak Bank—APY of 1.30%
While 1.30% may seem like a low fixed interest rate, this is actually one of the higher rates available for short-term investments. This is a great fixed rate savings option for those who don’t want to invest too much at once. With a minimum of $2,500, this is a relatively accessible fixed rate savings option.
- Barclay’s—APY of 1.20%
Even though the fixed interest rate is not quite as high as it could be, where Barclay’s really stands out is in its terms and conditions for its online 1-year CD. The minimum deposit is $0, making this one of the most accessible and consumer-friendly fixed rate savings options. Although it may not have one of the best fixed term deposit rates, the benefit of no minimum deposit certainly makes up for it.
Best 2-Year Fixed Rate Savings Products
With a little longer term, 2-year CDs tend to carry slightly higher bank deposit rates when compared with 1-year CDs. If you are looking for a higher fixed interest rate that doesn’t require a lengthy time commitment, these fixed rate savings products are great options:
- E-Loan—APY of 1.50%
With one of the highest APY percentages in its category, E-Loan certainly scores well on a fixed deposit interest rate comparison. The only potential downfall is that this fixed rate savings product requires a minimum deposit of $10,000, which could certainly be prohibitive for some.
- Everbank—APY of 1.46%
What is so surprising about this fixed interest rate is that it manages to keep high value while decreasing minimum deposit requirements. Investors who would prefer to keep a little more money in their pocket will be happy to know that this fixed rate savings product requires a deposit of only $1,500.
Best 3-Year Fixed Interest Rate Products
Just as with previous products, 3-year fixed interest rate products will progressively earn higher interest rates on fixed deposits. When considering a 3-year CD, these financial institutions offer the best rates:
- TAB Bank—APY of 1.62%
Without a doubt, TAB Bank offers one of the best fixed term deposit rates available. The great thing about this fixed interest rate product is that the minimum deposit is $1,000, allowing for a wider range of accessibility and less risk.
- Sallie Mae—APY of 1.60%
Though typically known for distributing student loans, Sallie Mae has a great fixed rate savings product as well. Its CD comes with a very competitive fixed interest rate, with a relatively low minimum deposit of $2,500.
Best 5-Year Fixed Interest Rate Products
By far, these CDs have the best fixed term deposit rates of the group. For those who are looking to invest large amounts of money—with increased reward—a 5-year fixed interest rate CD is a great option. Our review found the following best fixed term deposit rates:
- Popular Direct—APY of 2.0%
It seems impossible to find a fixed interest rate to beat Popular Direct’s 5-year CD. This fixed rate savings account will automatically renew after maturity, making it an easy choice for those who want to continue investing. However, keep in mind that a minimum deposit of $10,000 is required to open an account.
- Everbank—APY of 1.91%
Everbank continues to offer some of the best fixed term deposit rates, and its 5-year CD is perhaps the perfect example. Not only is the fixed interest rate very competitive, but the terms and conditions are incredibly flexible. With a $1,500 deposit, investors can take advantage of this worthwhile and affordable fixed rate savings account.
How to Find & Get the Best Fixed Term Deposit Rates
Image source: The Simple Dollar
When looking for the best fixed term deposit rates, there are a handful of expert suggestions to help ensure that you find exceptional fixed rate savings accounts. Following these tips can go a long way in getting a fixed interest rate that will help your financial investments grow as much as possible over the long term.
- Make a list to compare fixed rate savings products. Comparison shopping is a great way to make sure that you are getting the best fixed term deposit rates. Local banks and credit unions are wonderful starting points while expanding your search to national and online banks can often result in finding competitive fixed rate savings accounts. Don’t settle for the first CD that you find.
- Consider longer investment terms. While it may be difficult to set money aside for longer periods of time, longer CDs will always have better interest rates on fixed deposits. The difference in a fixed interest rate between a 1-year CD and a 5-year CD often makes longer investments worthwhile.
- Examine all CD investment options. Traditional CDs may be the most common, but they might not always have the best fixed term deposit rates. Looking at liquid or bump-up fixed rate savings options can often yield greater interest rates over time. If risk is less of a concern, these non-traditional fixed interest rate products can be extremely worthwhile.
- Utilize CD laddering. While it may be slightly more complicated, CD laddering is a great way to ensure that you are benefitting from the best fixed term deposit rates. This involves spreading investments over multiple CDs with different terms and interest rates. By using CD laddering, each fixed rate savings account matures at a different time, meaning that fixed term deposits are routinely becoming available.
Putting these expert tips to work will not only ensure that your investment is being utilized properly, but it will also ensure that you are getting the best fixed term deposit rates.
Learning how to properly invest your money is a crucial part to creating a healthy, reliable savings pool. While CDs are great options for fixed rate savings accounts, it certainly does take a little bit of time and effort to find the best fixed interest rate. For most investors, perhaps the biggest challenge when looking for the best fixed term deposit rates is aligning the terms, conditions, and interest rates along with financial goals. Being open and flexible with your investment options is a great way to start looking for fixed rate savings accounts.
Ultimately, whether you choose a 1, 2, 3 or 5-year fixed rate savings plan, the most important factor will always be the interest rate. A fixed interest rate provides a predictable, secure pattern of monetary growth. Depending upon your financial goals, the best fixed term deposit rates may either be the highest or the rates that come with the most manageable terms and conditions.
Choosing the best fixed term deposit rates not only assists financial investments to grow securely but can also help financial investments grow substantially – a crucial factor in any monetary investment.
AdvisoryHQ (AHQ) Disclaimer: Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info. Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.