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Best 4-Years CD Rates

If you’re keen on growing your money, then you probably know that saving is crucial. The aspect of growth comes in the form of accumulated interest. However, ordinary savings accounts may not attract much.

Saving on CDs, on the other hand, will earn you relatively higher interests, regardless of the market conditions. In this article, we’ll point you to some of the best CD rates for 4 years to grow your money.

  • APY
  • Minimum Deposit
  • Terms
  • 0.55% - 0.60%
  • $500
  • 1 - 5 Years
  • 0.25% - 0.25%
  • NONE
  • 1 - 5 Years
  • 0.60% - 0.80%
  • $2,000
  • 1 - 5 Years
  • APY
  • Minimum Deposit
  • Terms
PenFed CU
  • 0.50% - 0.75%
  • $1,000
  • 1 - 5 Years
  • 0.50% - 0.65%
  • $1,000
  • 1 - 5 Years
Comenity Direct
  • 0.60% - 0.90%
  • $1,500
  • 1 - 5 Years
  • APR range
  • Fees
  • Terms
  • Amounth
  • Unemployment protection
Bank 1
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 2
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 3
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No

Table of Contents

What is a Certificate of Deposit (CD)?

Certificate of Deposits are savings accounts that allow users to earn a fixed interest upon maturity of a specific term. 


Users can choose between a 1-month to a 10+- year term, depending on the bank or financial institution. 


CDs are federally-insured. That guarantees the safety of your money and the agreed interest regardless of the possible downside in the financial market. 


Upon maturity, you can withdraw the money with all the earlier agreed interests. However, doing so before full maturity will see you pay a penalty, usually the loss of a few months’ interests. 


This will work to your advantage should there be a fall in the market rates. However, you’ll lose should there be a rise in rates. 

How CD rates are calculated?

CD rates are calculated on a compound interest basis. Banks (or other financial institutions) will pay you a fixed interest at the end of your agreed term. 


Once you’ve chosen your preferred term and principal amount, the lender proceeds to compound your earnings up to maturity.


You’ll, therefore, know beforehand how much you’ll gain when buying a CD account. 


Different institutions will offer different rates depending on the conditions of the financial markets. A fall in the markets will mean lower yields.


An institution looking to attract new customers will offer higher rates, translating to higher yields. 


If you’re looking to earn even higher rates, long-term CDs are your best shot. Leaving your money untouched for long means forgoing multiple risks and needs. Hence, the higher rates.

Hot Tip:

An institution looking to attract new customers will offer higher rates, translating to higher yields. 

Choosing the right CD rates

Choose the best CD rate depending on the following aspects;


  • Interest rates – Higher interest rates mean faster money growth. Pay attention to what your bank offers as its APY. Use this to compare what other institutions are offering and choose the best rate. 
  • Minimum deposit – check that the amount you wish to invest on CDs corresponds with what the institution accepts as its minimum deposit. Most institutions accept a minimum deposit of $1000.
  • Penalties – how much will it cost you to make a pre-mature withdrawal should you have an emergency? Compare what different institutions charge and choose one that seems fair. 
  • Joining fees – the institution you decide to buy CDs from will likely ask for some joining fees. You want to make sure you go for an affordable one. 


It’ll also be good to compare different institutions’ compounding frequencies. This is mostly monthly, or daily for a few banks. Here, the rule of the thumb is – the more frequent, the better. 


It’s crucial to note that your emergency funds are not meant for CDs. Only use the money you’ve set aside and are intending to leave untouched for a period. 

To stay secure, you can purchase different CDs with different maturity periods. This way, you’ll rarely run out of cash for those unforeseen needs. 


And, you can also choose to buy a new CD every time one matures with the proceeds earned. This way, you’ll begin the cycle again.


However, as you reinvest, take note of a rise or fall in rates and react accordingly.


You should further note that your CD interests are taxable. However, you’ll only be taxed at the end of the term you choose.

Short-Term CD vs Long-Term CD

Finding a CD with the right maturity date for you is the first step to your financial goals. A term too short might have you missing out on impressive interests. 


Terms too long, on the other hand, can have you paying penalties when you need the money and withdraw prematurely.


Short-term CDs have a maturity term of one year and less. They normally come to inform of a 3-month term, 6-month term, and a 1-year term.


Short-term CDs come with lots of flexibility. You have access to your funds should you meet any expected financial needs upon the short maturity. 


Should your CDs mature when you have no immediate need for cash, you can as well choose to reinvest the cash. 

Long-term CDs, on the other hand, range between 4 to 5 years. They are known to have higher interests should you be disciplined enough to leave them untouched till maturity. 


Banks and credit cards usually have the ‘raise your rate’ program that will see your rate increase once or twice throughout the period. 


Please note that penalties are always steepest on long-term CDs. You, therefore want to maintain a high level of commitment lest you incur huge losses. 


So which one should you choose between long-term and short-term CDs?


Go for short-term CDs if you’re seeking improved flexibility and access to your money. Long-term CDs, on the other hand, are meant for individuals looking to leave their money untouched for long, and grow wealth significantly with the higher interests. 


Either way, both are excellent avenues for saving and growing your money. They only call for wise decision-making, and commitment. 

Pros and Cons of CD rates for 4 years


High interest – CDs especially long-term CDs attract higher interest compared to traditional savings accounts. 

Higher penalties – withdrawing your money before maturity attracts penalties. Long-term CDs especially attract the steepest penalties. Early withdrawal means losing a couple of months’ interests. Choosing to liquidate your cash before maturity due to unforeseen bills will only have you pay the early withdrawal penalty.

Guaranteed payment – You’ll know beforehand how much you’ll earn at the end of your term. The interests are constant and immune to changes in the financial market. A downward trend in interests won’t affect how much you’ll be paid. You’ll, therefore, enjoy predictable results unlike in the stock market that’s full of uncertainties.

Lower earnings -  CDs generally attract lower interests compared to stocks and bonds. Depending on the market conditions, investing in stocks and bonds will get you higher returns over time.

Funds are safethe money you invest in CDs is federally-insured. They insure up to $250,000 so you eliminate possible losses. For higher amounts, individuals often buy different CDs from different institutions so they are all secured.

Fixed returns Returns for CDs are fixed. They are calculated way before maturity and you’ll know them beforehand. This plays out to your disadvantage when there’s a rise in the financial markets.

An excellent way to save – CDs, especially long term CDs will help you save for long-term projects like buying a car, building a house, or sponsoring your education. You can easily work out how much you’ll need and leave the money secured on CDs.

Requirements to Qualify

The requirements for opening a CD account are similar to those needed for an ordinary savings account. 


Once you choose your preferred institution, gone through its policies and requirements you’ll move to choose your preferred term and principal amount. You’ll then show some form of identification to prove you’ve attained the legal age dictated by your state.


That’s mostly your driving license, National ID, or valid passport. Other personal information such as your names, social security number, and address is also needed. 


You’re also required to be a legal resident of the United States.


As you shop around for a suitable institution, prioritize banks and credit unions. They have some of the best rates and the security of your money is guaranteed. 


You could also go for no-penalty CDs. These give you maximum flexibility so you can withdraw anytime you wish to without having to pay any penalties. They normally attract lower rates, usually lower than the national average. 


Once you have your account approved, there’s one more thing you can’t forget – building your CD ladder. That involves buying multiple CDs from different institutions. 


This way, like we earlier noted, you’ll have different CDs reaching maturity closely to each other so you can comfortably take care of unforeseen expenses.

Frequently Asked Questions (FAQ)

Long-term CDs attract higher rates compared to short-term CDs. But such also calls for commitment and forgoing any positive change in interests.

Traditional savings accounts and money market accounts. They boast lots of flexibility and convenience. They’re also an excellent way of scaling your earnings in case of a rise in rates in the financial markets.

CDs are federal-insured for up to $250,000 to guarantee the safety of your money.

As long as you let your money stay to maturity, CDs are some of the best places you can keep your money.

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