With an uncertain economy and interest rates at all time lows, you may be concerned about locking up your money in a certificate of deposit in case you need cash or rates suddenly rise. The Liquid Certificate of Deposit, a hybrid between a savings account and a normal CD, has become increasingly popular because of this uncertainty.
Regular CDs let you lock in an interest rate, but charge a CD withdrawal penalty if money is taken out before the maturation term is complete. A Liquid CD still lets you lock in a guaranteed rate for the CD term, but permits you to withdraw your money at any time with no penalty.
So what’s the catch? Since Liquid CDs give owners added flexibility, the best Liquid CD rates are typically a little lower than normal CD rates and often not much higher than the best savings account rates. Liquid CDs also typically limit the number of early withdrawals you can make – sometimes if you want any of your money, you need to withdraw all of it!
Nevertheless, Liquid CDs are an attractive option in uncertain financial times because unlike a savings account, they let you lock in a rate, but you can still get your money out if you need it or if rates rise.
Banks differ in what they call their Liquid CDs (other common names include No-Penalty CDs, Flexible CDs, or Risk-Free CDs) and they may also vary somewhat in their specific terms and restrictions, so it’s important to check with the bank for any special terms.
The below no-penalty CD is the only one currently tracked by BankFox:
Rates and accounts may differ by geography so enter your zip code for better information.
