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Online banks and credit unions typically offer higher interest rates than the average Certificate of Deposit (CD). The most competitive 18-month CDs currently offer more than 5% Annual Percentage Yield (APY).
The top 18-month CD rate is 5.20% APY from Credit Human. Other financial institutions also provide high 18-month CD rates, making it essential to compare options.
When considering an 18-month CD, it's crucial to assess opening requirements and early withdrawal penalties. By locking in a rate for a specific term, you can earn fixed returns over the 18-month period.
CDs are considered low-risk investments, offering guaranteed returns as long as funds remain in the account for the agreed-upon term. While CDs provide security, potential gains are limited compared to riskier investments like the stock market.
Our top picks for 18-month CD rates include Credit Human at 5.20% APY, Alliant at 5.15% APY, TAB Bank at 5.13% APY, First Internet Bank of Indiana at 5.09% APY, and MYSB Direct at 5.08% APY.
It's important to note that early withdrawal penalties vary among institutions, so understanding these terms is crucial to making an informed decision. Additionally, FDIC or NCUA insurance protects deposits up to $250,000 per depositor in a bank account.
Considering factors beyond interest rates, such as minimum deposit requirements and early withdrawal penalties, is essential when selecting an 18-month CD. While CDs offer a guaranteed rate of return, they lack the flexibility of savings accounts and may incur penalties for early withdrawals.
Comparing 18-month CD rates to high-yield savings rates reveals the benefits of CDs, including a fixed rate for the entire term and protection against market fluctuations. Building a CD ladder with varying term lengths can help mitigate risks and take advantage of current high rates.
Ultimately, the decision to invest in an 18-month CD depends on individual financial goals and risk tolerance. By weighing the pros and cons of CDs against other investment options, individuals can make informed choices to maximize their savings.
