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Best 12 Month CD Rates Today: A Guide to High-Yield Certificates of Deposit

High-yield certificates of deposit (CDs) are a secure and reliable investment option for individuals looking to earn higher interest rates on their savings. Unlike traditional savings accounts, CDs offer fixed interest rates for a specified term, which can range from a few months to several years. The best 12-month CD rates today provide a sweet spot for investors who want to earn competitive yields without committing their funds for an extended period. This section delves into the key aspects of high-yield CDs, including how they work, their benefits, and what to consider when choosing one.

How High-Yield CDs Work

A high-yield CD is a type of time deposit that requires you to lock in your funds for a predetermined period, such as 12 months. In exchange for this commitment, the bank or credit union offers a higher interest rate than what you would earn with a regular savings account. The interest rate is fixed for the entire term, meaning your earnings are predictable and unaffected by market fluctuations. At the end of the term, you can withdraw your initial deposit plus the accrued interest or roll it over into a new CD.

Benefits of 12-Month High-Yield CDs

Investing in a 12-month high-yield CD offers several advantages, including:

Higher Interest Rates: Compared to standard savings accounts, high-yield CDs typically offer significantly better rates, allowing your money to grow faster.
Safety and Security: CDs are insured by the FDIC or NCUA, providing peace of mind that your principal is protected.
Predictable Returns: With a fixed interest rate, you know exactly how much you’ll earn by the end of the term.
Short-Term Commitment: A 12-month term strikes a balance between earning higher yields and maintaining liquidity.

Factors to Consider When Choosing a High-Yield CD

Before opening a high-yield CD, it’s important to evaluate several factors to ensure it aligns with your financial goals:

Interest Rate: Compare rates from multiple institutions to find the most competitive offer.
Early Withdrawal Penalties: Understand the fees associated with accessing your funds before the term ends.
Minimum Deposit Requirements: Some CDs require a higher initial deposit than others.
Renewal Terms: Check whether the CD automatically renews and what the new terms will be.

Comparison of Top 12-Month High-Yield CDs

Financial Institution	Interest Rate (APY)	Minimum Deposit	Early Withdrawal Penalty
Ally Bank	3.50%	$0	60 days of interest
Marcus by Goldman Sachs	3.45%	$500	90 days of interest
Synchrony Bank	3.40%	$2,000	90 days of interest
Capital One	3.35%	$0	3 months of interest

Tips for Maximizing Your CD Investment

To get the most out of your high-yield CD, consider the following strategies:

Ladder Your CDs: Spread your investments across multiple CDs with different terms to maintain liquidity and take advantage of rising rates.
Monitor Rate Changes: Keep an eye on interest rate trends to time your investments optimally.
Reinvest Interest: Some CDs allow you to compound interest, which can significantly boost your earnings over time.

For more information on high-yield CDs, visit the websites of Ally Bank , Marcus by Goldman Sachs , and Synchrony Bank .

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