For years we’ve had our emergency fund in a certificate of deposit ladder at ING Direct, now Capital One 360. Then a funny thing happened a while ago (I don’t remember exactly when but it’s over a year now since all my CDs have matured), the interest rate on a savings account was higher than what you would get for a 12-month CD. If you look at yields today, the same holds true.
If you look at the rates at Capital One 360, you can get a 0.75% APY on your savings account. To beat that with a CD, you need to go to 60 months! Anything less than that and you’re better off keeping your money in a savings account. At Ally, the rates are better but not much better. Ally will pay you 0.85% APY on a savings account and a 12-month CD is only slightly better at 0.94% APY.
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