How much money do you have sitting in a savings account? $500? $1,000?

Do you have plans for that money? If not, it should be in a certificate of deposit at your bank. If your bank doesn’t offer good CD rates, then you should open a CD with an online bank and take advantage of their better interest rates. If you don’t think you have enough money, you’re wrong. You can open a CD at an online bank with a single dollar.

One dollar.

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(Updated 11/6) I’ve been keeping a list of the best CD rates for certificates of deposit in the 12-month to 18-month maturity range, figuring that’s typically the sweet spot for rates. If the CD maturity is too short, banks won’t give you a good rate because it’s such a short period of time. If the CD maturity is too long, the customer is taking on a lot more inflation risk than the bank is probably paying out for. However, short term certificates of deposit still have their place:

• You’re setting up a CD ladder and you need CDs to fill up those short period slots.
• You have funds in an account that currently isn’t earning the highest yield for savings, transferring the funds will take time and cut down on your interest earned… so you might as well throw it into a short term CD to get a better rate.
• You simply don’t want to rate chase and open up a new account with each new online bank that offers a high rate, so you might as well hit up a short term rate with the bank you’re worth just to get a little extra.

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(Updated 10/9) Here is a list of the nationally available best CD rates, updated regularly. I looked at the best rates available for CDs of less than 18 months and listed the one with the highest rate. Typically the longer the term, the higher the rate, but for many online banks the best rates were for periods of shorter than 18 months. For simplicity’s sake, I put the cutoff at 18 months (some banks offer higher rates for longer terms). If you want shorter term CD rates, I have also compiled a list of highest short-term CD rates (less than 12 month maturities).

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