Top Jumbo CD Rates for December 2017


iStock
In the banking world, CD stands for certificate of deposit. This is a type of savings account where you agree to put a certain amount of money in for a set period of time. In return, the bank agrees to pay you interest. You may have to pay early-withdrawal penalties if you access your money before the CD term ends.
There is a type of CD called a jumbo CD, in which you generally have to put in a minimum deposit of $100,000. Sometimes these jumbo CDs have higher interest rates than CDs where you deposit less than $100,000.



In this review we’ll cover:
The top jumbo CD rates
The difference between jumbo and regular CDs
Withdrawal penalties on jumbo CDs
How jumbo CDs are taxed
Are jumbo CDs safe?
Final thoughts




The top jumbo CD rates
To compile a list of the top jumbo CD rates, we used information from DepositAccounts.com , which, like MagnifyMoney, is a LendingTree company. We sorted products by APY. Then, we excluded any institutions with a health rating below a B, as well as any credit unions with very restrictive membership requirements. If there was a tie between APYs, we chose the CD with a minimum deposit of $100,000. All products on this list are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), but with jumbo CDs, it’s especially important to remember that only deposits up to $250,000 are insured.
Keep in mind that other banks might offer a CD with a better APY and a lower minimum deposit than $100,000. However, the chart below reflects the true definition of a jumbo CD, which involves a deposit of $100,000 or more.
This table is updated as of Dec. 6, 2017, but it’s always a good idea to double-check the annual percentage yield (APY) before making your choice of where to invest. Some banks on the list offer promotional APYs, so be sure to check that the rates below are still available since rates can change day to day.





Institution CD Term APY Minimum Deposit Amount




M.Y. Safra Bank 3 months 1.16% $100,000


M.Y. Safra Bank 6 months 1.42% $100,000


My eBanc 1 year 1.77% $100,000


My eBanc 18 months 1.80% $100,000


Veridian Credit Union 2 years 2.02% $100,000


M.Y. Safra 3 years 2.11% $100,000


M.Y. Safra Bank 4 years 2.25% $100,000


Kinecta FCU 5 years 2.50% $100,000




As of Dec. 6, 2017

Banks that offer the best jumbo CD rates
M.Y. Safra Bank
M.Y. Safra Bank holds four spots on this list, which means it has competitive rates for jumbo CDs of a few different terms. When you go to its homepage , you’ll notice the banner shows “Special CD Offers.” This means that it’s important to keep track of these interest rates to make sure you get one that is current. This page has asterisks next to online promotions, so you know which ones might not be offered for a long time.
One downside to M.Y. Safra Bank is that the website is hard to navigate and is slow to load. This could be difficult for sophisticated investors who are used to banking with ease.
For a three-month jumbo CD, the APY is 1.16%. For the six-month jumbo CD, the APY is 1.42%. The APY on the three-year jumbo CD is 2.11% and for the four-year jumbo CD, the APY is 2.25%. Keep in mind there might be other banks that offer 35- or 38-month CDs for slightly better rates, but they were not factored into this chart since this category was specifically for a three-year offering.
LEARN MORE  
My eBanc
My eBanc is an online-only bank. It’s a division of BAC Florida Bank. Unlike M.Y. Safra Bank’s, the eBanc website is much easier to navigate and has clear instructions on how to open a jumbo CD.
According to the site, My eBanc has no maintenance fees and compounds interest daily. When your jumbo CD matures, withdrawing your money is simple, although there is an early-withdrawal fee.
For a one-year jumbo CD, the APY is 1.77% and for an 18-month, the APY is 1.80%.
LEARN MORE 
Veridian Credit Union
Veridian Credit Union is headquartered in Waterloo, Iowa, has 30 locations and over 700 employees. You can become a member of the credit union if you live in the area or if you’re a registered user of Dwolla, an e-commerce company which is available to anyone.
You can see current rates on jumbo CDs on the Veridian rate sheet . Keep in mind that several of the rates listed are current specials and might not be available long term. At the time of this writing, Veridian Credit Union has a very competitive rate on a two-year jumbo CD for 2.02%.
LEARN MORE 
Kinecta FCU
Kinecta Federal Credit Union is located in Manhattan Beach, Calif. Membership is open to anyone who lives in the area or anyone who pays a $10 membership fee to become a member of the Consumers Cooperative Society of Santa Monica.
The lender has very competitive rates on jumbo CDs. A five-year can earn 2.50%.
LEARN MORE 


The difference between jumbo and regular CDs
As mentioned previously, you can open a CD with less than $100,000. You can even get CD rates comparable to the ones above , with a lower minimum deposit requirement. Of course, the more money you put in a CD, the more interest you can earn, but if you don’t have $100,000 to open a jumbo CD, it’s important to know you do have other options with lower minimums.


Withdrawal penalties on jumbo CDs
According to a recent BankRate survey , the penalties for withdrawing your money from your CD early could be serious. Some banks will even take part of your principal as a penalty.
Below are the most common penalties, according to the survey:

3 month CD: Three months of interest
6 month CD: Three months of interest
1 year CD: Six months of interest
2 year CD: Six months of interest
5 year CD: A year’s worth of interest

So, it’s important to be confident that you want to put your money in a CD. When you do this, you’re making an agreement with the bank to leave it there for a set period of time. If you’re unsure if you want to tie up your money for a long period of time, consider a high-yield savings account instead.


How jumbo CDs are taxed
It’s important to know that the interest you earn on your jumbo CD will be taxed as interest income , not as capital gains income.
This means that your bank or credit union will send you a 1099-INT form at the end of the year to show how much interest you earned in your jumbo CD and you will be taxed on that.


Are jumbo CDs safe?
According to the U.S. Securities and Exchange Commission: “Certificates of deposit are considered to be one of the safest savings options. A CD bought through a federally insured bank is insured up to $250,000.”
Some people prefer investing in the stock market over CDs because you can often get higher rates of returns; however, the stock market is a riskier bet, and returns are not guaranteed like those associated with CDs.
CDs are not affected by the whims of the stock market. The interest rate you agree on with your bank is the rate you will get. That interest rate, however, may not outpace inflation, meaning you may not really earn much, if anything, over time.


Final thoughts
If you have over $100,000 and want to invest it in a jumbo CD, you have several options. Like the chart above shows, you can choose many different terms and durations for your jumbo CD. Just be sure to research the bank you invest with so you know you’re putting your money with a top-rated institution. Also, be sure that you’re comfortable with putting your money in a CD long-term because there are often penalties for withdrawing your money early.


The post Top Jumbo CD Rates for December 2017 appeared first on MagnifyMoney .