For those of you who want to save your cold hard cash and want better rates, listen up. Nobody has time for those sorry bank savings rate. Consider CD laddering. Check out the rates at Ally Bank and Discover bank. These are both online accounts. They provide better rates because there is no brick and mortar buildings to pay for. Currently, Ally bank is offering 2.55% for a 12-month CD, and Discover offers 2.50% for a 12-month CD. The difference between these two is the amount you need to get started. Ally bank has a smaller requirement to open a CD. I think it is whatever you can afford, say $50-$100 bucks or so. Discover has a $2500.00 requirement.
I keep my 8 months emergency fund in a Discover account. I also keep some cash savings in my Credit Union bank but I like to stow most of it in a place that’s not as convenient. This way I forget about it so to speak. So, I created a $2500.00 CD and continue to create a CD every quarter. This is my way of slowly creating a CD ladder. This way a CD will also mature each quarter after a full year. I will just continue to keep letting each on mature over time. After a years time, I will have one available to me each quarter should I need it. Of course I can cash them out any time, I just wouldn’t make that periods interest. I wouldn’t do that though unless it was an absolute emergency because I’m all about making free money.
A regular savings account with Discover yields an APY of 2.10% so it’s not bad but hey, why not add a bit more if I can. The APY varies at times. I just looked at mine and mine are currently at 2.65% APY. Shop around, just don’t take my word for it. The tricky thing to look out for is the minimum amount required to open the CD. I think Ally bank is great for the minimum amounts so if you don’t have the $10,000 to start the laddering with Discover, then start small at Ally bank. The key word is it’s a start.