If you are the kind of investor who is looking for high interest rates from secure investments, then jumbo CD rates will definitely catch your attention. While regular CDs are appealing because of how they are setup and how safe they are, jumbo certificate of deposit’s are even more appealing because of how high the rates of interest can be.
Jumbo CD rates come from the type of certificate of deposit investments of $100,000 or more. Without a doubt, this is a serious type of investment for people who have that kind of money to put away for a fixed period of time. Nonetheless, jumbo CDs are low risk certificates of deposit that are beneficial for anybody who chooses to invest in them.
The concept with these types of CD’s would be the same as with a regular CD, with the exception that there is lower risk and much better payouts in terms of interest. The terms that investors can be locked into can range from three months to as long as six years. Of course, the longer term, the better the interest rates at the end of the day. After all, the main reason people invest is to earn interest on their money!
The one downside to jumbo CDs is the fact that they are not FDIC insured. This is mainly because the investment for these certificates of deposit would start at $100,000 putting them out of the range for FDIC insurance. Nonetheless, you can still expect to have better potential for higher returns with these CDs than with regular certificates of deposit.
One main thing that investors should bear in mind as it relates to finding the best CD rates is that if you remove some or all of the principal prior to the maturity date, you will be forfeiting a portion of the returns you would have been able to earn if you kept the money there. Your best bet would simply be to allow your money to sit there for the duration of the term agreed-upon when you initially started out.
Jumbo CD rates will definitely give you better value for your principal; the only drawback is that you need to have a lot more money than you would with a regular certificate of deposit investment. However, if you are in the position where you can put that money away without touching it, then this will definitely be a beneficial type of investment for you.