On July 18, 2024, a federal court issued a stay preventing the Department of Education from operating the Saving on a Valuable Education (SAVE) plan. The decision has significant implications for millions of borrowers relying on this program.

Today, the Department of Education released guidance for what borrowers could expect in the coming weeks and months.

Specifically, the Department of Education highlighted:

• Borrowers currently enrolled in SAVE will be placed in administrative forbearance, meaning no payments are required and no interest will accrue.
• This administrative forbearance will NOT count towards Public Service Loan Forgiveness Or IDR Loan Forgiveness
• Loan servicers have temporarily paused processing of IDR applications until they can ensure applications are processed correctly.
• Online loan consolidation and income-driven repayment plan requests are paused, borrowers must use paper forms.

Immediate Impact On Borrowers

In the wake of the court’s ruling, borrowers enrolled in the SAVE Plan are being moved into forbearance. During this period, payments are not required, and no interest will accrue on their loans. However, the time spent in forbearance will not count toward Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment (IDR) loan forgiveness.

Loan servicers are tasked with notifying SAVE Plan borrowers about their forbearance status. Those who have already received bills for August will also be moved to forbearance, ensuring that payments are not necessary during this period.

The Department of Education and loan servicers will provide regular updates to borrowers affected by the court’s decision. 

During the forbearance period, borrowers will not receive credit toward PSLF. However, there are options to potentially “buy back” months of PSLF credit for time spent in forbearance due to the court’s stay. Eligible borrowers can make extra payments to cover these months, provided they meet specific criteria, including having an outstanding loan balance and approved qualifying employment.

Options For Borrowers

Borrowers affected by the stay have several options. They may choose to remain in forbearance or contact their loan servicers to change repayment plans. Those nearing the end of their time on PSLF may need to explore alternative routes to ensure their payments count toward forgiveness.

For those looking to enroll in the SAVE Plan or other IDR plans, the recent court ruling has temporarily halted online applications on the Federal Student Aid website. Borrowers can still apply by submitting a PDF application to their servicer via upload, mail, or fax. However, processing of these applications is currently delayed due to the stay.

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Money Pickle is a financial advisor matching service.

The relationship between you and your financial advisor can be critical to your long-term financial success. Unfortunately, too many investors are matched with the wrong type of advisor, for various reasons. Perhaps you found an advisor through a friend, or based on a hunch. 

Money Pickle believes that finding a financial advisor matched to your unique situation should be a convenient, quick, and free process. The use modern technology to match individual investors with trusted financial advisors. We explain how the Money Pickle process works in this full review. 

What Is Money Pickle? 

Money Pickle is an online platform that connects individuals with vetted financial advisors. These advisors must be comfortable with providing high-quality financial advice via Money Pickle's 1:1 video conference format, and the advisor is responsible to cover the costs. Advisors benefit from the opportunity to meet with prospective clients. There is no obligation for the individual to become a client of the advisor.

What Does It Offer?

Money Pickle uses technology to match individuals with vetted advisors at no cost to the investor. Here's a closer look at how the process works. 

Matching Survey

The process to find a matched advisor begins with a short quiz, which you can access from Money Pickle's website homepage. You'll be asked for some basic information, such as your age (from a range), the financial topics that matter the most to you, e.g., General finance, retirement, investments, estate planning, etc., your annual income, the types of investments you currently hold, and your approximate portfolio size. You'll also be asked whether you prefer to receive a consultation via video chat or phone call. 

Appointment Scheduling

Once you've completed the initial survey and provided your email and phone number, you'll be given an opportunity to book a preferred appointment time on Money Pickle's secure online calendar. To help you find the best possible match, Money Pickle will ask a few more qualifying questions. For example, they'll want to know what type of investor you consider yourself to be: Conservative, Moderate, or Aggressive, if you're looking for a one-time meeting or a long-term relationship, and whether you would like to discuss Estate Planning in your meeting. They'll also ask for your Zip Code, in case there is a qualified advisor located nearby. 

How Does Money Pickle Match Individuals With Advisors

According to Money Pickle, the company only matches clients with fiduciary financial advisors. A fiduciary advisor is legally bound to act in the best interests of their clients. Furthermore, all advisors must be considered by the Financial Industry Regulatory Authority (FINRA) to have a clean industry history, a Series 65 or Series 66 Registration, and at least 5 years of experience. 

When looking for a match, Money Pickle considers your stated amount of assets and your location and willingness to work with a remote advisor. For example, if your investable assets are $150,000, you won't be matched to an advisor who only works with clients who have over $1 million to invest. 

Important Note: Remember that advisors are paying Money Pickle for access. And Money Pickle discloses on its website that the more money an advisor pays them, the more likely they are to appear in the results page when you're searching for a match. That said, all advisors are vetted, regardless of their advertising budget. 

Are There Any Fees?

There is no cost to the individual for using Money Pickle's services to find an advisor, nor are there any fees for the initial video or phone call consultation. Money Pickle's costs are covered by the advisors, who use their advertising dollars to find potential clients via Money Pickle's platform. 

Only when you decide to establish an ongoing relationship with an advisor (separate from Money Pickle) will you then be required to pay fees (to the advisor). Remember that there is no obligation to continue with an advisor after the free consultation. 

How Does Money Pickle Compare?

There are several other services that match clients with vetted-financial advisors. Two of the most recognizable Money Pickle alternatives are WiserAdvisor and Smartasset. 

WiserAdvisor offers an advisor matching service, along with several financial calculators and educational tools. The company is more established than Money Pickle, having been in business since 1998. Like Money Pickle,  it connects you with vetted financial advisors after you complete a simple form. There is no cost to use its matching service. If you would rather browse through a larger pool of advisors, you can browse WiserAdvisor's online directory. The company has a solid TrustPilot rating of 4.1 out of 5 stars, with over 300 reviews.

Smartasset is an online resource that connects millions of Americans to helpful financial tools and calculators. It also offers an advisor matching service, which is free to use. Smartasset works with Fee-only and Fee-based advisors who have been throroughly vetted. While some advisors may have minimum investment requirements if you choose to pursue an ongoing relationship, there is no investment minimum to use Smartasset's matching services. 

How Do I Open An Account?

Money Pickle makes it easy to begin their matchmaking process. As mentioned, you can connect to a short online quiz from its website homepage. Once that's completed, you'll be given an opportunity to book a video or phone appointment at a time that's convenient for you via Money Pickle's secure online calendar. Once you've completed your free consultation, there is no obligation to continue working with your advisor. 

Is It Safe And Secure?

Yes. Money Pickle's website is fully encrypted, and the company employs best industry practices to keep your information confidential. While you are sharing some personal information with them, such as your name and email address, it's a free service, so Money Pickle isn't storing any credit card or bank account details. 

How Do I Contact Money Pickle?

You can fill out a contact form on Money Pickle's website, email cam@moneypickle, or call or text to 1(248) 520-8333. There is a chat feature on the website, with an estimated response time of a few minutes. I reached out to them on a Saturday, and was asked to provide my email address so that they could reply to my question at a later time. 

Is It Worth It?

Many people need the assistance of a financial advisor, but are unsure where to turn or don't meet the portfolio qualifications many advisors require. If you're struggling to find quality financial advice, Money Pickle's free service may be the answer. Its user-interface is incredibly easy to use, and there is no obligation to continue working with your advisor beyond the initial consultation. 

Money Pickle is probably not for you if you're uncomfortable with virtual meetings, and they cannot match you with an advisor in your local area. Also, remember that Money Pickle is being paid by the advisors they are recommending on their platform. 

Check out Money Pickle here >>

Money Pickle Features

Here are the ten largest banks in the United States, ranked by their assets.

There are many different ways that you can choose a bank. You might look at a bank that offers a wide variety of products and features that you're interested in, particularly high interest rates for its savings accounts, or exceptional customer service. A bank that has physical locations near you might also be worth checking out, though the prevalence of online banking may make this a less important factor.

The size of a bank may also play a role in helping you decide which financial institution to bank with.

While bigger may not always be better, it can be nice to know that a bank has been around for a while and has experience managing a large amount of money, two shared characteristics among all of the top 10 banks in the U.S. Plus, there is a sense of "too big to fail", which may protect you more than the FDIC currently does.

Top 10 Banks In The U.S. By Assets

One of the most common ways that banks are measured is by their total assets. Standard & Poor’s (the same company behind the S&P 500 stock index) regularly maintains a list of the top banks in the world. Here is a look at the top 10 banks in the U.S. in 2023, as ranked by total assets managed as of Mar. 31, 2024.

1. JPMorgan Chase

The largest bank in the U.S. is JPMorgan Chase, with total assets of around $3.5 trillion. Often referred to simply as “Chase Bank,” JPMorgan Chase has been formed over the years through mergers and acquisitions. Headquartered in New York City, Chase traces its roots back to The Bank of The Manhattan Company, formed by Aaron Burr in 1799.

Here's our full review of Chase Bank.

2. Bank of America

Headquartered in Charlotte, North Carolina, Bank of America is the second-largest bank in the U.S., with total assets of just over $2.55 trillion. Bank of America was founded in 1998 with the merger of BankAmerica and Nations Bank, which was at the time the largest bank merger in American history.

3. Wells Fargo

Wells Fargo is the fourth and final of the "Big Four" banks in the U.S., with total assets of nearly $1.74 trillion. It was established in 1852 during the California Gold Rush by two of the founders of American Express. Wells Fargo is headquartered in San Francisco.

4. Citigroup

Citigroup, which is often stylized as “Citi” or “Citibank,” has an asset value of over $1.69 trillion, making it the nation's third-largest bank. Headquartered in New York City’s Lower Manhattan, Citigroup was formed in 1998 from the merger of Citibank and Travelers Group.

Here's our full review of Citibank. 

5. U.S. Bancorp

U.S. Bancorp, commonly referred to as “U.S. Bank,” is headquartered in Minneapolis. U.S. Bancorp currently operates under the second-oldest continuous national bank charter, which was originally granted in 1863 to the First National Bank of Cincinnati (later acquired by the company that is now U.S. Bancorp). U.S. Bancorp has total assets of nearly $669 billion.

US Bank completed its merger of Union Bank last year, adding to its assets.

Here's our full review of U.S. Bank. 

6. PNC Financial Services Group

PNC Financial Services Group, commonly known as “PNC Bank,” jumped up to the sixth-largest bank in the U.S., with total assets of around $561 billion. PNC traces its history back to 1852 as the Pittsburgh Trust and Savings Company and is headquartered in Pittsburgh.

When First Republic Bank collapsed and was acquired by JP Morgan Chase, PNC benefitted from clients who didn't want to be at that major bank.

Here's our full review of PNC Bank. 

7. Goldman Sachs

The Goldman Sachs Group was founded in 1869 and is headquartered in New York City. Goldman Sachs is an investment bank, and it’s well known for its expertise in advising businesses on mergers and acquisitions. Goldman Sachs manages total assets of around $1.4 trillion.

However, it's banking assets are at $549 billion, making it the seventh largest bank. It's most well known for it's Marcus brand.

8. Truist Financial Corporation

Truist Financial Corp. is headquartered in Charlotte, North Carolina, and has around $526 billion in assets. Truist Bank was founded in 2019 with the merger of BB&T and SunTrust banks, but it traces its roots back as far as 1872 with the founding of the Branch and Hadley merchant bank in Wilson, North Carolina.

Here's our full review of Truist Bank.

9. Capital One

Capital One Financial Corporation is a bank that specializes in credit cards, auto loans, checking, and savings accounts. It is currently headquartered in McLean, Virginia, which is about 14 miles outside of Washington, D.C. Capital One has total assets of just over $478 billion.

Read our full Capital One review here.

10. TD Bank

TD Bank is a full-service bank with branches up and down the east coast. They’ve been around for over 150 years, with roots back to 1852 in Maine. 

TD Bank has total assets of just over $369 billion, placing them tenth on the list of biggest banks in the United States. Its interesting to note that while it's #10 on this list, it's 10% of the size of the largest bank: JP Morgan Chase.

Read our full TD Bank review here.

Is A Bigger Bank Better?

While you may not want to put your money in a fly-by-night financial institution, size isn’t the only important factor in choosing a bank. Instead of just electing to work with the biggest bank out there, you should instead look at the products, services, and features offered to find the right bank for you. All of the banks on this list are financially sound, but you’ll need to take a closer look at each to see which is the best fit for your needs, regardless of its size.

The Bottom Line

Banks can be measured and compared in many different ways, and one of the most common yardsticks is the size of a bank by its total assets. The top 10 U.S. banks in 2024 all have over $360 billion in assets, and several of the top banks on the list have trillions of dollars of assets. 

While size isn’t everything, it may be a good indicator of a bank’s stability, product variety, and accessibility, making it an important factor to consider when switching banks or choosing where to park your money for the first time.

Stocks vs. bonds is the ultimate debate in portfolio asset allocation.

If you think you’re satisfied with everything in your investment portfolio, there’s probably something wrong with it. All financial assets have prices that move; they go up and down. A well-designed portfolio will allow you to take advantage of the upside volatility while protecting you from the downside. That is why most modern investment portfolios contain stocks and bonds. 

However, when stock prices are soaring, owning bonds can seem like a drag on the portfolio. On the other hand, when stock prices fall month after month, owning more bonds suddenly seems like a great idea. 

Whether you favor the growth potential of stocks or the steadiness of bonds, both could have a place in your portfolio. Here is what you need to know about the differences between stocks and bonds.

What Are Stocks? 

Stocks are a form of equity ownership. When you own a stock, you own a share of a company. As a partial owner of the company, you are entitled to a share of profits (dividends) that are distributed according to the rules set up by the company. Investing in stocks can help you to build wealth over time. 

A stock’s value rises and falls over time based on the company’s current and future profitability outlook. Some companies, like General Mills and General Electric, have had publicly traded stocks for nearly a century. Other companies, like Pets.com, were publicly traded for just a few years. 

As a whole, investors may be willing to “overpay” for a company with high growth potential or they may underpay for companies that produce solid returns quarter after quarter. 

Despite the volatility and unclear pricing, stocks tend to produce high returns (compared to other assets) over time.

You make money from stocks when the stock pays a dividend or when you sell the stock for a profit. If you don’t want to research and buy individual stocks, you can buy ETFs or mutual funds, which allow you to own hundreds of stocks with just one ticker symbol.

What Are Bonds? 

Bonds are a type of loan from you to the government or a company. When you lend money, the borrowing institution agrees to repay the principal balance of the loan with interest.

Bonds are sometimes called fixed-income assets. They are referred to as fixed income because the borrower is expected to repay the loan on a fixed schedule over time. 

If the borrower is good at repaying their debts (like the U.S. government), the interest rate on bonds they issue will tend to be low. That’s why Treasury bills (T-bills), and Treasury notes tend to have low-interest rates. 

I bonds, which are also issued by the government, have elevated interest rates right now because inflation is high. Often, I bonds have rates lower than those on T-bills or other types of debt. 

In addition to loaning money to the federal government, you can lend money to cities through municipal bonds, or to companies through corporate bonds. These tend to have higher interest rates, but the borrowers may be at a higher risk of default. If a corporation has a very high risk of defaulting on its loans, the bonds issued by the company are called junk bonds (or high-yield bonds if you’re feeling generous).

Of course, you can sell bonds on a secondary market to earn a capital gain or to free up more cash immediately. However, most investors like to hold bonds to earn income over time.

Which Is Better, Stocks Or Bonds? 

Most investors will need to include both stocks and bonds in their portfolios to invest successfully. 

Bonds provide more stability while stocks provide more growth potential. Both are important for investing success.

Are Stock And Bond Prices Correlated? 

While bonds tend to have lower returns than stocks, bonds also have lower volatility on average. That means that bonds rarely rise or fall in value as much as stocks. Sometimes investment professionals will go so far as to say that bonds “keep a portfolio afloat” when stocks have particularly poor performance.

While bond prices move less than stock prices (on average), stock and bond prices tend to move in the same direction. Over the past 100 years, most of the time when stock prices fell, bond prices fell as well, just not as much. Likewise, when stock prices rise, bond prices tend to tick up. 

However, there are several examples where stock and bond prices have moved in opposite directions. For example, between 2000 and 2003, stock prices fell precipitously when the dotcom bubble burst while bond markets rallied.

Although stock and bond prices move in the same direction much of the time, the volatility profiles of these asset classes allow investors to maintain a diverse asset allocation. This can lead to fewer loss years, and in some cases, even additional gains.

How Can I Get The Right Mix Of Stocks And Bonds? 

Figuring out the right mix of stocks and bonds depends on your: 

If you’re an experienced investor, you may know what asset mix you want to maintain. Maybe you’re aiming for an asset allocation of 20% bonds and 80% stocks or 40% bonds and 60% stocks. 

However, less experienced investors may not know what the right mix is. The right mix for your best friend may not be the right mix for you. 

These are three ways you can figure out the right blend of stocks and bonds:

1. Consult A Financial Planner

If you’re not sure how you should invest your money, you may want to consult a Certified Financial Planner (CFP). Personal Capital, Wealthfront, Betterment, and other companies all offer CFP consultations to paying customers. 

Some financial planners will manage your money for you, while others may collect a fee in exchange for services rendered. Either way, the financial planner should offer guidance about a target asset allocation.

2. Use a Target Date Fund

Some target date funds are loaded with unnecessary fees, so you will need to be careful with this strategy. That said, if you are investing for retirement and you have access to low-cost target date funds, they can keep you invested in a suitable blend of stocks and bonds. 

Typically, target date funds add more bonds as you get closer to your retirement age. This cuts back on volatility, but it allows you to keep a certain portion in stocks, so your money can continue to grow. Target date funds are not ideal inside taxable brokerage accounts.

3. Consider a Robo-Advisor

Robo-advisors are designed to efficiently manage assets for users. The sophisticated algorithms keep users at their target asset allocation while also minimizing taxes. 

Robo-advisors such as Betterment or Wealthfront charge a small fee, and the fee may be worthwhile if you don’t care to manage your asset allocation on your own.

Favor Decision Over Perfection

You could spend a long time studying the markets to decide on the perfect mix of stocks and bonds, but you’ll never have the perfect blend for every scenario. Nonetheless, an imperfect decision with well-executed actions will almost always beat indecision. 

A portfolio of stocks and bonds mixed with savings and investing over time has produced winning results for over 100 years.

You have time to figure out your stock to bond ratio, but you can’t get back time in the market.

Are you searching for the best 12-month CD rates? Maybe you want to lock in your money for just a little bit in order to get a better rate? With one year CDs, you can get higher rates than a normal savings account, but the lock-up period is still short enough to work for most emergency funds.

To gain traction with savings, you need a system and some tools to help your money grow faster.

A 12-month (one year) CD from an online bank can help provide both. We break down our top picks of the best 12-month CD rates below!

Our Top Picks for the Best 12-Month CD Rates Right Now

We've taken the time to review your best options for CDs, bringing you the top options for 12-month CDs.

Daily rates change, but the banks below consistently offer solid rates and good features.

Note: The savings offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all savings companies or all savings offers available in the marketplace.

NexBank - 5.15% APY

NexBank is the largest privately-held bank in Texas and it dates all the back to 1922. 

Right now you can get 5.15% APY on a 12-month CD option in partnership with Raisin! There's only a $1 minimum to open an account!

Check out NexBank 12 Month CD here >>

Alliant Credit Union - 5.05% APY

Alliant Credit Union offers short term and long term CDs with competitive APYs. 

Right now you can get 5.05% APY on a 12-month CD option!

Their CD have a $1,000 minimum deposit requirement, no maximium deposit, no monthly fees, and easy funds transfers!

Live Oak Bank - 5.00% APY

Live Oak Bank offers short term and long term CDs with competitive APYs. 

Right now you can get 5.00% APY on a 12-month CD option! It does require a $2,500 minimum to open.

Plus, their CD has no monthly fees, and easy funds transfers!

Read our full Live Oak Bank review here.

First Financial Northwest Bank - 4.90% APY

First Financial Northwest Bank is a Washington-state based bank hat has partnered with Raisin to offer solid CD rates nationwide. This bank has been around for over 100 years, and has a solid track record of banking offerings.

Right now you can get 4.90% APY on a 12-month CD option!  There's only a $1 minimum to open an account!

Check out First Financial Northwest Bank here >>

American First Credit Union - 4.90% APY

American First Credit Union is a credit union that has partnered with Raisin to offer solid CD rates nationwide.

Right now you can get 4.90% APY on a 12-month CD option!  There's only a $1 minimum to open an account!

Check out American First here >>

Barclays Bank - 4.85% APY

Barclays Bank offers short term and long term CDs with competitive APYs. 

Right now you can get 4.85% APY on a 12-month CD option!

Plus, their CD has no minimum balance requirements, no monthly fees, and easy funds transfers!

Read our full Barclays review here.

Rising Bank - 4.80% APY

Rising Bank is the online bank of Midwest BankCentre. It focuses on delivering competitive high-interest savings accounts and CDs. 

Right now you can get 4.80% APY on a 12-month CD option!  There's a $1,000 minimum to open an account, and interest is credited toward the CD every three months.

Read our full Rising Bank review here.

Check out Rising Bank here >>

Crescent Bank - 4.80% APY

Crescent Bank is a New Orleans based bank that offers both local and nationwide banking options. They currently offer some of the most competitive online certificates of deposit available. And they regularly run CD promos with exciting rates.

Right now you can get 4.80% APY on a 12-month CD option!  There is a $1,000 minimum to open a CD.

Read our full Crescent Bank review here.

Check out Crescent Bank CDs here >>

Western Alliance Bank - 4.75% APY

Western Alliance Bank is one of the largest commercial banks in the United States, and they are now offering an amazing 12 month certificate of deposit. In partnership with Raisin, you can open a 12-month CD account at Western Alliance Bank online.

Right now you can get 4.75% APY on a 12-month CD option!

SkyOne Credit Union - 4.75% APY

SkyOne Credit Union is a credit union that has partnered with Raisin to offer solid CD rates nationwide. They recently re-launched their 12 month CD at a very competitive rate. Plus, it's a no penalty CD!

Right now you can get 4.75% APY on a 12-month CD option!  There's only a $1 minimum to open an account!

Read our full SkyOne Federal Credit Union review here.

Check out SkyOne here >>

Discover® Bank - 4.70% APY

Discover Bank offers a short term and long term CDs with competitive APYs. 

Discover® CDs have a $2,500 minimum to open and an early withdrawal penalty of 3 months interest.

Right now, you can earn 4.70% APY on a 12-month CD at Discover. That's better than most savings account options out there!

Read our full Discover Bank review.

Quontic - 4.50% APY

Quontic Bank is a leader in online banking and one of the few Community Development Financial Institutions that work directly with the public.

Quontic has great rates on savings accounts, a competitive high-yield checking account, and they offer a full ranges of high-yield CDs.

Right now you can get 4.50% APY on a 12-month CD option!

Read our full Quontic Bank review here.

Other 12 Month CD Options

What Is a 12-Month CD?

A CD, which is short for certificate of deposit, can pay higher savings rates than a regular savings account.

In exchange for the higher interest rate, you agree to leave your money alone for a specific period of time.

A 12-month CD, of course, then ties up your money for a full year.

During those 12 months, your money can grow at a higher rate compared to a high-yield or money market savings account.

You can buy CDs that mature in as little as three months. You can also buy 5-year CDs.

For many young investors, a 12-month CD offers a nice in-between: It’s long enough to generate decent interest but not so long you’re tying up money indefinitely.

12-Month CDs and Momentum

The higher interest yield on your savings makes a 12-month CD attractive, but it has other benefits, too.

Since you typically have to pay a fee negating some of your earned interest when you withdraw from a CD before it matures, a 12-month CD offers a nice incentive to leave your money alone.

Yes, life is unpredictable. Sometimes emergencies happen and you have to withdraw early from your CD. In a true emergency, you probably wouldn’t be too worried about losing the interest.

Under normal circumstances, though, placing an extra speed bump between you and your savings helps you leave it where it is.

You can’t just open your banking app and make a quick, free transfer as you could with a regular savings account.

Leaving your money alone keeps you from spending it, allowing your money grow.

For example, a $2,000 CD at 2.75 percent would have a $2,055 balance at the end of 12 months. No, earning $55 in interest a year won’t finance your retirement.

But savings is all about momentum:

• Leave the money alone for another year, and it could become $2,111.
• In five years, you’d have $2,290.
• After 10 years your $2,000 would be $2,623.

Still not impressed? Let’s introduce the third dimension: If you could buy a new $2,000 CD every year, you’d be adding exponentially to your potential for savings growth. You could get to a point at which the interest alone coming off your CDs could fund new CDs.

Talk about momentum!

The Moving Parts of a 12-Month CD

A CD combines three key elements:

• Your principal: This is the amount you’re saving. A $2,000 CD has $2,000 in principal. Be sure to choose a principal amount you can afford to live without for the duration of the CD’s term.
• Your time commitment: You can find a wide variety of CD term lengths. Most common time periods are 3-month, 6-month, 12-month, 18-month, 24-month, 36-month, 48-month, and 60-month. You won’t be able to withdraw your money without penalty during the term.
• Your interest rate: You’ll usually find much higher interest rates at online banks compared to your neighborhood branch of a big national bank. Higher rates, of course, equal more growth in savings.

A CD has other key features you’ll want to know about:

• Minimum deposits: Many banks and credit unions require a minimum deposit for your CD to earn the advertised interest rate; others allow you to invest any amount.
• Yield: This is the amount in interest your deposit will earn.
• Date of maturity: A new CD has a maturity date. Before the CD matures, you typically can’t withdraw funds without penalty.
• Penalties: The fees you’d pay for early withdrawal can vary from bank to bank. Most banks will charge you at least part of the interest the CD had already earned.
• Automatic reinvestment: When they reach maturity, many CD balances will roll over into a new, identical CD unless you direct your bank otherwise. The bank should notify you about the upcoming maturity date in time to let you decide.

When You Should Get a 12-Month CD

Before buying a CD of any term, make sure you can do without the money you’re investing throughout the term.

None of us can predict the future. Unexpected expenses will arise. Some may require you to withdraw your funds early.

But you can take some precautions by controlling the controllable before you buy a 12-month CD:

• Have an emergency fund: If you don’t have a few months worth of living expenses available in a savings account, take care of that before buying a CD.
• Make sure bills are up to date: If you’re on the verge of defaulting on a student loan, or if you’re a month or two behind on a credit card, deal with those issues first. You could spend more in interest and late fees than you’ll earn with your CD.
• Consider potential expenses: When your odometer reads 125,000 miles and your mechanic has been recommending a new timing belt since you passed 90,000 miles, consider tackling that expensive repair, or at least setting aside the money, before investing in a CD.

Keep an Eye on Interest Trends

One of the key advantages of a CD is its locked-in interest rate.

No matter what the Fed decides at its next meeting, your traditional CD’s interest rate will remain fixed throughout its term.

This can work to your advantage when interest rates are on the decline. As rates fall over the next year, you’ll continue earning at today’s rates throughout the term of your CD.

On the other hand, a rising interest rate can cost you a higher yield.

In six months, your locked-in CD rate may be lower than a new CD’s rate. You may want to wait a few months before buying in or to consider a more complex CD, which we’ll go into below.

A 12-month CD is short enough to insulate you from the long-term effects of rate fluctuations.

Still, it’s something to think about as you shop and compare rates.

Right now, the average 12-month CD is yielding 1.86% APY, according to the Federal Reserve. All of the 12-Month Term CDs on our list are much higher.

More Complicated CDs

So far we’ve kept it simple:

• term lengths,
• interest rates, and
• principal investments

If this post were a course, it might be called CDs 101.

Naturally, you can do a lot more with CDs to add flexibility, growth potential, and insulation against a changing market for interest rates. And traditional banks might have more options than online banks.

But, what else is out there?

Liquid CDs

With a liquid CD you can avoid the withdrawal penalty if you cash out early, either because you need to access the principal or you found a better rate elsewhere.

These CDs won’t yield as much interest as a traditional CD, but they can help you save if you expect rates to rise significantly during the CD’s term.

Bump-Up CDs

If you buy a long-term CD and rates start to increase, a bump-up CD lets you adapt your CD to the new climate without having to start over. You can exercise your bump-up option to increase your rate.

These CDs tend to yield less interest, but they can also help you avoid missing out on rate increases down the road.

Step-Up CDs

A step-up CD’s rates increase periodically without you having to exercise an option. While this sounds like a great idea, especially with a longer-term CD, each new rate applies only to the time period between increases and not to the entire term.

Step-up CDs can start with low interest rates and end with higher rates, but the overall yield is typically comparable to a traditional CD’s.

Brokered CDs

A bank or credit union sells its own CDs, and you’ll need to open an account to start saving.

Serious savers who want a wider variety of CDs to choose from may need a broker’s help. Otherwise they may need to manage a dozen separate accounts.

If you ever go this route, make sure your broker checks whether the CD is FDIC-insured before you buy in.

CD Laddering

A common technique known as CD laddering can add more flexibility to your portfolio.

If you had, say, $10,000, you could buy five separate $2,000 CDs. Each separate CD would have a different maturity date, ranging from 1 to 5 years.

By setting up this kind of a ladder, you’d have a CD reaching maturity each year, so each year you’d have the option of cashing out or reinvesting a fifth of your savings to keep the momentum going.

CDs in IRAs

Anyone legally old enough to work can open an Individual Retirement Account, or IRA, which can shelter some of your earnings from income taxes while preparing for retirement. CDs in IRAs combine the earning power of CDs with the tax savings of an IRA.

How to Shop for CDs

Next time you’re in your neighborhood bank branch, take a look at the promotional signs they have on the teller’s desk or hanging from the ceiling. There’s a good chance you’ll see the bank’s CD rates on display.

If it’s a credit union, they may call CDs “shared deposits.”

Make a mental note of the rates, but don’t ask the teller about buying a CD yet. The vast majority of the time you can find much higher yields at an online bank.

Because they don’t have to operate a nationwide network of branches and hire thousands of employees, online banks can usually give you higher rates of return on savings accounts as well as 12-month and other kinds of CDs.

Most online banks let you connect online to your traditional bank for online transfers.

If you’re happy with your current bank you can keep your checking account where it is and still open an online account for CDs.

FDIC Security Is a Must

No matter where you shop, make sure your deposit is protected by the Federal Deposit Insurance Company, or FDIC.

FDIC guarantees up to $250,000 in your deposits no matter what happens to the bank.

If you see a 12-month CD rate that’s significantly higher than all its competitors, you may want to double check about the issuing bank’s FDIC status. Banks offering the highest yields are less likely to be insured.

Look for Specials

Typically, a longer-term CD can yield a higher rate.

However, banks routinely offer special rates for shorter-term CDs. However, sometimes these specials have limits - such as $10,000 maximum.

Why would they do that? CDs benefit banks as well as depositors. Your willingness to leave your money alone gives the bank more stability.

If the bank foresees a need for stable deposits over the next two years, it may offer a higher rate on 24-month CDs to provide an incentive to customers.

Shop Around

Yes, interest rates and terms matter a lot. But you should also consider a bank’s other features before buying in.

• What is the minimum deposit? If you can’t afford it, keep shopping.
• What about transfers? Can you link the bank to your existing account? If not, consider how much you need that feature before buying.
• What about ATM access? Not all online banks have ATMs or even offer ATM access through other banks. Lack of ATM access can actually help you save, but only if you know you won’t need the money in a hurry.
• Customer service? If you needed to reach someone at your online bank, could you do so? TrustPilot or even Facebook reviews can tell you a lot about others’ experiences. The Better Business Bureau may have more refined insight.

Bottom Line: A 1 Year CDs Offer Balance

When you’re serious about saving and letting your money work for you -- rather than you working for it -- a 12-month CD gives you a great place to start. However, you also might want to simply consider a high yield savings account.

There’s essentially nothing to lose except the early withdrawal penalty if you had to access your money in a pinch.

A 12-month term is long enough to yield measurable growth yet short enough to give you an annual opportunity to access your money without penalty if needed.

Try to stick with it, though. Once you’re off and running, your 12-month CD can be the first step to a lifelong flow of savings growth.

Methodology

The College Investor is dedicated to helping you make informed decisions around complex financial topics like finding the best 12-month CDs. We do this by providing unbiased reviews of the top banks and CDs for our readers, and then we aggregate those choices into this list.

We have picked certificates of deposit based on our opinions of how easy they are to use, their costs and fees, any interest rates and bonuses provided, and a variety of other factors. We believe that our list accurately reflects the best 12 month CDs in the marketplace for consumers.